ARTICLE IN PRESS

Land Use Policy 23 (2006) 205–225

www.elsevier.com/locate/landusepol

Agricultural expansion and deforestation in lowland Bolivia:

the import substitution versus the structural adjustment model
Pablo Pachecoa,b,c,
a
Graduate School of Geography, Clark University, MA, USA
b
Center for International Forestry Research (CIFOR), Bogor, Indonesia
c
Institute of Environmental Research for Amazônia (IPAM), Av. Nazaré, 669, 66035 170 Belem, Para, CEP 66035-170, Brazil
Received 6 October 2003; received in revised form 25 June 2004; accepted 2 September 2004

Abstract

This paper analyzes the influence that both policies and markets have on driving forest conversion to agricultural land use
focusing on the Bolivian case. It assesses the effects that two models of economic development have had on prompting agricultural
expansion, and hence deforestation in lowland Bolivia. The first model, of economic diversification and import substitution,
initiated in the early 1950s, stimulated the occupation of forestlands for agricultural expansion through colonization, and incentives
to developing a medium and large-scale agriculture. The second model of development, initiated in the mid-1980s, prompted by
structural adjustment policies, led to an intense process of agrarian change in the lowlands, mainly by connecting the agricultural
frontier to the international market of commodities, particularly soybeans. The move from an import substitution industrialization
model to another based on economic liberalization, even though it had positive implications on stimulating agricultural growth, has
led to accelerate the pace of deforestation in lowland Bolivia, which has a larger contribution of medium and large-scale agriculture.
This paper moves forward the debate about deforestation in Bolivia by making explicit connections between some analytical
assessments on land-use/cover change and empirical evidences about forest removal in a five-decades period.
r 2004 Elsevier Ltd. All rights reserved.

Keywords: Bolivia; Amazon; Deforestation; Land-use policy; Soybeans; Agricultural frontiers; Regional development

Introduction markets. It has been suggested that while the household

The debate on the dynamics of land-use/cover change,
and specifically on the causes of deforestation, is
progressively evolving toward higher levels of complex-
ity in its attempt to explain the causal relationships
influencing forest removal for other land uses (Geist and
Lambin, 2001). There are two dominant perspectives:
the first looks at the implications of household behavior
on land-use decisions, and the second focuses on
assessing the drivers of land use change at a broader
level of understanding including shifts in policies and
Corresponding author. Institute of Environmental Research for
Amazônia (IPAM), Av. Nazaré, 669, 66035 170 Belem, Para, CEP
66035-170, Brazil. Tel.: +55 91 241 6700.
E-mail address: p.pacheco@cgiar.org (P. Pacheco).
socio-economic situation conditions the trajectories of
deforestation, both policies and market conditions
contribute to explain its magnitude (Brondizio et al.,
2002; Moran et al., 2000).
This paper aligns with the second perspective. It
assumes that some additional knowledge on causal
relationships of drivers of land-use change can be gained
by looking at both specific government policies and
market conditions, the two of which determine what is
labeled here a ‘‘model of regional development’’. In this
regard, Klepeis and Turner (2001) suggest that assessing
different episodes of development, each shaped by
specific policies and markets influencing agriculture
expansion, provides a powerful instrument to under-
stand the nature–society interactions for specific places
through time.

0264-8377/$ - see front matter r 2004 Elsevier Ltd. All rights reserved.
doi:10.1016/j.landusepol.2004.09.004
 ARTICLE IN PRESS
206 P. Pacheco / Land Use Policy 23 (2006) 205–225
It is very well known that policies and markets can
have contradicting effects on deforestation because they
can either prompt forest clearing for other land uses or
favor forest conservation (Brown and Pearce, 1994;
Contreras, 1999; Gillis and Repetto, 1988; Kaimowitz
and Angelsen, 1998). The matter, therefore, consists of
determining what are the outcomes resulting from
specific policy and market situations, both determined
historically. This paper does so through a case study in
Bolivian lowlands,1 where the rates of deforestation
have tended to increase during the last five decades.
Two periods are analyzed corresponding to two
different models of development, and within each of
them two sub-periods of expansion and crises are
identified. The first model, initiated in 1952, privileged
policies seeking to diversify the economy by supporting
the agricultural, mining, and industrial sectors, and
substituting food imports by producing them internally
within the country. The second model of development,
initiated in 1985, based the growth of the national
economy on a program of economic liberalization
underpinned by structural adjustment policies.
In the early 1950s, the Bolivian government imple-
mented policies favoring the expansion of the agricul-
tural frontier through a dual scheme of frontier
development. It supported the expansion of colonist
settlements, as well as the modernization of medium-
and large-scale agricultural establishments. Yet, the
limited public investment to support agriculture and the
reduced size of the domestic market were the main
obstacles inhibiting the expansion of the lowlands’
agricultural frontier. High transportation costs along
with trade barriers limited the expansion of agricultural
exports. As a result, deforestation rates remained at
comparatively low levels until the mid-1980s.
Since that time, the implementation of a national
structural adjustment program largely stimulated the
expansion of agricultural frontier in lowland Bolivia,
mainly due to an increasing acreage of land devoted to
soybean production, which is sold in the regional
markets. Other factors favoring this expansion were
the availability of cheap lands, fiscal incentives to
stimulate non-traditional exports, as well as favorable
market conditions in the Andean countries. Those
conditions favored the agricultural frontier expansion
leading to growing rates of deforestation to levels never
reached before.
This paper analyzes the implications of policies on
deforestation for the two periods described above. The
main issues emphasized here are the in-migration trends
1
The Bolivian lowlands, as we use the term, include all of the
departments of Beni, Pando, and Santa Cruz, as well as the tropical
areas of Cochabamba and La Paz departments. Most of the region is
located below 500 m above sea level, although some areas of the
Yungas of Cochabamba and La Paz are located at higher elevations
(Montes de Oca, 1989).
to the lowlands, the market dynamics for agricultural
products, and the shift from protectionist to neo-liberal
economic policies. It also underscores the contribution
of different agents to deforestation, viz, colonists,
medium- and large-scale agricultural producers, and
cattle ranchers, due to the political connotation that this
issue has in the deforestation debate, and hence in the
policies that are adopted to arrest deforestation.
As noted before, this paper argues that the structural
adjustment policies led to larger rates of deforestation
compared to protectionist policies aimed at substituting
imports. This should not lead to mistaken interpreta-
tions suggesting that for deforestation to be reduced,
protectionist policies should be reinstalled. It only
attempts to assess the implications that different path-
ways of development had on deforestation.
Looking at the human–environment relationships
over a long span of time demands long series of
deforestation estimates. Two data sets have been merged
to provide consistent evidences of deforestation covering
the period analyzed here, even though both use different
methodologies to estimate land-use change. The first
data set, prepared by the Department of Geography of
Maryland University (Steininger et al., 2000b), offers a
three-period estimate of forest removal (until mid-1970s,
from mid-1970s to mid-1980s, and from mid-1980s to
mid-1990s), while the second data set, elaborated by
BOLFOR, estimates it until 2000 (Rojas et al., 2003).
Some adjustments have been made to the second one, to
make the two data sets comparable, and to minimize
potential errors.
This paper is organized in six parts including this
introduction. The second section presents some of the
theoretical debate supporting the relevance of consider-
ing policies and markets as fundamental drivers of forest
clearing. The third section describes the forest in
lowland Bolivia, as well as the land tenure situation,
and provides some evidences of both magnitude and
rates of deforestation in the last decades. The fourth
section discusses the influences of both policies and
markets on deforestation in the Bolivian lowlands for
the import substitution period, and the next does the
same for the structural adjustment period. The final
section pulls together the main conclusions.
The implications of policies for deforestation
The governmental policies play a decisive role in
deforestation. They can directly influence the land-use
decision parameters of farmers, or may have an indirect
effect. The latter occurs due to their influence on
agricultural frontier evolution and market expansion
for goods produced in such frontiers. Nevertheless, in
most of the cases, it is not easy to distinguish clearly the
effects that specific policies have on land-use change.
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P. Pacheco / Land Use Policy 23 (2006) 205–225 207

