Does Credit Affect Deforestation? Evidence from a Rural Credit Policy in the Brazilian Amazon

This executive summary evaluates the impact of Brazilian Central Bank Resolution 3,545, a 2008 policy that conditioned rural credit in the Amazon Biome on proof of environmental compliance. The study finds that the policy significantly reduced credit concessions and subsequent deforestation, particularly in cattle-ranching areas, suggesting that cattle ranchers face binding credit constraints that influence land clearing.

• Resolution 3,545, introduced in mid-2008, required borrowers in the Brazilian Amazon Biome to provide proof of environmental regulation compliance, land claim legitimacy, and rural establishment regularity to access rural credit.
• The policy led to a significant reduction in rural credit concessions between 2008 and 2011, with an estimated BRL 2.9 billion (USD 1.4 billion) in credit not contracted. The majority of this reduction, BRL 2.6 billion (USD 1.3 billion), occurred in cattle-specific contracts.
• The reduction in rural credit is estimated to have prevented the clearing of over 2,700 km2 of forest area from 2009 through 2011, representing a 15% decrease in deforestation for that period.
• The impact on deforestation was primarily concentrated in municipalities where cattle ranching is the main economic activity; in contrast, deforestation in crop-oriented municipalities was not significantly affected by the resolution.
• The policy altered the distribution of credit contract sizes. For cattle, there was a decrease in medium and large contracts and an increase in small contracts. For crops, only a decrease in medium contracts was documented.
• The results indicate that cattle ranchers are credit-constrained, meaning their deforestation activities are sensitive to the availability of subsidized credit. Crop farmers appear less dependent on these subsidies or use them for productivity intensification rather than land expansion.
• The study warns that because of these credit constraints, other policies that increase financial resources for farmers, such as payments for environmental services, could potentially lead to higher deforestation rates if not carefully designed.

APA

Assunção, J., Gandour, C. C. E., & Rocha, R. (2013). Does Credit Affect Deforestation? Evidence from a Rural Credit Policy in the Brazilian Amazon. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2013/01/Does-Credit-Affect-Deforestation-Executive-Summary-English.pdf

Chicago

Assunção, Juliano, Clarissa C. e Gandour, and Romero Rocha. Does Credit Affect Deforestation? Evidence from a Rural Credit Policy in the Brazilian Amazon. Climate Policy Initiative, 2013. https://www.climatepolicyinitiative.org/wp-content/uploads/2013/01/Does-Credit-Affect-Deforestation-Executive-Summary-English.pdf.

Wikipedia

{{cite report |last1=Assunção |first1=Juliano |last2=Gandour |first2=Clarissa C. e |last3=Rocha |first3=Romero |title=Does Credit Affect Deforestation? Evidence from a Rural Credit Policy in the Brazilian Amazon |publisher=Climate Policy Initiative |date=January 2013 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2013/01/Does-Credit-Affect-Deforestation-Executive-Summary-English.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{assuno2013does, author = {Assunção, Juliano and Gandour, Clarissa C. e and Rocha, Romero}, title = {{Does Credit Affect Deforestation? Evidence from a Rural Credit Policy in the Brazilian Amazon}}, institution = {Climate Policy Initiative}, year = {2013}, month = jan, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2013/01/Does-Credit-Affect-Deforestation-Executive-Summary-English.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }