Economic Impacts of Payments for Environmental Services on Livelihoods of Agro-extractivist Communities in the Brazilian Amazon

Rural communities in the Brazilian Amazon rely on manioc, produced in a swidden-fallow system that uses land cleared from forest areas. Increased agricultural production could reduce fallow period length with implications for manioc flour (farinha) production. We hypothesize that payments for environmental services (PES) programs may exacerbate reduction of fallow periods, thereby reducing per stem farinha productivity. To understand the household scale economic impacts of avoided deforestation under PES programs, we conducted interviews in 158 households from 32 communities in the Brazilian state of Amazonas. Using regression models, we assessed which variables most influenced farinha production, and calculated production costs and total revenues, with and without a PES program. Manioc yield increased by 22.83 kg per household per year for each additional year that the forest was left to recover before being cleared. Although production costs were higher for land cleared from older secondary forests, net profits on land cleared from primary forests were still higher. Total income from PES programs, when added to the secondary forest manioc profit, were higher than the foregone production in primary forest areas. However, when we considered only direct cash payments, we identified potential trade-offs. We conclude that PES programmes should consider possible long-term effects of payments on the livelihoods of participants.