It has been argued that deforestation occurs when Table 1

Expected effects of selected policies on deforestation
agents make a profit from forest-competing land uses;
thus, the profits that agents obtain from some economic Type of policy Effect on Comments
activity are higher than the costs that such activity deforestation
demands. Those profits, however, can result either from
Fiscal policies
productive uses of the land, some sort of speculative
Devaluation Increases Raises agricultural prices
actions, or any kind of state subsidies. In practice, of commodities
profits that economic agents gain consist of a combina- Restricted monetary Indeterminate Has conflicting effects
tion of all of those sources. In this vein, policies that supply
contribute to increase the profits from non-forest land Commercial policies
uses (i.e., price controls, subsidized credit, fiscal Trade liberalization Indeterminate Has conflicting effects
incentives) tend to encourage deforestation rates, while Export incentives Increases Improves agricultural
policies seeking to reduce the margins of profitability of products terms of trade
Agricultural export taxes Reduces Lowers agricultural
such land uses tend to diminish forest clearance
products terms of trade
(Kaimowitz et al., 1998). Agricultural import Increases Raises agricultural prices
There is a wide set of policies that indirectly influences restrictions
the expansion of agricultural frontiers either by facil-
itating the access to forest areas, by allocating land- Agricultural policies
tenure rights on forested land, stimulating migrations to Price controls on food Reduces Lowers agricultural
forest fringe areas, or by affecting the markets that prices
agriculturalists settled in frontier areas depend on. Agricultural price Increases Raises agricultural prices
supports
Those policies range from macro-economic (i.e., fiscal
Credit subsidies for Indeterminate Has conflicting effects
and monetary policies), to sector-oriented ones (i.e., crops
land-tenure, road development, subsidized credit, com-
Other policies
mercial barriers), and often interact in complex ways
Increased road Increases Lower agricultural prices
among them. In practice, there is a tension among the investment
different policies because their contradictory objectives, Spending on settlements Increases Motivates migration to
and hence policies, prompting forest removal co-exist the agricultural frontiers
with others working in the opposite sense (Table 1). Securing land tenure Indeterminate Has conflicting effects
Macro-economic policies play decisive roles in driving Source: Adapted by author. Based on Kaimowitz and colleagues
forest clearing because of their effect on macro-prices (1998).
such as interest rates and exchange rates, which in turn
have a strong influence on private investment decisions.
In this regard, policies such as real-exchange rate tax incentives and keeping prices artificially high, may
depreciation, as well as reducing tariffs and trade likely have a direct impact on forest clearing by
restrictions and lowering agricultural export taxes, will improving the competitiveness of agricultural produc-
improve the relative prices of agricultural products, and tion (Brown and Pearce, 1994; Contreras, 1999).
hence prompt deforestation (Kaimowitz and Angelsen, Furthermore, agriculture research and technology can
1998; Repetto, 1988). also lead to increase deforestation, above all when they
Expansive macro-economic policies (increasing public promote innovations that are capital intensive, and for
spending and money supply) often promote economic export products (Angelsen et al., 2001).
growth stimulating demand for agricultural products, Land policies have a strong influence on deforesta-
hence, accelerating deforestation. Inflation associated tion. Conventional wisdom suggests that unclear tenure
with those policies promotes forest clearing by stimulat- promotes forest clearing (Southgate et al., 1991).
ing land speculation. In contrast, deflationary policies Directed settlement leads to forest clearing with
(reducing public spending and money supply) have ambiguous social impacts. Furthermore, uneven land
ambiguous effects on forests because they lead to distribution associated with land speculation often
depress the economy, may induce migration to the encourages forest conversion to extensive land uses
frontiers, and reduce the state capacity to manage (Hecht, 1993). Land distribution policies with limited
forests or control forest crime (Kaimowitz and Angel- employment growth, both rural and urban, encourage
sen, 1998). poor rural families to migrate to forested areas. Tenure
The effect of sector-oriented policies is less ambiguous security promotes long-term investment. Yet, whether
because they have a more direct effect on landholders’ this favors forests or not depends on what producers
land-use decisions. For instance, policies aimed at invest in (i.e., either on reforestation and forest manage-
subsidizing agricultural inputs or allocating financial ment, or forest clearing for subsequent agricultural
resources with lower interest rates, and others such as establishment). Hence, policies designed to improve
 ARTICLE IN PRESS
208 P. Pacheco / Land Use Policy 23 (2006) 205–225
land tenure may have ambiguous effects on forests
(Lele et al., 2000).
The public policies implemented in Latin America are
associated with two successive models of development.
The first model, dominant in the 1960s and 1970s,
prompted the substitution of import goods with
national production, although it was largely biased in
pro of the industrial sector. The second corresponds to a
model of economic liberalization, resulting in the
implementation of the structural adjustment programs
since the early 1980s, and was biased against domestic
goods production.
The import substitution model of development
demanded a strong state intervention in the domestic
markets, as well as complex policy schemes to protect
the countries’ national production. The policies that
favored the expansion of agriculture over forests have
been government subsidies targeting agro-industrial
activities and cattle production, agricultural prices
support, and government sponsored settlement projects
in the agricultural frontiers (Gillis and Repetto, 1988;
Hecht, 1993). In contrast, some policies had the opposite
effect such as those seeking to control prices of staples
with the objective of reducing labor costs for industry.
Furthermore, export taxes and appreciated currency
rates lead to penalize exports of agricultural products,
and hence they disincentive the expansion of agricultural
trade products (Pomareda, 1989).
The structural adjustment policy has tended to
liberalize the internal markets of labor, capital, and
goods, and to open them to the international markets
(Reed, 1996). On the one hand, to adjust the macro-
economic variables, it reduced fiscal expenses (e.g.,
lowering investments in infrastructure, reducing public
employment, and eliminating subsidies programs). On
the other hand, it aimed at restructuring the productive
sectors; it favored the tradable sector through devaluat-
ing the national currency, established export incentives,
and removed agricultural import restrictions. Hence,
improving the competitiveness of agriculture in the
international markets will tend to increase deforestation.
On the opposite side, policies reducing agricultural
prices by eliminating prices support, opening domestic
food markets, and eliminating subsidies may have the
opposite effect (Kaimowitz et al., 1998).
Two perspectives have often been used to analyze the
implications of policies on land-use change. The first
appeals to strict economic approaches employing Gen-
eral Equilibrium Models to analyze the different market
interactions on deforestation (Cattaneo, 2000; Kaimo-
witz and Angelsen, 1998). The second, more eclectic,
uses a stepwise approach to understand the causality
correlations that specific policies have on market
changes, and their implications on land-use change
(i.e., Wunder 2000). This paper adopts the second
perspective privileging a regional political economy
approach, which has been largely adopted to understand
the nature–society interactions in the Amazon (Hecht,
1985; Hecht and Cockburn, 1989; Schmink and Wood,
1992).
The forests and deforestation in Lowland Bolivia
Bolivia is a country comprising an area of
1,098,581 km2, of which about 70% is located in areas
below 500 m above the sea level, which correspond to
what is labeled here as Bolivian lowlands. The two other
country’s natural regions are the altiplano and the
valleys in the country’s western portion. The total forest
area was estimated as 534,000 km2 in 1993 (48.6% of the
country’s total area) (MDSMA, 1995).
The distribution of land ownership is highly skewed.
Official statistics indicate that, of the 75 million hectares
that comprise the Bolivian lowlands, the government
has allocated 23 million hectares to large- and medium-
sized farms, and three million hectares were distributed
to farmer colonists located in newly settled areas. In the
early 1990s the government titled three million hectares
as indigenous territories, and after the mid-1990s
another 19.4 million hectares have been ‘‘immobilized’’
by the state, which will be allocated to indigenous
villages after an ongoing process of title regularization.
In 1994, a total of 20.7 million hectares had been
granted under forest use contracts to 173 business
enterprises, although only three million hectares were
actually being harvested (Hunnisett, 1996; p. 7). How-
ever, the profile of forest rights was modified in the mid-
1990s and the area held by logging concession has
declined dramatically. Currently, 89 timber companies
hold the rights to 5.8 million hectares, which were
legalized in 1997 (Superintendencia Forestal, 2003).
Since the mid-1980s, the proportion of lowlands held
in protected areas emerged as an important issue. By
1995, 12.8 million hectares or 17% of lowland Bolivia
had come under some form of legal protection. In
practice, however, only a fraction of that area is actually
protected (World Bank, 2000).
The total area granted by the state to private
properties, forest concessionaries, immobilized to be
allocated as indigenous territories, or classified as
protected areas reaches a total of about 70 million
hectares. Yet, the actual area under some type of public
and private ownership is less than that amount due to
overlapping land claims, in spite of recent efforts to
resolve conflicts among competing groups and indivi-
duals. The main sources of conflict are linked to the
competition for land held by indigenous groups versus
private land holders and concessionaires, as well as the
establishment of protected areas in places already
occupied by small farmers or claimed by indigenous
people, and the inclusion of logging concessions that
 ARTICLE IN PRESS
P. Pacheco / Land Use Policy 23 (2006) 205–225 209

Table 2
Estimates of deforestation in Bolivia (1000 ha)

Years Forest cover Deforestation in the period Annual deforestation Deforestation rate (%)

ERTS (a) 1975 56,400

MDSMA (b) 1993 53,400 3024 168 0.29

ERTS (a) 1978 56,468

SI-A (c) 2001 53,960 2508 109 0.19
UMD (d) 1987 44,707
UMD (d) 1993 43,790 2470 153 0.34
FAO (e) 1990 54 678
FAO (e) 2000 53,068 1610 161 0.29
MDSMA (f) 1993 53,400
BOLFOR (f) 2000 51,383 2017 270 0.50

Notes: (a) GEOBOL (1978); (b) MDSMA (1995); (c) Superintendencia Agraria (2001); (d) Steininger and associates (2000b); (e) FAO (2001); and (f)
Rojas and colleagues (2003).

