When a soy farmer buys pasture and turns it to soy production, this does not have a direct effect on deforestation and is in keeping with Brazil's "Soy Moratorium", an agroindustry-led initiative to limit deforestation by stopping direct encroachments of soy-fields into closed moist forest.

However, the rancher who has sold his land to the soy farmer can now, due to the high price of pasture land, afford to purchase up to five times the amount of forestry land and turn it into pasture.

This indirect connection between soy production and deforestation has been hypothesized for many years, but has, until now, not been measured and quantified. "The main challenge is that the areas of interest are often separated by large distances," said Eugenio Arima, from University of Texas at Austin in the US and lead author of the study, which has been published in Environmental Research Letters (ERL).

"We estimate that a 10% reduction of soy in old pasture areas would have decreased deforestation by as much as 40% in heavily forested counties of the Brazilian Amazon between 2003 and 2008," he told environmentalresearchweb. "This shows that the voluntary moratorium on primary forest conversions by Brazilian soy farmers has failed to stop the deforestation effects of expanding soy production."

Arima and his colleagues used three different models to estimate this phenomenon of indirect land-use change, and also implemented a new statistical methodology capable of linking frontier deforestation to distant events, such as the expansion of soy production in a settled agricultural area. The results from the three models – ordinary least squares (OLS), fixed-effects without time lag for soy (FE1), and fixed effects with time lag for soy (FE2) – are shown in the figure. "We introduced a time-lag into one of the models as land-use change is not an immediate effect," explained Arima.

Arima believes indirect land-use change could complicate Brazil's efforts to achieve REDD (Reducing Emissions from Deforestation and forest Degradation) targets. "For example, the government could support a biofuels project to cut emissions, but this project may indirectly be increasing deforestation in another part of the country," said Arima. "Thus, environmental policy in Brazil must pay attention to indirect land-use change."

The results also suggest that supply chains crossing international boundaries may stimulate Amazonian deforestation via indirect land-use change. That is, as global demands for Brazilian agricultural commodities grow, Amazonian deforestation may increase.