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Cited by 175Conservation, Biodiversity, and Resource ManagementAgricultural economics and policiesLand Rights and Reforms

The Effect of Rural Credit on Deforestation: Evidence from the Brazilian Amazon

Open access
Assunção, Juliano, Gandour, Clarissa, Rocha, Romero, Rocha, Rudi·2020·The Economic Journal
DOI 10.1093/ej/uez060
Open this paper in CoChat — free accountOpen PDF

Abstract

In 2008, the Brazilian government made the concession of rural credit in the Amazon conditional upon stricter requirements as an attempt to curb forest clearings. This article studies the impact of this innovative policy on deforestation. Difference-in-differences estimations based on a panel of municipalities show that the policy change led to a substantial reduction in deforestation, mostly in municipalities where cattle ranching is the leading economic activity. The results suggest that the mechanism underlying these effects was a restriction in access to rural credit, one of the main support mechanisms for agricultural production in Brazil.

AI snapshot

Written from the paper’s full text.

TL;DR

Brazil’s 2008 Resolution 3545 conditioned subsidized rural credit in the Amazon biome on legal titling and environmental compliance, and the paper finds this reduced deforestation, mostly where cattle ranching dominates. The evidence also indicates the policy worked through reduced credit access, and 2SLS estimates show a positive relationship between rural credit and deforestation.

Key findings

  • Difference-in-differences estimates show Resolution 3545 reduced normalized deforestation: the preferred specification coefficient is −0.529 (SE 0.099), and counterfactual simulations imply total deforestation from 2009–2011 would have been 2,000 km² greater without the policy in the 100 km sample.
  • The policy reduced rural credit concessions: the preferred credit coefficient is −0.397 (SE 0.121), with a counterfactual reduction of about BRL 579 million (USD 290 million) over 2009–2011, or 16% less observed credit than without the resolution.
  • Effects were concentrated in cattle-oriented municipalities; crop-oriented municipalities showed no impact on deforestation, and credit effects were negative and significant for cattle loans but smaller and insignificant for crop loans.
  • 2SLS estimates using Resolution 3545 as an instrument for credit find a positive credit–deforestation relationship, e.g. a second-stage coefficient of 1.331 (SE 0.495) with controls, suggesting binding credit constraints and land-intensive production in the Amazon.

Methods

  • Municipality-by-year panel from 2003–2011 covering 175 municipalities whose centroids are within 100 km of the Amazon biome border and that lie entirely inside or outside the biome; frontier municipalities crossed by the border are excluded.
  • Deforestation data come from PRODES/INPE satellite imagery; rural credit data come from Brazilian Central Bank contract-level records aggregated to municipality-year.
  • Main design is difference-in-differences with municipality and year fixed effects, agricultural price controls, conservation-policy controls, and municipality-clustered standard errors; robustness checks vary distance thresholds, pre-trends, normalizations, and concurrent policies. A 2SLS approach instruments credit with Biome × Post2009.

Limitations

  • The paper states a trade-off between internal and external validity: restricting to near-border municipalities strengthens internal validity, but external validity “can hardly be achieved” in such a large, heterogeneous region, and results apply mainly to the Arc of Deforestation.
  • The paper states that 2SLS validity depends on the assumption that Resolution 3545 affected deforestation only through the credit channel; environmental conditions in the policy could violate this, though the authors argue those conditions were flexible and find no evidence of an alternative channel.
  • Evident from the text: the sample excludes municipalities crossed by the biome border and focuses on a short post-policy window (2009–2011), so estimates may not generalize to frontier municipalities or longer-run dynamics.

Model-written summary. Check it against the paper before relying on it.

Integrity signals

Registry

Crossref · 10.1093/ej/uez060

Cites

60 of 60 references verified0 citation errors · 0 not checkable

Statistics

Nothing to recompute.

Claims the paper makes

9 of 46 cited sources checked · 7 supported · 0 flagged · accuracy not yet measured

  • Premisecitation

    These effects will be detectable only where markets are localised, for instance in the presence of poor road infrastructure.

    “Ultimately, the authors note that these effects will be detectable only where markets are localised, for instance in the presence of poor road infrastructure.”
    Quote in the paperNot a substantial claim1 of 1 sources checked
    • cites Alix-Garcia et al. (2012) source
  • Findingown data

    Resolution 3545's impact on credit for use in cattle ranching activities is negative and significant.

    “The first column of Table 7 shows that Resolution 3545's impact on credit for use in cattle ranching activities is negative and significant.”
    Quote in the paperSubstantial claim
  • Findingown data

    The inclusion of environmental monitoring and law enforcement controls does not affect Resolution 3545's impacts on credit.

    “Further, the inclusion of environmental monitoring and law enforcement controls does not affect Resolution 3545's impacts in particular.”
    Quote in the paperSubstantial claim
  • Findingown data

    The coefficient of interest for credit is largely stable throughout gradual inclusion of controls and sample selection.

    “The coefficient of interest is largely stable throughout gradual inclusion of controls and sample selection.”
    Quote in the paperSubstantial claim
  • Findingown data

    The point estimate of Resolution 3545's effect on deforestation in the first specification is -0.57 standard deviations.

    “We find a point estimate of -0.57standard deviations in the first column.”
    Quote in the paperSubstantial claim
  • Classified as probably not a substantial claim. 52
  • May combine two claims. 46
  • The quote only partly states this claim. 1

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisecitation

    Credit supply has been positively associated with poverty reduction.

    “Credit supply has been positively associated with poverty reduction (Burgess and Pande, 2005)”
    Quote in the paperNot a substantial claim1 of 1 sources checked
    • cites Burgess and Pande, 2005 source

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisecitation

    Pfaff (1999) and Hargrave and Kis-Katos (2013) estimate the effect of different potential drivers of deforestation by exploring panel data at the regional level for Brazil.

    “Pfaff (1999) and Hargrave and Kis-Katos (2013) estimate the effect of different potential drivers of deforestation by exploring panel data at the regional level for Brazil”
    Quote in the paperNot a substantial claim1 of 2 sources checked
    • cites Pfaff (1999) source
    • cites Hargrave and Kis-Katos (2013) source

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisecitation

    Enforcement operations could account for documented spillover effects from blacklisting on neighbouring municipalities.

    “The same reasoning applies to enforcement operations, which could account for documented spillover effects from blacklisting on neighbouring municipalities (Andrade, 2016).”
    Quote in the paperNot a substantial claim1 of 1 sources checked
    • cites Andrade, 2016 source

  • Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

    Premisecitation

    For credit constrained households, the introduction of a PES programme could perversely increase deforestation in other locations within the household's property through a substitution effect, and increase deforestation in other locations outside the household's property through output price effects.

    “The authors focus on a PES scheme, and theoretically demonstrate that, for credit constrained households, the introduction of a PES programme could: (i) perversely increase deforestation in other locations within the household's property through a substitution effect, and (ii) increase deforestation in other locations outside the household's property through output price effects.”
    Quote in the paperNot a substantial claim1 of 1 sources checked
    • cites Alix-Garcia et al. (2012) source

  • Classified as probably not a substantial claim. May combine two claims.

    Premisecitation

    Imperfect insurance and credit constraints are associated with less investment, smaller profits, and limited growth, thus standing as barriers to development in rural areas.

    “Many studies have pointed out that imperfect insurance and credit constraints are associated with less investment, smaller profits, and limited growth, thus standing as barriers to development in rural areas.25”
    Quote in the paperSubstantial claim1 of 1 sources checked
    • cites [25] Cisneros, 2015, ‘Naming and shaming for conservation: evidence from the Brazilian Amazon’, PLoS ONE source

      The Introduction’s forest-policy background discusses restrictions on access to rural credit, and the Discussion considers credit as a possible mechanism affecting deforestation. Neither section links imperfect insurance or credit constraints to lower investment, profits, or growth. Searches for those terms and rural-development effects found no passage addressing the claim. (LLM, conf=0.76)

      Experimental — accuracy not yet measured

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisecitation

    Road density is one of the most relevant determinants of deforestation in the Amazon region.

    “Finally, we test for dynamic effects by interacting policies with road density, which has been widely acknowledged as one of the most relevant determinants of deforestation in the Amazon region (Chomitz and Gray, 1996; Angelsen and Kaimowitz, 1999; Pfaff, 1999; Chomitz and Thomas, 2003; Pfaff et al., 2007).”
    Quote in the paperNot a substantial claim1 of 3 sources checked
    • cites Chomitz and Gray, 1996 source
    • cites Angelsen and Kaimowitz, 1999 source
    • cites Pfaff, 1999 source

  • May combine two claims.

    Interpretationcitation

    Our results apply to municipalities within the so-called Arc of Deforestation, where approximately half of the world's tropical deforestation occurs and where fires have concentrated.

    “More specifically, our results apply to municipalities within the so-called Arc of Deforestation, where approximately half of the world's tropical deforestation occurs and where fires have concentrated (Araújo et al., 2012).”
    Quote in the paperSubstantial claim1 of 1 sources checked
    • cites Araújo et al., 2012 source

      The Results and Discussion and Concluding Remarks (page not provided) describe severe fire activity concentrated along the Amazon–Cerrado transition, known as the Arc of Deforestation. Our copy does not support the claim that approximately half of the world's tropical deforestation occurs there; searches for that figure and for global tropical deforestation found no such passage. (LLM, conf=0.87)

      Experimental — accuracy not yet measured

  • Classified as probably not a substantial claim.

    Premisecitation

    Recent studies have documented that the impact of conservation efforts may extend beyond direct effects and programme borders.

    “However, recent studies have further documented that the impact of conservation efforts may extend beyond direct effects and programme borders, as inputs can be spatially reallocated and interventions can interact with both geographical features and other policies (Herrera, 2015; Andrade, 2016; Pfaff and Robalino, 2017; Robalino et al., 2017).”
    Quote in the paperSubstantial claim1 of 3 sources checked
    • cites Herrera, 2015

      Couldn’t be matched to a paper in Crossref, so it can’t be checked.

    • cites Andrade, 2016 source
    • cites Pfaff and Robalino, 2017 source

  • May combine two claims.

    Findingown data

    The coefficient on Resolution 3545 remains stable upon inclusion of agricultural prices as controls, and drops only marginally to -0.53 when concurrent conservation policies are absorbed.

    “The coefficient remains stable upon inclusion of agricultural prices as controls, and drops only marginally to -0.53 when the confounding influence of concurrent conservation policies are also absorbed.”
    Quote in the paperSubstantial claim

  • May combine two claims.

    Findingown data

    The results hold across alternative samples, with a slightly larger point estimate in the 50 km sample and a smaller but still sizeable coefficient in the 200 km sample.

    “Further, the results hold across alternative samples.We find a slightly larger point estimate in the smaller sample (50 km), and a smaller but still sizeable coefficient in the larger sample (200 km).”
    Quote in the paperSubstantial claim

  • May combine two claims.

    Findingown data

    Difference-in-differences estimations based on a panel of municipalities show that the policy change led to a substantial reduction in deforestation, mostly in municipalities where cattle ranching is the leading economic activity.

    “Difference-in-differences estimations based on a panel of municipalities show that the policy change led to a substantial reduction in deforestation, mostly in municipalities where cattle ranching is the leading economic activity.”
    Quote in the paperSubstantial claim

  • May combine two claims.