existed prior to the creation of the protected forests
(Pacheco, 1998; World Bank, 1993).
Table 2 shows the main estimates of deforestation
that are available for the country as a whole. The data
from the Department of Geography, University of
Maryland (UMD), locates the annual deforestation rate
from 1984/87 to 1992/94 in 153,000 ha/year (0.34%
year). This is the most serious estimate of forest cover
change because it is based on a wall-to-wall analysis of
digital satellite data MSS and TM (Steininger et al.,
2000b). The estimates of MDSMA (1995), for the period
1978–1993, and the last FAO (2001) deforestation
assessment, for the 1990s decade, locate annual defor-
estation in about 160,000 ha/year (0.29% year). Finally,
a BOLFOR’s estimate mentions that deforestation was
about 270,000 ha/year from 1993 to 2000 (Rojas et al.,
2003). The last figure is relatively inflated because this
data set has some methodological shortcomings.2
The estimates mentioned above suggest that the
amount of deforestation that has taken place in Bolivia
has been relatively low compared to other countries with
tropical forests, but this trend has reverted in the latter
2 (deforestation accumulated as of 1975, 1975–1984/87,
The main shortcoming of Rojas and associates (2003) dataset is
that it overestimates deforestation for some areas, and underestimates
it for others. It overestimates deforestation in some areas because it
adopts as initial period a land-use map (the forestry map developed by
MDSMA, 1995), which underreports deforestation by the mid-1990s
compared to the UMD data set, which consequently left a larger
amount of deforestation accumulated as of 2000. Also, it under-
estimates deforestation in another area because it only assesses
deforestation for the areas which were considered to have the largest
rates of deforestation by 2000. Hence, it estimates deforestation only
for central and west Santa Cruz, and the Chapare region of
Cochabamba, excluding all of Pando and the Beni departments, most
of La Paz and even parts of Santa Cruz. Furthermore, the report of
Rojas and associates (2003) has geo-registration errors, and it was
made using images that had not been ortho-rectified, which creates
several errors of comparison.
period. The rate of deforestation in Bolivia during the
latter decade, according to most of the estimates, is
becoming closer to the one for the Amazonian countries
as a whole (0.43%), and it is undoubtedly higher when
considered in a per-capita basis. The main problem of
the current estimates is that they are fragmented in time.
The estimate released by UMD covers a longer span of
time until the mid-1990s, while that of Rojas and
associates (2003) covers the period 1993–2000.
This work adopts the two data sets mentioned above
in order to provide the most available estimates of
deforestation when this paper was written, in spite of the
emerging problems for comparison arising from it. The
two adopt the same definition of deforestation as
complete forest removal, and hence do not account for
forest secondary succession, although they use different
definitions of forest. While the UMD data set was
limited to the humid forest, the BOLFOR data set
includes other types of forests such as deciduous and dry
forests, and other transitions vegetation in cerrado
savanna.
Merging the two data sets, however, made it possible
to compare forest removal for four different periods
1984/87–1992/94, and 1992/94–2000). Therefore, it
provides enough empirical evidence to assess the
implications of both the protectionist and liberalization
models of development on deforestation in lowland
Bolivia. Tables 3 and 4 provide the estimates obtained
by combining these two different data sets. Due to the
fact that deforestation has varied across regions within
Bolivian lowlands, some more specific zoning has been
established, and deforestation estimated accordingly for
each of the defined zones.
While keeping the original UMD data set, some
adjustments have been made to Rojas and colleagues
(2003) data set to make it comparable with the previous
 210

Table 3
Estimates of deforestation in lowlands Bolivia by zone (1000 ha)

No. Zone name Total area Stable forest By mid-1970s Mid-1970s to Mid-1980s to Mid-1990s to 2000 Total Total agriculture
(1) mid-1980s (2) mid-1990s (3) deforestation (1+2+3+4+5)
(1+2+3+4)
Deforestation Other land-use
(4) change (5)

1 Amazonia 12,171 10,176 62 54 125 NA 3 242 244

2 Yungas of La Paz 3,660 2,783 71 28 29 NA 22 127 149
3 Savannas of Beni 18,771 7,012 65 18 87 NA 10 170 180
4 Guarayos 5,866 4,888 9 10 53 NA 9 72 81
5 Chapare 2,647 1,919 49 78 91 7 4 225 228
6 Northwestern 1,660 1,039 277 101 57 225 44 660 704
Santa Cruz
7 Western Santa 915 667 104 32 29 55 30 220 249
Cruz
8 Inter-Andean 600 499 6 3 15 20 10 44 54
valleys
9 Integrated area 791 190 311 106 88 105 32 610 641
10 Northern 825 585 16 45 74 143 41 278 319
expansion zone
11 Southern 1,603 821 9 43 211 417 116 680 796
expansion zone
12 Chiquitania 14,704 10,507 20 27 40 135 104 222 326
13 Chaco 9,814 1,246 1 2 12 3 116 18 134
14 Southern valleys 1,019 902 0 0 0 34 12 35 46
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Medium- to 3,730 1,416 429 166 324 631 254 1,550 1,804
large scale
P. Pacheco / Land Use Policy 23 (2006) 205–225

Predominantly 6,924 4,622 454 314 374 250 124 1,393 1,516
colonists
Cattle ranching 2,556 1,947 17 34 41 81 51 174 225
No identified 61,837 35,246 98 32 172 183 122 485 607
Total 75,046 43,232 999 546 911 1,145 551 3,602 4,153

Notes: (1) Corresponds to 1975, (2) to 1975–1984/87, and (3) to 1984/87–1992/94. Source: (1, 2, and 3) based on Steininger and colleagues (2000b), (4) and (5) based on Rojas and associates (2003).
(5) Other land-use change corresponds to conversion from non-humid forest or other types of vegetation to agricultural uses resulting from the different classification of forests used in the two data
sets employed. The most obvious changes are as follows: In zone 6 it could represent a loss in wetlands, in zone 11 it could represent conversion from dry forests, and in zone 12 it is likely due to
conversion of cerrado savanna. This category, however, may represent some errors due to the comparison of two data sets with different definitions of forests. NA correspond to zones in which there
was no performed assessment of deforestation by the Rojas and associates (2003) data set. The combination of the two mentioned data sets make these estimates of deforestation only referential since
an accurate assessment of deforestation should be done through using comparable data sets. Zoning is based on Davies (1994), Pacheco (1998), Pacheco and Mertens (2004), and Thiele (1995).
Table 4
Indicators of deforestation in lowlands Bolivia by zone, mid-1970s to 2000

No. Zone name Annual deforestation (1000 ha/year) Deforestation rate (%) (1) Participation respect to total (%) (2)

Mid-70s to Mid-80s to Mid-90s to Mid-70s to Mid-80s to Mid-90s to By mid- Mid-70s to Mid-80s to Mid-90s to
mid-80s mid-90s 2000 mid-80s mid-90s 2000 1970s mid-80s mid-90s 2000

1 Amazonia 4.5 20.9 NA 0.04 0.20 NA 6.2 9.9 13.8 NA

2 Yungas of La Paz 2.3 4.8 NA 0.08 0.17 NA 7.1 5.1 3.2 NA
3 Savannas of Beni 1.5 14.5 NA 0.02 0.20 NA 6.5 3.3 9.6 NA
4 Guarayos 0.8 8.8 NA 0.02 0.18 NA 0.9 1.9 5.8 NA
5 Chapare 6.5 15.2 1.2 0.31 0.75 0.06 4.9 14.3 10.0 0.6
6 Northwestern Santa 8.4 9.6 37.4 0.59 0.72 2.96 27.7 18.4 6.3 19.6
Cruz
7 Western Santa Cruz 2.6 4.8 9.2 0.34 0.64 1.27 10.4 5.8 3.2 4.8
8 Inter-Andean valleys 0.2 2.5 3.4 0.04 0.47 0.65 0.6 0.5 1.7 1.8
9 Integrated area 8.9 14.7 17.4 1.81 3.84 5.92 31.1 19.5 9.7 9.1
10 Northern expansion 3.8 12.3 23.9 0.44 1.54 3.28 1.6 8.2 8.1 12.5
zone
11 Southern expansion 3.6 35.1 69.5 0.24 2.42 5.62 0.9 7.9 23.1 36.4
zone
12 Chiquitania 2.2 6.7 22.6 0.02 0.06 0.21 2.0 4.9 4.4 11.8
13 Chaco 0.1 2.1 0.6 0.01 0.16 0.05 0.1 0.3 1.4 0.3
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14 Southern valleys — 0.0 5.7 — 0.00 0.61 — — 0.0 3.0

Medium to large-scale 13.8 54.0 105.2 0.55 2.28 5.14 43.0 30.4 35.6 55.1
P. Pacheco / Land Use Policy 23 (2006) 205–225

Predominantly colonists 26.2 62.4 41.7 0.47 1.19 0.86 45.5 57.5 41.1 21.8
Cattle ranching 2.8 6.8 13.6 0.13 0.33 0.67 1.7 6.2 4.5 7.1
No identified 2.7 28.6 30.4 0.01 0.08 0.09 9.9 5.9 18.8 15.9
Total 45.5 151.9 190.9 0.10 0.34 0.43 100.0 100.0 100.0 100.0

Notes: Mid-1970s–mid-1990s based on Steininger and colleagues (2000b), mid-1990s–2000 based on Rojas and associates (2003). Based on estimates presented in Table 4 above. (1) Deforestation
rates were calculated using as numerator the annual deforestation, and the denominator the total forested area by region for the initial period and (2) corresponds to participation in relation with
total estimated deforestation by each period.
211
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212 P. Pacheco / Land Use Policy 23 (2006) 205–225

Fig. 1. Deforestation trajectories in lowland Bolivia. Forest cover area and deforestation based on Steininger and colleagues (2000b), and Rojas and
associates (2003). Zones are based on Davies (1994), Pacheco and Mertens (2004), and Thiele (1995). The forest zones, following Steininger and
colleagues (2000b), correspond to the areas with 41000 mm/yr precipitation below 1500 m elevation and north of 191S.

