Eco-efficiency in Brazilian Amazonian agriculture: opportunity costs of degradation and protection of the environment

Aiming to assist the environmental sustainability of the Brazilian Amazonian agriculture, this article developed an eco-efficiency index, indicating the possible limits to maximize economic and environmental objectives, taking into account the best practices in the municipalities of the region. Shadow prices of degraded areas and forest preservation were also estimated using data envelopment analysis with directional distance functions. The results indicate that, on average, the analyzed municipalities are able to expand the production and the forest areas by 38% and reduce degraded areas and their inputs in the same proportion. The shadow prices allowed the estimation of the annual opportunity cost of the degraded areas and the preservation of the forest on the farms. The first, US$ 3,131,571, represented 0.04% of the annual output value, indicating that the internalization of that cost should be a low burden for the eco-efficient producer. The second, the total cost of preserving 80% of the area of property, represented US$ 120,890,662 or 1.7% of the annual income of the biome producers studied. Therefore, the main conclusion of this work is that the internalization of negative and positive externalities of agricultural production in the Amazonian biome does not make agricultural production economically unfeasible in the region. In addition, the reimbursement of damages avoided by carbon sequestration, through the Clean Development Mechanism (CDM) established by the Kyoto Conference, should further increase the economic and environmental sustainability of agriculture in the area.