Land Titles and Deforestation: Evidence from Peru's Oil Palm Sector

Abstract

The rapid expansion of oil palm (Elaeis guineensis) production in the Amazon adds urgency to the quest to understand the relationship between land titling initiatives and deforestation. Titling could rein in deforestation associated with lawlessness, but it also could encourage capital intensive agriculture like oil palm. ‘Forest-friendly’ titling includes regulations that oblige new owners to conserve forest, but these can be dodged if forest is cleared preemptively. To understand the effect of these initiatives, it is important to look closely at both the spatial distribution and temporal sequencing of titling, deforestation, and oil palm planting. Using a novel property dataset (n = 6,072) and fixed-effects regression modeling, we analyze how land titling over 20 years in the Amazonian department of Ucayali, Peru influences the timing and extent of deforestation on individual parcels with and without oil palm and among smallholder and industrial producers. We find that 75% of oil palm is planted on titled land, compared to only 30% for other regional crops. Deforestation on titled palm parcels often occurs preemptively, just before the titling process, especially in industrial plantations and few oil palm properties retain the 30% forest cover required by Peru’s Forestry Law. Key informants suggest that the profitability and political power associated with growing oil palm encourages preemptive deforestation while contradictory regulations and limited resources hinder enforcement of regulations.

Keywords: Amazon, commodity agriculture, land formalization, Forest governance, environmental regulations, land use change