Soy Expansion, Environment, and Human Development: An Analysis across Brazilian Municipalities

In the last decades, Brazil has become one of the largest soybean producers and exporters in the world. Although dedicated policies have been implemented since the 1960s, the recent rapid transition towards an agricultural system largely based on soy has had a strong impact on the country's socio-economic structure-not only in terms of land and labour markets but also on its diverse ecosystems. According to the extant literature, soy has had a beneficial impact on local human development, measured by the human development index (HDI) of the municipalities. However, there is a lack of empirical studies assessing the impact of soy expansion on the single dimensions of the HDI (longevity, education, and income) to disentangle the indirect effects of socio-environmental change while controlling for other local dynamics. To fill this gap, we applied econometric methods to a novel dataset combining municipal-level data on soy production with socio-economic and environmental data for the period 1991-2010. Our findings confirm the positive relation between soy expansion and the HDI at local level, but this relation differs between different HDI dimensions. The marginal benefits of soy expansion are increasing for the income dimension but decreasing for education and longevity. On the other hand, changes in soy productivity (a proxy for agricultural intensification) have a more complex impact on the HDI and its dimensions, but in general its marginal benefits are decreasing over time. Further research could expand the time series once more up-to-date information becomes available.