one. Following Steininger and associates (2000b), the
forest area considered corresponds to the areas with
41000 mm/yr precipitation, below 1500 m elevation and
north of 191S (Fig. 1). The land-use/cover changes
taking place outside of this area have all been
disregarded. In order to avoid errors due to co-
rectification, a direct comparison between the two data
sets has not been performed; comparison only of final
numerical outcomes has been carried out.
A direct comparison, however, has been carried out to
discriminate humid forest conversion from other vegeta-
tion conversion to agricultural uses. This was done by
adopting the UMD land-use map for the mid-1990s, and
overlapping it with the BOLFOR land-use map for 2000
(Fig. 1). Estimating forest removal for 14 different zones
within the lowlands Bolivia has led to the observation of
underreported deforestation in the BOLFOR dataset,
mainly in the areas in which deforestation took place in
small patches (Table 3).
Lowland Bolivia was divided in zones to describe
better the dynamics of agricultural frontier expansion.
The zoning has been defined taking into account the
type of dominant vegetation, the social process of
territorial occupation, and their resultant socio-econom-
ic characteristics. This zoning draws heavily on previous
works such as of Davies (1994), Pacheco and Mertens
(2004), and Thiele (1995) (Fig. 2).
Lowland Bolivia’s forests range from dry forest in the
south to humid in the north, and a transitional portion
of deciduous forests in between. The region, westwards,
consists of semi-tropical forest that limits the mountain
formation of the Andes. The Amazon (zone 1) is
dominated by humid forests comprising the northern
part of the Bolivian lowlands. The Yungas region and
Chapare (zones 2 and 5, respectively) form a transitional
area between the tropics and the northeastern flank of
the Andes. This area in its southwest portion connects
with the mesotermic valleys of the department of Santa
Cruz, dominated by low and open forests (zones 7 and 8,
respectively), and the southern valleys in the department
of Chuquisaca (zone 14) covered by semi-deciduous
forests.
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P. Pacheco / Land Use Policy 23 (2006) 205–225 213

Fig. 2. Bolivia: deforestation according to zones (by 2000). Forest cover area, and deforestation based on Steininger and colleagues (2000b), and
Rojas and associates (2003). Zones are based on Davies (1994), Pacheco and Mertens (2004), Thiele (1995), and Steininger and colleagues (2000b),
The forest zones, following Steininger and colleagues (2000b), correspond to the areas with 41000 mm/yr precipitation below 1500 m elevation and
north of 191S.

The Chaco (zone 13) constitutes a semi-arid region
covered partially by dry forest, while semi-deciduous
forest is the dominant vegetation in the Chiquitanı´a
region (zone 12). The Guarayos area (zone 4) is covered
by dense forests, and deciduous forest formations cover
the northern and southern expansion zone (zones 10 and
11, respectively). The northwest part of the department
(zone 6) is a transition zone between the sub-Andean
forest of the Chapare and the humid forests character-
istic of the northern Amazon. The agricultural frontier
has evolved mainly around the city of Santa Cruz,
therefore, the zones around this city have the largest
anthropogenic influence.
The pressure of small-scale agriculture originated in
the colonization integrated area (zone 9) has extended to
the colonization north (zone 6) and zone of expansion
north (zone 10). Another important colonization fron-
tier in the lowlands is the Chapare (zone 5) and the north
of the department of La Paz (zone 2). The medium- and
large-scale intensive agriculture was established in the
integrated area (zone 9) and expanded towards the zone
of expansion south (zone 11) and northwards in the area
labeled ‘‘the new north’’ (zone 6). New pressures for
agriculture expansion are taking place in the Chiquitania
(zone 12), Guarayos (zone 4), and the Amazon north
(zone 1).
Detailed information of deforestation according to
the zone is presented in Table 3, and some deforestation
indicators by zone—such as average annual deforesta-
tion, deforestation rates, and the relative contribution of
agents to total deforestation—are offered in Table 4.
The total deforestation accumulated until the mid-1970s
has been of about one million hectares. It increased to
1.5 million hectares in the mid-1980s, with an annual
average forest loss of 46,000 ha/year. The accumulated
deforestation reached about 2.5 million hectares in the
mid-1990s, with an average deforestation of about
152,000 ha/year. Finally, total deforestation was about
3.6 million ha in 2000, and the average deforestation
increased to 191,000 ha/year in the second half of the
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214 P. Pacheco / Land Use Policy 23 (2006) 205–225

1990s. Considering the post-1985 entire period, annual
deforestation was equivalent to 150,000 ha. This entails
that deforestation after the mid-1980s was three times
higher than that during the mid-1970s to the mid-1980s.
About 551,000 ha were estimated to correspond to the
expansion of agriculture over originally non-forest land
uses.
The larger deforestation rates in the second half of the
1990s are by far taking place in the southern expansion
zone (zone 11), dominated by medium- and large-scale
mechanized agriculture, and in the north western area
(zone 6) in which there is an increasing presence of large-
scale agriculture. Other areas, with high rates, are the
colonization area in the northern expansion zone (zone
10). All of the mentioned areas constitute ‘‘hot spots’’ of
deforestation. Several studies have focused on studying
deforestation in the zone of expansion (zones 10 and 11),
such as Morales (1993) and Steininger and colleagues
(2000a). The latter provides the most reliable estimate of
the historical trends of deforestation from 1975 to 1998,
and assesses the relative contribution of different agents
to the total deforestation (i.e., small farmers, large-scale
landholders, and Mennonites). The mentioned study
estimates a rate of clearance that grew from 8700 ha/
year in the late 1970s to 18,300 ha/year during the mid-
1980s. This rate increased exponentially to more than
123,000 ha/year by 1996, and declined to 96,000 ha/year
the following 2 years. Some 48% of the total area has
been deforested until 1998. The annual rate of defor-
estation decreased since that year.
In parallel to the expansion of the agricultural frontier
depicted earlier, a significant change in the contribution
of the agents to deforestation has taken place. In order
to differentiate the contribution of small- versus
medium- and large-scale agriculture, the areas with
largest anthropogenic influence have been classified
according to the dominance of either small farmers,
medium- and large-scale agriculture, or cattle ranching
(Fig. 3). The distinctions between colonization, and
entrepreneurial and livestock frontiers are based on
knowledge gained by the author in several fieldworks,
visual interpretation of satellite imagery, and some
previous work attempting to locate such frontiers
(Pacheco, 1998; Pacheco and Mertens, 2004). It could

Fig. 3. Types of agricultural frontiers in lowlands Bolivia. Expansion zone based on Steininger and colleagues (2000b), colonization frontiers based
on Davies (1994), Pacheco and Mertens (2004), and Thiele (1995), and Steininger and colleagues (2000b). The limits of the agricultural frontiers have
been corrected based on visual interpretation of land-use/cover change map.