    Findingown data

    Deforestation in control and treatment municipalities exhibit divergent behaviour immediately after implementation of Resolution 3545, with forest clearings in treatment municipalities dropping sharply.

    “Yet, deforestation in control and treatment municipalities exhibit divergent behaviour immediately after the implementation of Resolution 3545, with forest clearings in treatment municipalities dropping sharply.”
    Quote in the paperSubstantial claim

  • May combine two claims.

    Findingown data

    The effect of Resolution 3545 on credit concessions for use in crop farming is smaller and statistically insignificant.

    “In contrast, column 2 shows that the effect on credit concessions for use in crop farming is smaller and statistically insignificant.”
    Quote in the paperNot a substantial claim

  • May combine two claims.

    Findingown data

    The negative effect of Resolution 3545 on rural credit concessions holds for samples within 50 km and 200 km of the biome border.

    “Resolution 3545 | -0.346 (0.127) * * * | -0.436 (0.121) * * * | -0.404 (0.121) * * * | -0.397 (0.121) * * * | -0.317 (0.148) * * | -0.363 (0.102) * * *”
    Quote in the paperNot a substantial claim
    • Rests on an assumption: Resolution 3545 was implemented in July 2008.

  • May combine two claims.

    Findingown data

    The same exercise for column 3 returns -0.697 and -0.417, indicating a relatively larger effect for deforestation and a similar one for credit.

    “The same exercise for column 3 returns -0.697 and -0.417, indicating a relatively larger effect for deforestation and a similar one for credit, respectively.”
    Quote in the paperNot a substantial claim

  • The quote only partly states this claim.

    Findingown data

    In OLS specifications, rural credit has no statistically significant effect on normalised deforestation in the benchmark sample.

    “Rural credit | -0.009 (0.025) | -0.015 (0.024) | -0.016 (0.024) | -0.057 (0.031) * | 0.000 (0.018)”
    Quote in the paperSubstantial claim
    • Rests on an assumption: Resolution 3545 was implemented in July 2008.

  • May combine two claims.

    Findingown data

    OLS coefficients of credit on deforestation are statistically insignificant and vary in sign across specifications.

    “The coefficients are statistically insignificant, and the point estimates vary in sign across different specifications.”
    Quote in the paperSubstantial claim

  • May combine two claims.

    Findingown data

    Population density did not respond to Resolution 3545; the coefficient is -0.02 with standard error 0.02.

    “We find an insignificant coefficient of -0.02 (standard error of 0.02).”
    Quote in the paperSubstantial claim
    • Rests on an assumption: Population density is a valid proxy for labour mobility across the biome border.

  • May combine two claims.

    Findingown data

    Resolution 3545 had large and significant effects on large credit contracts, but no significant impact on the number of small loans.

    “We find large and significant coefficients for large contracts, but no significant impact on the number of small loans.”
    Quote in the paperSubstantial claim
    • Rests on an assumption: Loaned amounts approximate property size in rural credit contracts.

  • May combine two claims.

    Findingown data

    The reduction in credit loans was widespread across different regions, but credit concessions for use in cattle ranching were the most affected by Resolution 3545.

    “Overall, the results indicate that while the reduction in credit loans was widespread across different regions, credit concessions for use in cattle ranching were the most affected by Resolution 3545.”
    Quote in the paperSubstantial claim

  • May combine two claims.

    Findingown data

    The estimated coefficients for credit concessions remain negative and robust in both cattle-oriented and crop-oriented sub-samples.

    “Columns 9 and 10 show that the estimated coefficients remain negative and robust in both sub-samples.”
    Quote in the paperNot a substantial claim

  • May combine two claims.

    Findingown data

    The 2SLS point estimate decreases as distance to biome border increases, but remains statistically significant across different samples.

    “The point estimate decreases as we increase distance to biome border, but remain statistically significant across the different samples.”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

    Findingown data

    Dividing coefficients in column 2 by standard deviations of their dependent variables yields -0.513 and -0.397, similar to benchmark coefficients of -0.529 and -0.397 for deforestation and credit, respectively.

    “If we divide the coefficients in column 2 by the standard deviations of their respective dependent variable, we find -0.513 and -0.397, which are both quite similar to our benchmark coefficients of -0.529 and -0.397 for deforestation and credit, respectively.”
    Quote in the paperNot a substantial claim

  • May combine two claims.

    Findingown data

    The negative effect of Resolution 3545 on deforestation holds for samples within 50 km and 200 km of the biome border.

    “Resolution 3545 | -0.573 (0.098) * * * | -0.584 (0.099) * * * | -0.534 (0.099) * * * | -0.529 (0.099) * * * | -0.556 (0.131) * * * | -0.382 (0.078) * * *”
    Quote in the paperNot a substantial claim
    • Rests on an assumption: Resolution 3545 was implemented in July 2008.

  • May combine two claims.

    Findingown data

    Resolution 3545 significantly decreased annual deforestation inside the biome by 3.9 percentage points (conditional difference-in-differences coefficient -0.039), corresponding to 77% of the pre-policy dependent variable average.

    “The conditional differencein-differences coefficient of -0.039 indicates that Resolution 3545 significantly decreased annual deforestation inside the biome by 3.9 percentage points, which corresponds to 77% of the dependent variable average computed over the pre-policy period.”
    Quote in the paperSubstantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based).

    Interpretationreasoning

    Producers operating in the crop sector would therefore be able to sustain investment and deforestation at pre-policy levels.

    “Producers operating in this sector would therefore be able to sustain investment and deforestation at pre-policy levels.”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S4 (based). May combine two claims.

