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This paper looks at the impact of the introduction of new soybean technologies on the clearing of natural vegetation (forest and savanna) in southern Brazil, the Brazilian Cerrado, and Santa Cruz, Bolivia. The paper looks at how technological change interacted with other government policies and examines general equilibrium effects on product and labor markets as well as the direct on-farm effects. In southern Brazil new technologies made large-scale mechanized soybean production more profitable. This led to the displacement of many small farmers that moved to the Brazilian Amazon and clearing forests for agriculture. It may have also encouraged deforestation in southern Brasil itself. In the Brazilian Cerrado and Santa Cruz Bolivia the new technologies made it possible to plant soybeans in areas where it had previously not been economically feasible. Large areas of forest and other natural vegetation were cleared as a result.