be argued that the criteria employed does not allow for
distinguishing accurately such frontiers since a number
of small farmers might also be located within large-
scale-dominant agriculture areas, and vice versa. Never-
theless, this classification provides a proxy to distinguish
the influence of agents on deforestation when looking at
it on a national scale.
Table 4 presents detailed estimates about the drastic
changes in agents’ contribution to deforestation before
and after the mid-1980, the time when the transition
from one model of development to another took place.
While small farmer colonists have contributed most to
deforestation until the mid-1980s, when accounting for
about 57% of total deforestation, their participation
dropped to less than a third during the second half of
the 1990s. In contrast, the participation of both
medium- and large-sized farms, and large-scale cattle
ranching has tended to increase over time to account for
more than half of the total during the second half of the
1990s (62%).
While medium- and large-scale agriculture have
reached a cultivated area of about 650,000 ha in 2000,
considering only summer crops, small farmers have
reached a level close to 350,000 ha until the same year
(INE, 2003) (Fig. 4). In Table 3, the estimates provided
show that deforested area for agriculture was 4 million
hectares until the year 2000. Hence, the abandoned
areas, or those converted to pastures equate about 3
million hectares, though a portion of them might be
fallow areas, or forest regrowth. Only detailed assess-
ment of land-use change can clarify the land-use change
trajectories through time emerging from forest conver-
sion to other land uses.
Indeed, although agriculture is considered the main
proximate cause of deforestation in lowlands Bolivia
(Hunnisett, 1996; Pacheco, 1998), there are no accurate
Expansion
1,400
1,200
Thousand hectares
1,000
800
600
400
200
-
1970
Fig. 4. Lowlands cultivated area by agent and deforestation estimates (1971–2002). (*) AD ¼ average deforestation (ha/year). Includes main
temporal and permanent crops grown in the Bolivian lowlands: rice, corn, soybean, wheat, sorghum, sunflower, fruits, coffee, sugarcane, cotton, and
coca. Based on Department of Agricultural Statistics, Ministry of Agriculture.
ARTICLE IN PRESS
P. Pacheco / Land Use Policy 23 (2006) 205–225 215
data to evidence what is the importance of forest
clearing for agriculture versus pasture. The deforesta-
tion information used here consists of binomial data
discriminating forest from non-forest only. This fact
impedes the identification of the emerging land uses
from forest clearing, as well as the conversion from
agricultural uses to pasture. In lowland Bolivia, it is
known that some forestland originally cleared for large-
scale agriculture has been converted to pastures like in
the integrated area (Arrieta et al., 1990), and more
recently in the southern expansion zone. In colonization
areas, the pasture is likely becoming the main proximate
cause of deforestation, but the evidence supporting this
argument is slim (Urioste and Pacheco, 2001). Further-
more, these are two areas in which the pasture has
traditionally been the dominant land use, they are the
north western Amazon close to city of Cobija, and the
Chiquitania zone with soils suitable for pastures
(Pacheco, 1998).
In spite of the lack of data, it is likely to argue that
forest conversion to pastures has not achieved the
magnitude reached in other countries of the Amazon
(Kaimowitz et al., 2004; Margulis, 2003; Wunder, 2000).
This is basically due to the existence of natural savannas
in the department of Beni, which have supported most
of the cattle herd expansion in the country in the
decades of the 1970s and 1980s (MACA, 1990). This
region was used to supply beef cattle, transported by the
plain, to La Paz and some mining centers.
In 1990, the total cattle herd reached only 4 million
heads, and it grew up to 4.7 million in 1999. The
distribution of the cattle population has changed little in
the last decade. In the lowlands of Bolivia, 65.0% of the
cattle herds are located in Beni, 34.5% in Santa Cruz,
and only 0.5% in Pando. Although extensive self-
reproducing is the dominant system of production, some
Small farmers Medium- and large-scale Total
Crises Expansion Crises
AD* = 190,900 ha / year
AD* = 151,900 ha / year
AD* = 45,500 ha / year
1975 1980 1985 1990 1995 2000
Import substitution Structural adjustment
 ARTICLE IN PRESS
216 P. Pacheco / Land Use Policy 23 (2006) 205–225
trends toward semi-intensification for calves production
and range fattening are underway in Santa Cruz
(FEGASACRUZ, 2003).
The contribution of cattle ranching to deforestation,
as was suggested before, is going to increase in the
future. This is because mechanized agriculture is
constrained by topography, and it is likely to assume
that agricultural expansion will be limited to central and
northern Santa Cruz (zones 6, 9, 10, and 11). Therefore,
there will be little future expansion of the agricultural
frontier due to mechanized agriculture. Given the fact
that the current expansion of deforestation in Chiquita-
nia (zone 12), Guarayos (zone 4), and Amazonia (zone 1)
is directly associated to cattle ranching, it is likely to
assume that pasture expansion will increase its con-
tribution to total deforestation substantially.
The next two sections seek to analyze the main
dynamics and driving factors that contribute to explain
the agriculture frontier development, and hence defor-
estation in lowlands Bolivia for both the import
substitution and the structural adjustment periods.
The import substitution period
The state became the main agent of development
during the import substitution period either by partici-
pating directly in the production through state-owned
companies or by intervening selectively in the markets.
In Bolivia, the influence of import substitution policies
did not get a large proportion because of the limited
capacity of investment of the State, along with the small
size of the economy. This section describes the main
policies employed by the governments to develop the
economy of the lowlands, and their implications for
agricultural expansion, and the agents participation in
deforestation.
The policies for the Bolivian lowlands development
In 1952 there was a profound transformation of the
political system in Bolivia with the installation to power
of a populist government supported by a wide popular
movement.3 The period beginning in 1952 initiated a
process of economic development known in Bolivia as
the ‘‘model of 1952’’, which lasted until the early 1980s.
This model was aimed to support a process of
diversification of the country’s economy, heavily depen-
dent by that time on the mining industry, through the
implementation of some import substitution policies to
3
The National Revolution of 1952 was a unique historical event that
reconstituted the Bolivian economic and political system. A move-
ment, lead by a populist party, took over the state, and implemented
policies such as the nationalization of the mining sector and the
agrarian reform.
incentive the petroleum industry growth, and the
expansion of agriculture in the Bolivian lowlands
(Wennergren and Whitaker, 1975).
The mining sector, however, continued to be the main
source of income for the country’s economy, as it was in
the past. A portion of these incomes was used to invest
in road construction to connect the new frontiers to
Santa Cruz and to the largest western cities of
Cochabamba and La Paz (Fig. 1). The government also
invested in state-owned oil companies and established
policies of subsidized credit targeted to favor large
private investments in agriculture. Nevertheless, because
these policies were adopted within a context of limited
revenues and tight budgets, a substantial portion of the
required capital was obtained through foreign loans
(World Bank, 1978).
The majority of public investments went to lowland
areas due to both the existence of oil reserves in this
region and the availability of new lands for agricultural
and forest use (Reye, 1970). A portion of these resources
was used to open the agricultural frontier to the
production of crops that could substitute agricultural
commodities that were imported into the country,
thereby saving foreign exchange (Arrieta et al., 1990).
With this goal in mind, the government set out to
construct new roads to facilitate the access to new lands
for agriculture, and to freely distribute them through
state-planned settlements, and through allocation of
land to medium- and large-scale farmers. In the early
1950s, the government also helped foreign citizens to
settle in some colonies (Japanese and Mennonites) in the
department of Santa Cruz (Reye, 1970).
In this period, policies to promote agricultural
production were adopted such as agricultural internal
price controls, selective subsidized credit policies, and
agricultural import restrictions that largely favored
large-scale landholders (Arrieta et al., 1990).
The import substitution policies continued with slight
changes until the early 1980s. In the 1970s, the economy
grew at rates never seen before at annual rates higher
than 5.0%, as a result of good performance of the
mining and hydrocarbon sector, which took advantage
of higher international prices. The easy access to foreign
loans contributed to improve the state incomes. In the
late 1970s, however, the country’s economy underwent a
progressive decline in the GNP growth rates. In the mid-
1980s, it virtually collapsed. The factors that contrib-
uted to the economic crisis, included a decline in
revenues produced by the mining sector, an export
economy little diversified, and an increase in the interest
rate applied to the foreign debt (Morales and Sachs,
1987).
Most of the policies implemented during this period
fueled the expansion of the agriculture frontier (i.e.,
roads construction, distribution of public lands, coloni-
zation programs, and subsidized credit). Nevertheless,
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P. Pacheco / Land Use Policy 23 (2006) 205–225
their net effect on deforestation did not get a large
proportion because the limited fiscal revenues that
constrained the resources aimed at public investment
in infrastructure, credit incentives, and colonization
programs. Furthermore, in this period, markets began
to develop in the lowlands linked to cash-income crops
and a limited supply of agricultural exports. The small
size of the domestic market constituted one of the main
factors that constrained the expansion of the agricultur-
al frontier, and consequently deforestation in the low-
lands of Bolivia.
Migrations and colonization in the lowlands
The government initiated some projects of coloniza-
tion since the 1950s, even though more robust programs
were developed since the early 1960s, in selected areas in
the northwest area of Santa Cruz, Chapare, and the
north of La Paz. Those programs stimulated increasing
migration movements of peasants from the Andean
region to settle down in the lowlands. Like any other
process of colonization, this was characterized by high
turnover rates, land abandonment, and increasing
spontaneous colonization around the areas where some
road infrastructure was in place (Blanes et al., 1985;
Thiele, 1995).
These figures were very far below the optimistic initial
colonization policy goals expected to settle 100,000
families in the frontier. The settlements sponsored by the
state experienced several difficulties ranging from
inadequate selection of the colonization areas, lack of
planning, and high costs (Nelson, 1977), although they
attracted a large number of people who settled without
the public agencies’ intervention. In the late 1960s, there
were 8,000 families residing in settlements planned by
the state, and about 15,000 families in the so-called
spontaneous colonization settlements (Pacheco, 1998;
p. 144).
In the 1970s, the colonization had a decisive influence
in the agricultural frontier expansion. The pull factors
that had more influence on attracting people to the
frontier edges were the road construction projects,
somewhat easy mechanisms to claim land, and the
increase in the demand for labor by rural enterprises