    Premisenone given

    While forest peasant household activities are present in the Brazilian Amazon, particularly in association with logging and subsistence agriculture, it is commercial agriculture that drives most tropical forest conversion.

    “While forest peasant household activities are present in the Brazilian Amazon, particularly in association with logging and subsistence agriculture, it is commercial agriculture that drives most tropical forest conversion.”
    Quote in the paperNot a substantial claim

  • May combine two claims.

    Premisecitation

    Implementation of Resolution 3545's terms by all public banks, private banks, and credit cooperatives was optional as of May 1st 2008, and obligatory as of July 1st 2008.

    “Implementation of the resolution's terms by all public banks, private banks, and credit cooperatives was optional as of May 1 st 2008, and obligatory as of July 1 st 2008.”
    Quote in the paperSubstantial claim0 of 1 sources checked
    • cites Resolution 3545

      Couldn’t be matched to a paper in Crossref, so it can’t be checked.

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisenone given

    Only establishments under full or partial embargo were exceptions and were denied access to official rural credit in all circumstances.

    “Only establishments that were under full or partial embargo were exceptions to this rule, and were to be denied access to official rural credit in all circumstances.”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Interpretationreasoning

    Resolution 3545's impact on rural credit concession and deforestation may have differed across economic sectors due to structural heterogeneity.

    “Resolution 3545's impact on rural credit concession and, consequently, on deforestation may have differed across economic sectors due to structural heterogeneity.”
    Quote in the paperNot a substantial claim

  • May combine two claims.

    Premisecitation

    The results for the relationship between credit variables and deforestation are mixed and face identification concerns.

    “The results for the relationship between credit variables and deforestation are mixed and face identification concerns.”
    • Also stated in: § 7. The General Relationship Between Credit and Deforestation · plain
      “The results for the relationship between credit variables and deforestation are mixed and face identification concerns.”
    Quote in the paperSubstantial claim

  • May combine two claims.

    Interpretationreasoning

    The activities undertaken in the region are land-intensive, since a tighter credit constraint induced a reduction in deforestation.

    “and indicates that the activities undertaken in the region are land-intensive, since a tighter credit constraint induced a reduction in deforestation.”
    Quote in the paperSubstantial claim
    • The authors state this as an assumption: The policy affected deforestation only through the credit channel.

  • Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based). May combine two claims.

    Interpretationreasoning

    If farmers alter deforestation for reasons other than direct reduction in credit, producers will suffer no credit effect, as their intention to comply makes them compliers, but still reduce deforestation.

    “If this is the case, producers will suffer no credit effect, as their intention to comply makes them compliers, but still reduce deforestation.”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

    Premisecitation

    According to the Ministry of Agriculture and Supply, about 30% of the resources needed in a typical harvest year in Brazil are funded by rural credit, while the remaining 70% come from producers' own resources and other agents.

    “According to the Ministry of Agriculture and Supply, about 30% of the resources needed in a typical harvest year in Brazil are funded by rural credit, while the remaining 70% come from producers' own resources, as well as from other agents of agribusiness (such as trading companies) and other market mechanisms (MAPA, 2003).”
    Quote in the paperNot a substantial claim0 of 1 sources checked
    • cites MAPA, 2003

      Couldn’t be matched to a paper in Crossref, so it can’t be checked.

  • May combine two claims.

    Study design and conductown data

    The coefficient capturing the effect of the actual policy (post-2009 interaction) remains negative and significant, while all other interactions for fake policy-implementation years are statistically non-significant.

    “The results show that the coefficient capturing the effect of the actual policy (post-2009 interaction) remains negative and significant, while all other interactions are statistically non-significant.”
    Quote in the paperSubstantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisenone given

    Soon after compulsory adoption, new measures further loosened requirements for rural credit to small-scale producers.

    “Soon after the compulsory adoption of the resolution, new measures further loosened the requirements for the concession of rural credit to small-scale producers”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based). May combine two claims.

    Premisenone given

    No such patterns are observed for livestock farming in the country, which remains a low-productivity practice and relatively more dependent on official rural credit.

    “No such patterns are observed for livestock farming in the country, which remains a lowproductivity practice and relatively more dependent on official rural credit.”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisecitation

    Previous studies have found beneficial effects of the availability of credit in rural contexts.

    “Previous studies have found beneficial effects of the availability of credit in rural contexts.”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing), S4 (based).

    Premisenone given

    Rural credit is the main channel through which governments of developing countries support agriculture.

    “Considering that rural credit is the main channel through which governments of developing countries support agriculture”
    Quote in the paperNot a substantial claim

  • Classified as probably not a substantial claim.

    Premisecitation

    Increased credit availability would likely lead to rising deforestation if credit is used to increase agricultural production by expanding new areas and converting them into agriculture.

    “Should credit be used to increase agricultural production by expanding new areas and converting them into agriculture, increased credit availability would likely lead to rising deforestation (Binswanger, 1991; Angelsen, 1999; Zwane, 2007).”
    Quote in the paperSubstantial claim0 of 3 sources checked
    • cites Binswanger, 1991 source
    • cites Angelsen, 1999

      Couldn’t be matched to a paper in Crossref, so it can’t be checked.

    • cites Zwane, 2007 source

  • Probably not a substantial claim: may not pass S4 (based).

    Interpretationreasoning

    Heterogeneities may have influenced the way in which Resolution 3545 impacted access to credit and, thus, deforestation across different producers, sectors and regions.

    “In this case, heterogeneities may have influenced the way in which Resolution 3545 impacted access to credit and, thus, deforestation across different producers, sectors and regions.”
    Quote in the paperNot a substantial claim

  • Classified as probably not a substantial claim.

    Premisereasoning

    Under complete markets, credit should have no impact on forest clearings.

