The economic impacts of the diffusion of agroforestry in Brazil

The diffusion of agroforestry systems is among the priority actions to reduce carbon emissions in Brazil. However, the economic impacts of agroforestry are still poorly understood. We evaluate the impacts of the diffusion of agroforestry systems on the cattle herd and the total value of agricultural production in Brazil. We use panel data models with municipal-level information from the Agricultural Censuses 2006 and 2017. We check the robustness of our estimates combining several empirical strategies, including spatial panel data model and instrumental variable estimators. We also consider that agroforestry impacts may differ according to the biome and crops used in the integrated systems. Our results highlight that agroforestry systems' diffusion had positive and relevant impacts on the stocking rate (heads/pasture area). Agroforestry may have also stimulated the shift from cattle raising to other activities with higher gross added value, such as soybean. In fact, the most significant economic impacts of agroforestry occur when the diffusion of agroforestry systems is related to soybean cultivation.