(Albó, 1983). By the end of the 1970s, the rural
population in the lowlands’ colonization zones reached
290,000 people (58,000 families), a figure that amounted
to around six percent of the country’s total population
(Blanes et al., 1985). It is estimated that another 50,000
people were employed as day laborers in the agriculture
of the department of Santa Cruz (Albó, 1983).
In the lowlands of Bolivia, unlike the Brazilian case,
there was not a dynamic of small farmers displacement
by large landholders. Thiele (1995) argues that the
persistence of colonist settlements depended upon a
number of interacting factors, though ecological factors,
217
including rainfall and humidity constituted the most
decisive ones. The colonization zones were mostly
limited to higher rainfall areas that are more suitable
for rice production, and successful small farm settle-
ments have depended on their ability to produce and sell
rice. In turn, large farmers took over drier areas to the
southern and eastern part of the city of Santa Cruz, to
produce cotton and sugar that required lower rainfall.
The north of La Paz, along with the colonization
areas located to the north of the city of Santa Cruz,
expanded rapidly in the late 1960s and the 1970s. The
first due to their proximity to the main urban center of
La Paz, which demanded products originating from
these areas, and the latter due to the expansion of roads
and the influence of colonization programs. In contrast,
in the first half of the 1980s, there was an explosive
growth of coca production in the Chapare linked to the
illicit economy of cocaine production because most
rural-to-rural migrants went to this region, whose
population grew from 83,000 in 1981 to 150,000 in
1991 (Laserna, 1993). As suggested by Kaimowitz and
colleagues (1999), coca production not only provides
higher incomes but also a regular source of cash, since
the leaves can be harvested almost continuously. The
high expected incomes from growing coca, along with a
lack of law enforcement in the Chapare during this
period, contributed to attract new colonists to the
region.
By the mid-1980s, the total deforestation in the
colonization frontiers achieved 768,000 ha, and half of
it was in northwestern Santa Cruz, while the two the
north of La Paz and Chapare accounted for 30% of
total deforestation in colonization areas. The presence
of clouds in the north of La Paz, however, inhibits a
complete assessment of forest removal in this area.
Deforestation in the northwest of Santa Cruz and
Yungas was larger in the years before the mid-1970s
(348,000 ha) in relation to the accumulation between the
mid-1970s and the mid-1980s (128,000 ha). In contrast,
forest removal tended to increase over time in Chapare
from 49,000 to 78,000 ha in the two periods mentioned
previously.
The latter estimates reflect the influence of Chapare in
attracting migrants respect to the older frontiers of
colonization in La Paz and Santa Cruz. It is likely to
assume that the Chapare region, however, has caused
much lower rates of deforestation per migrant than
migration to traditional colonization areas, since coca is
a very labor-intensive perennial crop and the coca boom
generated large amounts of local off-farm employment.
Expansion of commercial agriculture in Santa Cruz
The production of sugarcane and cotton expanded
quickly in the agricultural frontier since the early 1960s.
The import substitution policies achieved their goals in a
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218 P. Pacheco / Land Use Policy 23 (2006) 205–225
few years. In 1964, the sugar production was higher than
the domestic demand, and in 1969 the imports of cotton
were eliminated. The medium- and large-scale producers
were favored with lands closer to the main roads, as was
earlier mentioned, with subsidized credit, and agricul-
tural prices support. The total area cultivated by this
group of landholders reached about 60,000 ha in the
1960s, which was approximately half of the area that
small colonists had under cultivation (Pacheco, 1998;
p. 149).
Nevertheless, the small size of the domestic market
(because of small population with a large proportion
residing in the rural areas) limited the expansion of
agricultural production. The mills built with state
financial support quickly reached national demand.
Therefore, the government had to impose barriers to
the sugar production and to negotiate a small prefer-
ential export quota in the United States market in the
mid-1960s to sell the surplus production (Escóbar and
Samaniego, 1981). In the late 1960s, the country started
to export sugarcane, cotton, and timber. Yet, the values
exported were quite low. The agricultural exports in the
1960s were about 6% of the total.
The government incentives stimulated the increase in
the area devoted to cotton from 8,000 ha in 1970 to
68,000 ha in 1973, making it one of the most significant
advances in mechanized agriculture in the country.
Nevertheless, in the second half of the 1970s, cotton
production was no longer profitable and cultivated areas
fell gradually resulting from increased production costs
caused by a rise in cost of inputs, an increase in
commercial interest rates, and declining harvests in
those areas where soils were poor and rainfall was
inadequate (Escóbar and Samaniego, 1981). Most of the
exhausted soils from cotton production were converted
to pasture.
The area devoted to sugarcane grew more slowly than
cotton, but it did at a steady pace until 1977, when it
reached a maximum of 60,000 ha. This increase was the
result of higher international prices, and also of
subsidized credit and consumer prices that were main-
tained artificially at high levels by the government. In
the second half of the 1970s, the sugar international
price decline produced a reduction in its exports, though
production continued to increase because of domestic
prices guarantees (Pacheco, 1998).
In the 1980s, the economic crisis contributed to the
contraction of commercial agriculture because of the
drop in international prices and an overvalued exchange
rate that penalized exports. The government continued
supporting agricultural producers mainly through con-
trol prices and subsidized credit. Yet, those measures
could not compensate for the negative effects that the
crisis had on the contraction of agricultural markets.
In this period, medium- and large-scale agriculture
experienced significant changes. Sugarcane and cotton,
the two most important cash crops grown almost
exclusively by Bolivian producers, came to a standstill,
thereby reducing their importance among commercial
crops. At the same time, Japanese and Mennonite
farmers increased the area planted in soybean and
sorghum (Thiele and Farrington, 1988). By 1985, there
were 65,000 ha of soybeans and 17,000 ha of sorghum
(Pacheco, 1998; p. 220 Table 5.4). The cultivated area of
soybean did not expand anymore, because of the
negative effects of the economic policies that maintained
producer prices in Bolivia far below the world prices.
Furthermore, an overvalued exchange rate and lack of
restrictions to imports made it cheaper to import
products such as vegetable oil, wheat, and milk, rather
than produce them within the country (Kaimowitz et al.,
1999).
The government partially compensated soybean
producers for these policies by providing them credit
at highly negative real interest rates and access to
foreign exchange at official rates to purchase inputs and
machinery. Between 1982 and 1985, this subsidy
amounted to an average of $1.5 million yearly, or
$1,083, for each of the 1,400 soybean producers of Santa
Cruz. Thiele and Farrington (1988) argue that the
subsidies were not sufficient to outweigh the negative
consequences of overvalued exchange rates, price con-
trols, and subsidized imports that affected the soybean
producers.
By the mid-1970s, deforestation in the areas domi-
nated by medium- and large-scale agriculture was about
similar to that in colonization frontiers (429,000 ha). In
1975, the areas devoted to industrial crops (cotton,
sugar), and other crops grown by commercial agricul-
ture were about 145,000 ha. Accumulated deforestation
prompted by intensive agriculture grew to 595,000 ha by
the mid-1980s, and cultivated areas to 185,000 ha. The
difference in acreage was areas likely abandoned or
converted to pasture after a process of declining yields
and soils productivity. About 70% of deforestation
caused by large-scale agriculture took place in the
integrated area.
Summarizing the effects of import substitution policies on
deforestation
The policies of agriculture diversification were effec-
tive in favoring the expansion of commercial crops to
supply the unsatisfied internal demand through the
implementation of diverse policy instruments from land
allocation, subsidized credit, agricultural prices support,
and trade restrictions. The agriculture sector grew very
quickly during this period, though it had little impact on
the incorporation of new lands for agriculture because
of the small size of the domestic market that was
saturated rapidly. Furthermore, the emerging agricul-
tural sector did not have the capacity to compete in the
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P. Pacheco / Land Use Policy 23 (2006) 205–225
regional market of agricultural commodities, full of
trade barriers by that time.
Much of the deforestation, by looking at intervened
areas of agriculture, was the result of shifting cultivation
in colonization areas. While by the mid-1970s both the
colonization and entrepreneurial frontiers had con-
verted almost the same amount of land in to the frontier
(over 400,000 ha), small farmers expanded faster than
large-scale farmers between the mid-1970s and the mid-
1980s. Therefore, in the mid-1980s, colonization ac-
counted for half of the total deforestation in the
lowlands (768,000 ha), while intensive agriculture was
responsible for a little lower proportion (595,000 ha).
The rest was distributed in cattle ranching areas
(Table 3).
The structural adjustment period
In 1985 the Bolivian government initiated a structural
adjustment policy. This program substantially altered
the views about development, and those views regarding
the roles of the different economic sectors. The role of
the state was questioned, large weight was given to
foreign investment, and sectors linked to regional
markets were privileged, particularly non-traditional
export products. This section’s first part summarizes the
structural adjustment policies. The two following parts
discuss the implications of structural adjustment on
forest clearing by small farmers, and medium- and large-
scale agriculture, respectively. Finally, the last part
presents a summary of the implications of the structural
adjustment period on forest clearing emphasizing the
role of the different agents.
The structural adjustment policy
The structural adjustment policy, in its first stage,
included a policy component intended to achieve
economic stabilization in order to reverse the economic
crisis. It liberalized foreign exchange markets and
eliminated multiple exchange rates. It also reduced
public spending by cutting investment projects, elimi-
nated a major part of subsidies, and liquidated both
mining and agriculture state banks in charge of
providing cheap credit to the two sectors, and sup-
pressed prices controls (Morales, 1991).
During the subsequent period, the government
implemented additional measures to drastically shrink
the state apparatus and improve the competitiveness of
some key economic sectors mainly through fiscal
incentives to non-traditional exports, and reorient some
public services to make exporters more efficient. It also
reduced the prices of imported inputs used in the
production of export products and reduced the import
taxes. Other initiatives sought to foster the country’s
219
integration with the main commercial groups within the
region, primarily the Andean Community.
The stabilization and structural adjustment policies
led to dramatic changes in the financial system and in
the agricultural goods market. The scenario prompted
by such policies led to a drastic elimination of subsidies
for agriculture, the removal of agricultural prices
support, and the suppression of barriers and controls