    “On the one hand, credit should have no impact on forest clearings under complete markets.”
    • Also stated in: § 7. The General Relationship Between Credit and Deforestation · plain
      “On the one hand, credit should have no impact on forest clearings under complete markets.”
    Quote in the paperSubstantial claim

  • Classified as probably not a substantial claim.

    Premisenone given

    Data limitations, concerns regarding endogeneity of credit supply and demand, and a limited ability to generalise context-specific findings have made it difficult to obtain a broader understanding of how credit policies affect deforestation.

    “Data limitations, concerns regarding the endogeneity of credit supply and demand, and a limited ability to generalise context-specific findings have made it difficult to obtain a broader understanding of how credit policies affect deforestation.”
    Quote in the paperSubstantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

    Interpretationreasoning

    A decrease in rural credit for crop farmers might not lead to a decrease in forest clearings, since resources were not originally being used to extend farmland into forest areas.

    “In this case, a decrease in rural credit for crop farmers might not lead to a decrease in forest clearings, since resources were not originally being used to extend farmland into forest areas.”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S2 (checkable).

    Premisenone given

    The results provide novel evidence to the scant and mixed empirical literature on the effects of rural credit on deforestation.

    “These results provide novel evidence to the scant and mixed empirical literature on the effects of rural credit on deforestation.”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Interpretationreasoning

    It is possible that farmers who were not meeting environmental regulation in the present alter their deforestation behaviour for reasons other than a direct reduction in credit.

    “Although unlikely, it is therefore possible that farmers who were not meeting environmental regulation in the present alter their deforestation behaviour for reasons other than a direct reduction in credit.”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S1 (asserted), S4 (based).

    Interpretationreasoning

    If legal titling requirements were immediately binding and restrictive, the effects of Resolution 3545 on deforestation should directly reflect a reduction in access to rural credit.

    “If this is the case, the effects of Resolution 3545 on deforestation should directly reflect a reduction in access to rural credit.”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisenone given

    Private landholders must comply with the Brazilian Forest Code, which sets legal guidelines for land cover conversion and protection of native vegetation inside private properties.

    “Private landholders must also comply with the Brazilian Forest Code, which sets legal guidelines for land cover conversion and protection of native vegetation inside private properties.”
    Quote in the paperNot a substantial claim

  • May combine two claims.

    Study design and conductown data

    The coefficients on Resolution 3545 remain negative and robust when controlling for a linear trend interacted with the Amazon biome dummy and for municipality-specific linear trends.

    “In our two remaining robustness checks, we control for an interaction term between a linear trend and the Amazon biome dummy (column 4) and for municipality-specific linear trends (column 5).The coefficients remain negative and robust throughout.”
    Quote in the paperSubstantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisereasoning

    In theory, the relationship between credit and deforestation is ambiguous.

    “In theory, the relationship between credit and deforestation is ambiguous.”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisecitation

    Barbier and Burgess (1996) perform a similar exercise for Mexico.

    “while Barbier and Burgess (1996) perform a similar exercise for Mexico.”
    Quote in the paperNot a substantial claim0 of 1 sources checked
    • cites Barbier and Burgess (1996) source

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Study design and conductreasoning

    To control for measurement error, variables indicating unobservable areas are included in all regressions.

    “To control for measurement error, variables indicating unobservable areas are included in all regressions.”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisecitation

    Jayachandran (2013) found suggestive evidence that facilitated access to credit can induce contract take-up and thus deter forest owners from cutting trees to meet emergency needs.

    “The author found suggestive evidence that facilitated access to credit can induce contract take-up and thus deter forest owners from cutting trees to meet emergency needs.”
    Quote in the paperNot a substantial claim0 of 1 sources checked
    • cites Jayachandran (2013) source

  • Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

    Premisecitation

    Credit supply has been positively associated with agricultural investment and consumption smoothing.

    “and agricultural investment and consumption smoothing (Rosenzweig and Wolpin, 1993; Conning and Udry, 2007; Giné and Yang, 2009).”
    Quote in the paperNot a substantial claim0 of 3 sources checked
    • cites Rosenzweig and Wolpin, 1993 source
    • cites Conning and Udry, 2007

      Couldn’t be matched to a paper in Crossref, so it can’t be checked.

    • cites Giné and Yang, 2009 source

  • Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

    Interpretationreasoning

    Producers who feared the resolution might affect their future access to credit could signal an intent to change their deforestation behaviour in the future and be considered compliant in the present.

    “This meant that producers who feared the resolution might affect their future access to credit could signal an intent to change their deforestation behaviour in the future and be considered compliant with environmental regulation in the present.”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisecitation

    Increased credit availability could contain deforestation if it is used to fund capital expenditures required to improve agricultural technology and productivity, depending on relative prices of intensification and clearings.

    “Yet, should it be used to fund capital expenditures required to improve agricultural technology and productivity, increased credit availability could contain deforestation depending on the relative prices of intensification and clearings (Zwane, 2007).”
    Quote in the paperNot a substantial claim0 of 1 sources checked
    • cites Zwane, 2007 source

  • Probably not a substantial claim: may not pass S4 (based).

    Premisenone given

    In a context of historically precarious property rights such as that of the Brazilian Amazon, the requirements regarding legal titling of land were immediately binding and restrictive.

    “In a context of historically precarious property rights such as that of the Brazilian Amazon, the requirements regarding legal titling of land were immediately binding and restrictive.”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S4 (based).

    Premisenone given

    Agricultural production is a first-order driver of deforestation worldwide.

    “and that agricultural production is a first-order driver of deforestation worldwide”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisereasoning

    Although restrictive at first, Resolution 3545 was subject to a series of qualifications that eased conditions for the concession of rural credit for specific groups.

    “Although restrictive at first, Resolution 3545 was subject to a series of qualifications that eased conditions for the concession of rural credit for specific groups.”
    Quote in the paperNot a substantial claim

  • Classified as probably not a substantial claim. May combine two claims.

    Premisereasoning

    The context in which deforestation occurs in the Brazilian Amazon differs from that of Uganda, where poverty, reliance on subsistence agriculture, and presumably low returns to deforestation may explain why increased financial resources would contain stress-induced forest clearings.

    “Yet, the context in which deforestation occurs in the Brazilian Amazon differs from that of Uganda, where poverty, the reliance on subsistence agriculture, and presumably low returns to deforestation may explain why increased financial resources would contain stress-induced forest clearings.”
    Quote in the paperSubstantial claim

  • May combine two claims.

    Study design and conductreasoning

    As agricultural prices are endogenous to local agricultural production and local deforestation activity, we construct an output price series that captures exogenous variations in demand for agricultural commodities produced locally.

    “As agricultural prices are endogenous to local agricultural production and, thus, local deforestation activity, we construct an output price series that captures exogenous variations in the demand for agricultural commodities produced locally.”
    Quote in the paperSubstantial claim

  • May combine two claims.

    Study design and conductown data

    The coefficients capturing the effect of Resolution 3545 on credit remain negative and significant when controlling for time trends, and are even slightly larger in absolute terms.

    “The coefficients capturing the effect of Resolution 3545 remain negative and significant throughout, and are even slightly larger in absolute terms in both tests.”
    Quote in the paperSubstantial claim

  • May combine two claims.

    Premisenone given

    The policy was implemented such that requirements regarding land titling were immediately binding, while environmental conditions were more flexible.

    “The policy was implemented such that the requirements regarding land titling were immediately binding, while the environmental conditions were more flexible.”
    Quote in the paperSubstantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

    Premisenone given

    The clearing of tropical vegetation by private parties in the Amazon is only legal if conducted inside private property and if the specific area to be cleared has been duly authorised or licensed by environmental authorities.

    “The clearing of tropical vegetation by private parties in the Amazon is only legal if conducted inside private property and if the specific area to be cleared has been duly authorised or licensed by environmental authorities.”
    Quote in the paperNot a substantial claim

  • Classified as probably not a substantial claim.

    Study design and conductreasoning

    By including controls for relevant policies, we seek to ensure that the effect of Resolution 3545 on credit and deforestation is isolated from confounding effects of other concurrent conservation efforts.

    “By including controls for relevant policies in our estimations, we seek to ensure that the effect of Resolution 3545 on credit and, consequently, on deforestation, is isolated from confounding effects of other concurrent conservation efforts.”
    Quote in the paperSubstantial claim

  • May combine two claims.

    Study design and conductreasoning

    All samples exclude municipalities crossed by the biome border, since only landholdings that were entirely or partially located within the Amazon biome in frontier municipalities were subject to the resolution's condition.

    “All samples exclude municipalities crossed by the biome border, since only landholdings that were entirely or partially located within the Amazon biome in frontier municipalities were subject to the resolution's condition.”
    Quote in the paperSubstantial claim

  • Probably not a substantial claim: may not pass S2 (checkable), S4 (based).

    Premisenone given

    In a context of precarious property rights, requirements regarding legal titling of land should be immediately binding and restrictive.

    “In a context of precarious property rights, such as that of the Brazilian Amazon, the requirements regarding legal titling of land should be immediately binding and restrictive.”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S4 (based).

    Study design and conductnone given

    The parameter β1 captures the causal effect of Resolution 3545 on deforestation if residuals contain no omitted variables simultaneously correlated with policy change and latent determinants of forest clearings.

    “The parameter of interest β 1 in equation ( 3) captures the causal effect of Resolution 3545 on deforestation if the residuals contain no omitted variables simultaneously correlated with the policy change and with any latent determinant of forest clearings.”
    Quote in the paperNot a substantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisenone given

    All requirements applied not only to landowners, but also to associates, sharecroppers, and tenants.

    “All requirements applied not only to landowners, but also to associates, sharecroppers, and tenants.”
    Quote in the paperNot a substantial claim

  • Classified as probably not a substantial claim.

    Premisenone given

    In the absence of credit constraints, changes in the availability of subsidised rural credit would not affect agricultural choices.

    “In the absence of credit constraints, changes in the availability of subsidised rural credit would not affect agricultural choices.”
    Quote in the paperSubstantial claim

  • May combine two claims.

    Interpretationown data

    Results from Table 8 strengthen the case for the estimates' robustness to other relevant concurrent conservation policies and their dynamic effects.

    “Overall, results from Table 8 strengthen the case for our estimates' robustness to the presence of other relevant concurrent conservation policies and their dynamic effects.”
    Quote in the paperSubstantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing). May combine two claims.

    Interpretationreasoning

    The predominance of cattle ranching in the region and the correlation between this activity and extensive land use in the Amazon is consistent with these results.

    “The predominance of cattle ranching in the region and the correlation between this activity and extensive land use in the Amazon is consistent with these results.”
    Quote in the paperNot a substantial claim

  • Classified as probably not a substantial claim.

    Premisecitation

    Input reallocation can move forest clearings beyond programme borders.

    “Pfaff and Robalino (2017) argue that input reallocation can move forest clearings beyond programme borders.”
    Quote in the paperSubstantial claim0 of 1 sources checked
    • cites Pfaff and Robalino (2017) source

  • May combine two claims.

    Interpretationreasoning

    Farmers appear to have responded to a reduction in the availability of subsidised credit by changing their optimal allocation of resources, and thereby reducing deforestation.

