|Imperiled Riches—Threatened Rainforests|
The majority of the commercial destruction in the Amazon Basin from the 1960s to early 1990s was not due to logging or mining, but to cattle ranchers and land speculators who burned huge tracts of rainforest before planting the areas with African grasses for pasture. In Brazil, government figures attributed 38 percent of deforestation from 1966-1975 to large-scale cattle ranching. Cattle ranching has been even more widespread in parts of Central America, led by Costa Rica, which has one of the worst deforestation rates in Latin America. During the 1970s and early 1980s, stretches of rainforest were burned and converted into cattle pasture lands to meet American demand for beef.
In Central America, cattle pasture land set aside in the 1970s and 1980s was an especially poor choice because a large portion was located on the minority of fertile rainforest soils (volcanic and floodplain soils). For example, cattle pasture land in Honduras takes up over 40 percent of the country's fertile land. Cattle grazing in the tropics is relatively inefficient: initially each hectare of cleared land may support an animal, but after 6-8 years, each animal may require five hectares.
Nonetheless, cattle are an attractive option in Latin American rainforests. By simply clearing forest and placing a few head on the land, colonists and developers can gain title to the land in some countries (notably Brazil). They often choose cattle over other options because cattle have low maintenance costs and are highly liquid assets easily brought to market. Additionally, cattle are a low-risk investment relative to cash crops which are more subject to wild price swings and pest infestations.
Vast swaths of rainforest are cleared and used for cattle grazing in Latin America for land speculation purposes. The land tenure system in many countries promotes such conversion of land from a natural productive asset to a speculative one by wealthy landowners and speculators. When real pasture land prices exceed real forest land prices, land clearing is a good hedge against inflation, which has been rampant in many developing countries at times in the 1980s and 1990s (2,500 percent in Brazil in 1993, 13,340 percent in Venezuela from 1993-1998). In many cases, the growth of land prices is greater than inflation, making such land clearing a good investment regardless of the use of the land. Additionally, at times of high inflation, the appreciation of cattle prices and the stream of services (milk) they provide may outpace the interest rate earned on money left in the bank.
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Continued: Hydro, Pollution, Hunting
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Copyright Rhett Butler 1994-2005