Agricultural Policy, Market Barriers, and Deforestation: The Case of Mexico's Southern Yucatan

This paper examines the linkages between agricultural policies and deforestation in a development frontier of Southern Mexico, focusing on support programs targeted at buffering farmers from structural reforms. We argue that local barriers to market participation condition the responsiveness of farmers to program incentives, thereby constituting a key channel through which agricultural policies impact the environment. An econometric model parameterizes the influence of two programs, PROCAMPO and Alianza para el Campo, on cultivation. Consistent with an economic environment characterized by market barriers, results suggest that program support, even when decoupled from production decisions, significantly determines land use and deforestation. (C) 2008 Elsevier Ltd. All rights reserved.