    “Farmers appear to have responded to a reduction in the availability of subsidised credit by changing their optimal allocation of resources, and thereby reducing deforestation.”
    Quote in the paperSubstantial claim

  • May combine two claims.

    Interpretationown data

    The financial environment in the Amazon is characterised by significant credit constraints and/or financial imperfections.

    “Second, our analysis suggests that the financial environment in the Amazon is characterised by significant credit constraints and/or financial imperfections.”
    Quote in the paperSubstantial claim

  • May combine two claims.

    Premisecitation

    Municipality-level GDP and agricultural output were not affected by post-2004 conservation policies in the Brazilian Amazon.

    “The results typically show that municipality-level GDP and agricultural output were not affected by conservation policies (Assunc ¸ão et al., 2015).”
    Quote in the paperNot a substantial claim0 of 1 sources checked
    • cites Assunc ¸ão et al., 2015

      Couldn’t be matched to a paper in Crossref, so it can’t be checked.

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisecitation

    Increased credit availability could contain deforestation if used to fund capital expenditures to improve agricultural technology and productivity, depending on relative prices of intensification and clearings.

    “Yet, should it be used to fund capital expenditures required to improve agricultural technology and productivity, increased credit availability could contain deforestation depending on the relative prices of intensification and clearings (Zwane, 2007).”
    Quote in the paperNot a substantial claim0 of 1 sources checked
    • cites Zwane, 2007 source

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisecitation

    Increased credit availability would likely lead to rising deforestation if credit is used to increase agricultural production by clearing forest areas.

    “Should credit be used to increase agricultural production by clearing forest areas and converting them into agriculture, increased credit availability would likely lead to rising deforestation (Binswanger, 1991; Angelsen, 1999; Zwane, 2007).”
    Quote in the paperNot a substantial claim0 of 3 sources checked
    • cites Binswanger, 1991 source
    • cites Angelsen, 1999

      Couldn’t be matched to a paper in Crossref, so it can’t be checked.

    • cites Zwane, 2007 source

  • May combine two claims.

    Premisecitation

    Jayachandran (2013) finds suggestive evidence that facilitated access to credit can induce contract take-up and thus deter forest owners from cutting trees to meet emergency needs.

    “The author finds suggestive evidence that facilitated access to credit can induce contract take-up and thus deter forest owners from cutting trees to meet emergency needs.”
    Quote in the paperNot a substantial claim0 of 1 sources checked
    • cites Jayachandran (2013) source

  • Probably not a substantial claim: may not pass S4 (based).

    Interpretationreasoning

    If the reduction in the availability of subsidised rural credit implies an increase in deforestation, then farmers are credit constrained and they are changing from the modern to the traditional technology.

    “PROPOSITION 3. If the reduction in the availability of subsidised rural credit implies an increase in deforestation, we can conclude that: (i) farmers are credit constrained, and (ii) they are changing from the modern to the traditional technology.”
    Quote in the paperNot a substantial claim

  • Classified as probably not a substantial claim.

    Study design and conductreasoning

    There is a trade-off between internal versus external validity in our setting.

    “Finally, it is important to mention that there is a trade-off between internal versus external validity in our setting.”
    Quote in the paperSubstantial claim

  • May combine two claims.

    Premisecitation

    Enforcement inspections tend to be more frequent and less costly in areas with relatively lower travel times and lower access costs.

    “In particular, inspections tend to be more frequent, and their costs lower, in areas with relatively lower travel times.As such, low enforcement costs occur in locations with low access costs(Börner et al., 2014; 2015b).”
    Quote in the paperNot a substantial claim0 of 1 sources checked
    • cites Börner et al., 2014; 2015b

      Couldn’t be matched to a paper in Crossref, so it can’t be checked.

  • May combine two claims.

    Study design and conductreasoning

    Travel times and access costs are reasonably fixed in a short panel of Amazon municipalities, so they should be absorbed in municipality fixed-effects.

    “Yet, because travel times and access costs are reasonably fixed in a short panel of Amazon municipalities, they should be absorbed in municipality fixed-effects.”
    Quote in the paperNot a substantial claim

  • May combine two claims.

    Study design and conductreasoning

    Internal validity is strengthened by restricting the sample to municipalities near the border, while external validity can hardly be achieved in such a large and heterogeneous region.

    “Internal validity is arguably strengthened as we restrict the sample of municipalities to those near the border, while external validity can hardly be achieved in such a large and heterogeneous region.”
    Quote in the paperSubstantial claim

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisecitation

    Alix-Garcia et al. (2013) show that a conditional cash transfer programme increased deforestation in Mexico.

    “Alix-Garcia et al. (2013) show that a conditional cash transfer programme increased deforestation in Mexico”
    Quote in the paperNot a substantial claim0 of 1 sources checked
    • cites Alix-Garcia et al. (2013) source

  • Probably not a substantial claim: may not pass S3 (load-bearing).

    Premisecitation

    Zwane (2007) finds evidence of a positive relationship between income and forest clearings in Peru.

    “Zwane (2007) finds evidence of a positive relationship between income and forest clearings in Peru.”
    Quote in the paperNot a substantial claim0 of 1 sources checked
    • cites Zwane (2007) source
86 of 86

  • The authors state this as an assumption.

    The policy affected deforestation only through the credit channel.

    “The validity of our 2SLS approach is dependent upon the assumption that the policy affected deforestation only through the credit channel.”

  • The authors state this as an assumption.

    The rationing in the availability of subsidised credit induced by Resolution 3545 exogenously tightened credit constraints.

    “We thus rely on Banerjee and Duflo (2014) and assume that the rationing in the availability of subsidised credit induced by Resolution 3545 exogenously tightened credit constraints.”

  • The authors state this as an assumption.

