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The study finds that Resolution 3.545, which conditioned rural credit on environmental compliance, effectively reduced deforestation in the Brazilian Amazon by restricting funds, particularly for large-scale cattle ranching. Between 2008 and 2011, the policy led to a reduction of approximately 2.9 billion BRL in rural credit, preventing the clearing of over 2,700 km² of forest. The impact was most significant in cattle-dominated municipalities, suggesting that ranchers are more credit-constrained and dependent on subsidized loans for land expansion than crop farmers.