to international trade. The government invested little in
roads mainly due to financial constraints.
With regard to land tenure, even before the structural
adjustment policy, the government had begun to reduce
its support for small farm colonization schemes, and
provided more public lands and titles to large commer-
cial farmers instead. The structural adjustment rein-
forced that tendency and generated new interest in
liberalizing land markets and improving tenure security
for large farmers. This led to the passage, in 1996, of a
new agrarian reform law that legalized land markets in
the Bolivian lowlands, and initiated a process of title
regularization and titling. The latter considers that a
portion of the lowland landholdings property has been
acquired through legal land transactions and the other
has been obtained by illegal or semi-legal means
(Kaimowitz et al., 1999).
The structural adjustment produced mixed macro-
economic results. It succeeded in reducing inflation from
hyperinflationary levels to less than 15% in 1987 and
most of the period since. GNP declined in 1986, when
international tin and hydrocarbon prices fell, then grew
2.5% per year between 1987 and 1989, and over 4% on
average until 1998. Goods exports rose from US$675
million in 1985 to US$1,324 million in 1998. Never-
theless, the GNP fell to 0.44% in 1999, and exports
underwent a decreasing trend. The GDP, however,
began to recover again from 2000. In the last 4 years it
has an average of about 1.6%; it was 2.4% in 2003
(ECLAC, 2004).
The crises that emerged in the latter 1990s was the
result of the implications in Latin American markets of
the Asian crises, which resulted in the contraction of the
demand of some commodities, along with a drop in
international prices for commodities such as soybean
and timber. That combined with the rise of domestic fuel
prices led to increasing production costs of export
products. At the same time there was a rigid contraction
of the credit supply of the financial system, which was
the result of a process of the banks restructuring
prompted by the approval of a more rigid financial
law (UDAPE, 2000). Two other events had a drastic
influence on the economic performance in the late 1990s
by shrinking the national revenues originating in illegal
activities. The first was aimed to reduce smuggling, and
the other to eradicate coca plantations in Chapare. The
recovering of some markets, like soybeans and mining,
are gradually helping to overcome slowly the crisis in
 ARTICLE IN PRESS
220 P. Pacheco / Land Use Policy 23 (2006) 205–225
which the Bolivian economy is still immersed (ECLAC,
2004).
The effect of policies on forest clearing by small farmers
Reed (1996) argues that structural adjustment tends
to slow down economic growth and it leads to growth of
unemployment and poverty. The latter would stimulate
poor people to migrate to the frontier areas. Evidences
from the Bolivian case found that poverty has tended to
drop in the long run, but it is very much the result of an
intense migratory process from rural to urban areas
where poverty prevalence is lower.
Although prevalence of poverty is quite high,
particularly in the rural areas, overall it has tended to
decrease in the last 20 years. In 1976, 66% of the urban
population had unsatisfied basic needs, and this index
reached 98% in the rural areas. In 1992, the number of
urban people with unsatisfied basic needs dropped to
53%, and to 95% in the rural areas (Bolivian Govern-
ment, 2001; p. 33). Lanza (2002; p. 3) mentions that in
the late 2001, poverty was prevalent in 81% of the rural
people and 54% of the urban residents. These data show
that poverty has tended to reduce over a long span of
time.
The poverty reduction in the country is in part the
result of the rapid process of urbanization undergone in
the last two decades. Since 1992, the rural population
has changed very little, reflecting an undergoing process
of urbanization. The rural areas have also stagnated in
economic and social terms, and living standards remain
well below the national average (Bolivian Government,
2001). Pacheco (1998) suggests that since the early 1990s,
more people have tended to migrate from highland and
valley provinces to Bolivia’s three largest cities. Among
migrants to the lowlands, almost half of them went to
the city of Santa Cruz, rather than agricultural frontiers
or small towns.
It can probably be assumed that a larger portion of
the other half choose as destination the coca frontier
area in the Chapare, and the rest distribute among some
colonization areas in north Santa Cruz and north of La
Paz (Kaimowitz et al., 1999). Furthermore, the govern-
ment’s desire to reduce public employment, combined
with a 50% decline in international tin prices in 1986,
led the state-owned mining company COMIBOL to lay
off 23,000 of its 30,000 workers (Chávez, 1992). An
unknown portion of these workers was stimulated by
the government to settle down in the colonization zone
of Chapare.
Though government eradication efforts were devel-
oped since the mid-1980s, there was a move from
optional to mandatory eradication, particularly since
the late 1990s. These programs have made life difficult
for small colonists in the Chapare, and it might make
this zone somewhat less attractive for continued
immigration, as it was in the early 1980s. The average
area under coca cultivation was 48,000 ha between 1990
and 1997, and it was reduced to 14,600 ha in 2000 (OID,
2003).
During the structural adjustment period, public
spending on new agricultural settlements fell to almost
zero, and land became a scarcer resource in some of the
colonization areas, particularly in those closer to
markets and infrastructure. Yet, there are still pressures
of frontier expansion in areas adjacent to the forest
fringes of old colonization frontiers, and it is increasing
along some road corridors, particularly in the northern
part of the department of La Paz, and along the road to
Santa Cruz—Trinidad. Land scarcity in older frontiers,
and proximity of land to markets are factors that in part
increase the pressures from small farmers into some
protected areas, like the Amboro in Santa Cruz, the
forest reserve of El Chore, and some indigenous
territories like the Yuraracare.
The acreage of land growing crops within coloniza-
tion areas did not grow much from 1985 to 2002. The
total area with crops dominantly cultivated by small
farmers was of about 350,000 ha in 2002 (Fig. 4). The
latter reinforces the fact that peasant-produced agricul-
tural goods have tended to reduce their participation in
the internal market (Crespo, 2000). Even more, since the
second half of the 1980s, internal demand for food crops
has been sluggish, probably as a result of stagnant wage
levels and the lack of effective policies to stimulate
investment in this sector (Godoy and De Franco, 1991).
The effect of public policies on deforestation in
colonization areas was limited. By dampening the prices
paid for the foodstuff produced by small farmers, the
structural adjustment policies provided little incentive
for small farmers to expand the areas that they
cultivated. By the same token, cut backs for rural credit
and extension services meant relatively little since
peasant farmers were largely excluded from these
programs.
In spite of the fact that planted areas in colonization
areas grew little during the structural adjustment period,
deforestation was larger than in the past, though at rates
slower than those observed in entrepreneurial frontiers.
The annual deforestation in the colonization frontier
grew from 26,000 ha/year from the mid-1970s to mid-
1980s, to 52,000 ha/year from the mid-1980s to 2000.
The latter is not only due to the affluence of new
migrants in colonization areas that led to expand the
frontier edges, but also due to the increase of forest
conversion to agricultural uses within already occupied
plots. The less growth of cultivated areas, however,
entails that a portion of those areas were left as fallows,
and also that small farmers are increasingly expanding
the pasture areas.
The contribution of small-farmer colonists to accu-
mulated deforestation during the structural adjustment
 ARTICLE IN PRESS
P. Pacheco / Land Use Policy 23 (2006) 205–225
period shows that these type of producers account for
only 30% (625,000 ha) of the 2 million hectares
deforested from the mid-1980s to 2000. Much of the
deforestation is taking place in the northwestern zone,
and the northern expansion zone, though colonization is
expanding to some satellite areas in northeast Santa
Cruz near Noel Kempff Park and the Eastern Beni.
While there are some other areas in which colonization
is active, forest clear cutting is still limited in these areas
because of their isolation from markets and the
precarious road infrastructure.
The expansion of medium- and large-scale agriculture
The sharp increase in large-scale agricultural produc-
tion, using mechanized techniques, in Santa Cruz
became the main cause of deforestation since 1986. As
was already mentioned, much of the forest clearing took
place in the zone of expansion south (zone 11). Almost
half of that expansion resulted from soybean, while the
rest corresponded to wheat, sorghum, and sunflowers
(CAO, 2003). The crops mentioned previously are often
planted as the winter rotation on soybean fields. The
most rapid expansion of agriculture in this zone took
place in the early 1990s, and then it got slower as a result
of a combination of market and financial constraints
and climatic events.
The principal factors driving the expansion of large-
scale mechanized agriculture in the mentioned area are
as follow: (1) the effects of currency devaluation and
economic stability that make investments in agriculture
more secure; (2) the construction of new roads to
connect the agriculture frontiers in expansion, and the
maintenance of existing ones; (3) policies that made new
lands available at low cost to large landholders; and (4)
the expansion of international demand for soybeans but,
especially, preferential tariffs that favored the export of
Bolivian vegetable oils to countries in the Andean
region.4
These conditions favored investments in forest clear-
ing and soybean cultivation, and led to the establish-
ment of grains collecting infrastructure and processing
plants. A key feature was the presence in the expansion
zone of foreign agricultural producers and investors,
mainly those from Brazil. By 2000/01, national farmers
only controlled about 30% of the land under soybean
4 areas there. This is an area not covered by forest in
Although Bolivia soybean products benefit from preferential tariffs
in the Andean market, the Bolivian Ministry of Trade has reported
that some agreements have been violated. Peru, since November 2003,
has decided to apply a 12% importation tariff to refined oil from
soybean and sunflower. Ecuador, in September 2001, emitted a
commercial safeguard of 29% to vegetal oil imports from soybean
and sunflower. Colombia established an import quota of 1100 tons/
month to vegetal oils. Finally, Venezuela has decided to open its
market, including refined vegetal oils, to third parties not part of the
Andean community (La Prensa, 2004).
221
production in the area. The rest was distributed between
Brazilian, Mennonites, and Japanese producers, among
the most important (CAO, 2003).
In a short span of time, soybeans became one of the
main export products of the country. In 1997, soybean
exports reached a peak of US$ 242 millions, or 19% of
the total exported value. The soybean cultivated area
achieved a peak in 1998/99 with 509,000 ha, and
declined slightly in the following 2 years (CAO, 2003).
Yet, the areas planted with soybean reached a new
record in 2003 with 570,000 ha (La Prensa, 2004), and
soybean exports in 2003 were located in the second place
of total exports (US$ 216 million) surpassed only by
natural gas (US$ 381 millions) (BCB, 2004).
The contraction of the agriculture economy in the
latter 1990s, as was earlier mentioned, is related to
market and financial constraints, and climatic events.
Firstly, there was a decline in the soybean prices from
US$ 180–210 ton in 1995/97 to US$ 130–140 ton in
1998/01 (CAO, 2003). It was a result of a demand
contraction influenced by the Asian crises, and an