    Farmers with irregular titling suddenly lost access to subsidised credit sources and faced an exogenous variation in credit.

    “Under this assumption, farmers with irregular titling suddenly lost access to subsidised credit sources and faced an exogenous variation in credit.”

  • The paper relies on this without support.

    Road density is constant in the short time window around the adoption of Resolution 3545.

    “Although road density is expected to be constant in the short time window around the adoption of Resolution 3545, and therefore absorbed in fixedeffects, it may interact with conservation efforts to generate potentially confounding dynamic trends.”

  • The paper relies on this without support.

    Loaned amounts approximate property size in rural credit contracts.

    “The contract-level data used in our analysis, however, do not contain information on property size.We therefore use loaned amounts as an approximation, since properties are used as collateral in rural credit contracts and, as such, smaller properties are typically associated with smaller contracts.”

  • The paper relies on this without support.

    Population density is a valid proxy for labour mobility across the biome border.

    “To test this hypothesis, we examine whether population density (the log of total population per municipal area) changed inside versus outside the biome after Resolution 3545.”

  • The paper relies on this without support.

    There was no coordinated scaling-up of site-specific conservation efforts on either side of the Amazon Biome around the time Resolution 3545 was implemented.

    “Furthermore, to the best of our knowledge, there was no coordinated scaling-up of site-specific conservation efforts on either side of the Amazon Biome around the time Resolution 3545 was implemented.”

  • The authors state this as an assumption.

    Resolution 3545 affected deforestation only through the credit channel.

    “The available evidence as well as the actual implementation of the new policy indeed lend support to the assumption that the policy affected deforestation only through the credit channel.”
    “Second, that the policy affected deforestation strictly through the credit channel.”

  • The paper relies on this without support.

    The supply of credit offered at the market rate by agents other than official (private and public) banks and credit cooperatives was not directly affected by the policy change.

    “Yet, the supply of credit offered at the market rate by agents other than official (private and public) banks and credit cooperatives was not directly affected by the policy change.”

  • The paper relies on this without support.

    Resolution 3545 was implemented in July 2008.

    “because the policy was implemented in July 2008”
10 of 10

Claims other papers make about this one

Each is checked against this paper’s own text: does it say what the citing paper says it does?

  • Credit is frequently unavailable to such farmers unless it is for livestock farming, which generally benefits abundantly from it.

    “Credit, for one, is frequently unavailable to such farmers unless it is for livestock farming, which generally benefits abundantly from it (Assunção et al., 2020).”

    From Beyond the “supply chain” framing: Cattle ranching as a vanishing mediator of deforestation and dispossession in the Brazilian and Colombian Amazon (2026) · cites this paper as Assunção et al., 2020

    The Institutional Context says livestock farming is relatively more dependent on official rural credit, and Section 5.3 finds that restrictions reduced cattle-ranching credit more than crop-farming credit. But the paper also discusses credit loans for crop farmers; it does not say credit is generally unavailable unless used for livestock, or establish that livestock farming benefits abundantly from it. Page numbers are unavailable in our copy. (LLM, conf=0.86)

    Experimental — accuracy not yet measured

  • Assunção et al. estimate that Central Bank rural credit restrictions reduced deforestation by 60%.

    “Heilmayr et al. 58 show that the Amazon Soy Moratorium reduced deforestation by 35%, while Assunção et al. 55 estimate that Central Bank rural credit restrictions reduced deforestation by 60%.”

    From Health benefits of reduced deforestation in the Brazilian Amazon (2024) · cites this paper as [55]

Cites

Flagged first, then by citations

Research works printed but not linked: 1

  1. Panayotou, 1994, ‘An econometric analysis of the causes of tropical deforestation: the case of Northeast Thailand’, 192

Cited by

Sorted by citations

Related

Authors
Assunção, J., Gandour, C., Rocha, R., & Rocha, R.
Affiliations
  • Pontifícia Universidade Católica do Rio de Janeiro (BR)
  • Universidade Federal do Rio de Janeiro (BR)
Corresponding author
Assunção, Juliano
ORCID
Venue
The Economic Journal
Publisher
Oxford University Press (OUP)
Published
2019-11-22
Volume
130
Issue
626
Pages
290-330
ISSN
  • 0013-0133 (ISSN-L)
  • 1468-0297
DOI
10.1093/ej/uez060
OpenAlex
W2989787287
Semantic Scholar
d09128fd1b2a37db56311793736377e4fdeaee1d
Cited by
174
References
59
Citations by year
2026: 32 · 2025: 27 · 2024: 24 · 2023: 33 · 2022: 20 · 2021: 25 · 2020: 9 · 2018: 2
FWCI
6.95
Type
journal article
Language
en
Open access
Licence
Locations
  • The Economic Journal (publishedVersion, cc-by-nc)
  • RePEc: Research Papers in Economics (submittedVersion)
Funders
  • Children's Investment Fund Foundation
  • Conselho Nacional de Desenvolvimento Científico e Tecnológico
Topics
  • Physical Sciences › Environmental Science › Global and Planetary Change › Conservation, Biodiversity, and Resource Management
  • Social Sciences › Safety Research › Agricultural economics and policies
  • Life Sciences › Agricultural and Biological Sciences › Soil Science › Land Rights and Reforms
Keywords
rural credit, deforestation, forest policy, cattle ranching, access to credit, agricultural credit, Brazilian Amazon, environmental policy

About these checks

Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.

Claims read by deepseek-v4.1-flash under definition version 3 (extract-v3) on 2026-11-03.

Classified by jev-1.13-20260917 (gold-guideline-v0.2) on 2026-11-03.

Cited sources are checked by gpt-6-sol.

Statistics and arithmetic are recomputed, not judged.

Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.

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