Indigenous peoples' land rights and agricultural expansion in Latin America: A dynamic panel data approach

Agricultural expansion remains an important cause of deforestation in Latin America. There is an on-going debate about whether increasing agricultural productivity leads to land-sparing or Jevons paradox. At the same time, recognizing the customary rights of indigenous peoples and local communities can be particularly effective at slowing down deforestation. We consider ten Latin American countries over the period 1990 to 2010 and use dynamic panel data models to assess whether: a) there is a difference between short-run and long-run effects of improvements in agricultural productivity and b) different land tenure systems are capable of directing the process of agricultural intensification towards land-sparing. Our results allow us to draw a number of stylised conclusions. In general, we observe that higher agricultural productivity per-se is land-sparing, albeit the long-run effects appear smaller than the short-run effects. Most importantly, the overall effect of increased productivity crucially depends on the institutional context. In this respect, increasing the forest area owned or managed by indigenous peoples promotes land-sparing, while increasing the forest area administered by governments and/or owned by private individuals and companies promotes Jevons paradox. In the long-run, the agricultural expansion effects of increasing the forest areas owned by private individuals and companies are stronger than those associated with the expansion of forest areas administered by the government. We also note that the formal recognition of land ownership to indigenous peoples and local communities manifests its beneficial effects in the long-run.