TESTING THE IMPACT OF DEFORESTATION ON AGGREGATE AGRICULTURAL PRODUCTIVITY

When tropical forests are cleared, the physical and chemical properties of the soil undergo significant changes leading to nutrient loss, accelerated soil erosion, and declining yields. Using data from Cote d'Ivoire (the country with the highest annual rate of deforestation in percentage terms, i.e. 6.5%) an aggregate, average yield function is estimated which permits a variety of specific hypotheses to be tested. Results indicate that deforestation in the current period contributes positively to yields, and that increases in the cumulative amount of deforested lands cause yields to fall. This aggregate evidence confirms soil scientists' findings that crop yields increase after slash and burn deforestation because of the nutrient content of the ash. However, yields decline over time because of the removal of organic matter, erosion, and movement of cropping activity onto marginal lands. Aggregate yields were also found to respond positively to fertilizer applications, but with diminishing marginal productivity. Computed elasticities show that yield response to cumulative deforested land is quite 'elastic'. Other things being equal, a 10% increase in cumulative deforested land results in a 26.9% decline in aggregate yields.