increment of the supply from the main soybean
producer countries. The drastic decline in prices made
the financial situation difficult for soybean producers.
The situation was worsened due to adjustments the
banking system underwent that limited the availability
of resources for activities with a lack of collateral, like
agriculture. An important number of producers faced
severe difficulties in paying their bank loans, and some
of them were not able to even keep their lands (Urioste
and Pacheco, 2001).
An aggravating factor to the conditions described
before were the climatic events in both 1999 and 2001.
The southern expansion zone faced a severe drought in
these 2 years, along with floods in the north portion of
that region. These events contributed to an increase in
the perception of risk to agriculture in the expansion
zone. The realization that climate risk—due to both
spatial and inter-annual variability—in the expansion
zone is too great to justify soybean cultivation has led to
the increase of other drought tolerant grains such as
sunflower and sorghum. Areas deforested in the south-
ern part of the expansion zone have largely been
converted to pastures, and an unknown area has even
been abandoned. The availability of wet areas in the new
north (northeast portion of zone 6)5 has attracted
mainly medium-scale producers to expand some crop
throughout its extent but by some other vegetation
types.
Soybean producers have found alternative sources of
credit to finance their operations. While a portion of
5
This consists of an area located on both sides of the Rio Grande
river, embracing a large triangle limited by the Brazilian shield to the
northeast, and the Yapacani river to the northwest.
 ARTICLE IN PRESS
222 P. Pacheco / Land Use Policy 23 (2006) 205–225
loans is supplied by soybean processors (some of which
got resources from the International Finance Corpora-
tion, IFC) through provision of agricultural inputs, the
other portion is obtained from non-banking financial
institutions. In both cases the financial cost of credit
may approach similar levels. Non-banking institutions
interest rates are 40% year, compared to 15% in the
banking system (BCB, 2004).
Kaimowitz and colleagues (1999) mention that most
benefits from forest clearing for soybeans accrued to less
than 1,000 soybean producers with more than 50
hectares of soybeans each, and a handful of processors
and exporters. Soybean production directly generates
less than 10,000 jobs and does not pay much in property
taxes. Nevertheless, the soybean economy has some
forward linkages with the national dairy and poultry
production and processing, and its contribution to the
transaction taxes cannot be disregarded. Furthermore,
in addition to the direct linkages with the dairy and
poultry production, it has collateral economic benefits
from the sale of herbicides, fuel, machinery, services,
construction, and demands from transportation ser-
vices.
Medium-and large-scale land managers, national and
foreign, significantly increased their contribution to
deforestation to about half of the total in the period
from the mid-1980s to 2000 (955,000 ha). Most of that
deforestation took place in the southern expansion zone,
and northwestern Santa Cruz. In the last mentioned
area, intensive agriculture has expanded since 2000 due
to the availability of areas suitable for agriculture.
Cattle ranching dynamics in the frontier
As was mentioned earlier, cattle ranching in lowlands
Bolivia has not been an important proximate cause of
deforestation, because most cattle herds expanded in the
natural grasslands of the Beni department, and they
supplied beef cattle for the internal market. That
situation has changed in the recent time. In 1999, the
cattle herd in the lowlands comprised of 4.7 million
head, of which 35% were located in Santa Cruz and
0.5% in the department of Pando, close to the city of
Cobija (Infoagro, 2004).
Most cattle in Santa Cruz are located in the
Chiquitania, though there is some cattle ranching in
the integrated area, and in the zone of expansion south,
both in areas cleared previously for agriculture. Cattle
ranching expansion in Santa Cruz resulted from the
increasing domestic demand of cattle beef, particularly
in the city of Santa Cruz and La Paz. While self-
reproducing herd systems are dominant there is range
fattening for calves of Beni. In the last decade, the
increasing supply of cattle beef in the domestic market
of Santa Cruz, which more than doubled from 33.6 to
72.7 thousand ton/year in the 1990–2001 period,
matches with the trend of beef prices decreasing from
1.3 to 1.0 US$/kg during the same period (FEGASA-
CRUZ, 2003). In Bolivia, beef exports are constrained
due to sanitary barriers since foot-and-mouth disease is
still prevalent. Nevertheless, the Chiquitania zone has
been declared as a free FMD zone since May 2003.
Some opportunities exist for exporting beef cattle to
Chilean markets. It will likely lead to increase deforesta-
tion for pastures as it occurred in Brazil (Kaimowitz et
al., 2004).
Summarizing the effects of structural adjustment policies
on deforestation
Poverty has been reduced during the last 20 years in
Bolivia. Nevertheless, high prevalence of poverty in the
rural areas continues motivating rural emigration,
though it did not stimulate a substantial growth of
migrations to the frontier edges. Most migrants have
opted to establish themselves in the main urban areas.
The number of them going to the lowlands’ rural area
has reduced because there is less incentive for people to
settle down in remote areas, and the available public
land has become scarcer. Among migrants who did go
to predominantly rural lowlands, most went to the coca-
growing areas, though policies to eliminate coca crops
could have reversed such a trend.
The structural adjustment policy had the effect of
creating a stable economic environment that favored
national and foreign investments in agriculture. Liberal-
ization of trade, along with financial incentives to non-
traditional exports and commercial agreements with
other Andean markets, were factors prompting the
expansion of intensive agriculture in the lowlands
Bolivia. Nevertheless, this would not have reached the
magnitude it did if some other conditions had not been
present (i.e., cheap land, adequate soil fertility, and good
access to production areas). The single most important
factor that stimulated the large expansion of the
soybean production was the preferential access of
Bolivian producers to the Andean pact market. In spite
of sporadic crises, this model of production may
continue expanding in the future.
Deforestation accelerated during the structural ad-
justment period to rates never experienced before. Most
of it took place in hot spot areas located in the
department of Santa Cruz, but it expanded as well in
more remote areas along the main road corridors.
Conclusions
In the last five decades, trends of deforestation
increased in lowland Bolivia. Explaining the temporal
variation of forest clearing rates demands understanding
of the underlying and proximate causes of deforestation,
 ARTICLE IN PRESS
P. Pacheco / Land Use Policy 23 (2006) 205–225
which can be best approached by analyzing the policy
shifts and market changes for agricultural products. In
Bolivia, government policies have moved in the mid-
1980s from an import substitution model, which
privileged favoring national production through an
active role of the state, to a structural adjustment that
stresses economic liberalization and the role of markets
on resources allocation. These two models have had
different implications on agriculture frontier expansion,
and hence on deforestation. While deforestation was
limited in the import substitution model, it accelerates
under structural adjustment.
Two features are specifics of deforestation in the
lowlands of Bolivia. On one hand, cattle ranching is
probably a less important proximate cause of deforesta-
tion, in contrast to the Brazilian Amazon where cattle
production is the main factor driving forest clearing,
and hence pastures have an overwhelming influence on
resultant land uses. On the other hand, the influence of
agents of deforestation has shifted over time from a
predominance of colonists, in the import substitution
period, to an increasing role of medium- and large-scale
farmers under the structural adjustment model. In
Brazil, in contrast, medium- and large-scale cattle
ranchers have persisted as the main driving agent
through time.
The two dynamics mentioned previously are a direct
consequence of public policy. The import substitution
model placed higher emphasis on pushing agricultural
frontier expansion through colonization programs, and
by stimulating the development of a mechanized
agriculture to satisfy domestic consumption. The larger
influence of colonization and the somewhat limited
demand for import substitution goods, along with trade
barriers, led to expand the group of small farmers in the
lowlands but limited the growth of commercial agricul-
ture. This situation was reversed since the mid-1980s.
The goals of structural adjustment were to transform
the state-dominated economy to a market-based pro-
duction model based on exports and direct foreign
investment. The implementation of the structural
adjustment program based on fiscal and commercial
policies stimulated the expansion of the agricultural
frontier at rates of growth never before experienced in
Bolivia. Much of the frontier expansion relied on
soybean production, which attracted growing invest-
ments from national and Brazilian capitals.
The frontier expansion was slower in the late 1990s
due to a combination of prices declination, financial
constraints, and climatic events, although it recovered
their pace of growth since the early 2000. The last was
feasible because some new areas with more proper soil
and rainfall conditions for soybean production are
gradually being occupied for growing soybean. Prices
recovered, and industry and non-banking financial
institutions came to play an active role in providing
223
financial resources for agricultural producers, mainly
medium and large landholders. This process of recover-
ing proved the resilience of agriculture expansion when
faced with adverse external events.
In parallel, there is an expanding process of cattle
ranching expansion, though it has had lower effects on
deforestation that might tend to increase in the near
future whether export markets for beef cattle produc-
tions are reached. This would only repeat the experience
that soybean growers had while connecting with export
markets.
In lowland Bolivia, there is a land tenure that has
direct influence on deforestation rates, and it is linked to
the fact that public land is getting scarcer. Then, there is
more competition among agents to obtain full land
ownership rights. In addition, government efforts of
land titling is indirectly providing incentive to deforest
land for current landholders to solidify their claims.
Furthermore, it is expected that immigration of rural
poor will continue to some lowland zones. This will
likely increase the already existing pressure on forest
production reserves and protected areas.
Acknowledgments
The author wishes to thank Ricardo Godoy, Susanna
Hecht, Wil de Jong, David Kaimowitz, and Sven
Wunder for their useful comments to previous versions
of this paper, and to anonymous referees from Land Use
Policy for useful comments and suggestions to improve
some arguments presented here. Thanks also to Alan
Bojanic, Enrique Ormachea, Lincoln Quevedo, and
Cristian Vallejos whom I interacted with at the earlier
stages of this research. Thanks also to Alvaro Guzman,
Miguel Guzman, and Eduardo Wills for sharing
information that helped me to understand the most
recent dynamics of the agriculture and livestock expan-
sion in Santa Cruz. The support from the Center for
International Forestry Research (CIFOR), Bogor,
Indonesia, and the Center for Agrarian and Labor
Development (CEDLA), La Paz, Bolivia, is gratefully
acknowledged. While this study would not have been
possible without the contributions from these indivi-
duals and organizations, any errors are the exclusive
responsibility of the author.
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