Our primary study area, the Ouro Preto do Oeste region of central Rondônia is located in southwestern Brazil near the border of Bolivia. The climate of the region is classified as humid tropical, or AWi in the Köppen classification system. The region (and state of Rondônia) experiences a distinct dry season in July and August. Temperatures in the region average 24° C with precipitation totals near 2300 mm resulting in both dense and open tropical forests. However, most of the land has been converted to pasture with small patches of perennial (e.g. coffee and cacao) and annual crops (e.g. corn and rice) (Pedlowski et al. 1997). Topography is a mixture of rolling hills and flat valleys surrounding several steep and rocky inselbergs. Soils vary throughout the study region based on underlying geology, slope, and climate however are dominated by Podzólico Vermelho Amarelo and Podzólico Vermelho Escuro, roughly equivalent to oxisols and ultisols in US soil classification system.

Central Rondônia is representative of the ‘arc of deforestation’ across the southern Brazilian Amazon and falls in a priority area for monitoring and managing development pressures. The state of Rondônia experienced significant in-migration with the construction of two federally funded highways in the beginning of the 1960s, representing a guided effort of the Brazilian government to secure the control over a greater area within the Amazon. From 1964 to 2005, the national land reform agency (INCRA) settled 84,434 families in the state including many in new settlements recognized and regularized by INCRA in the past 10 years. Deforestation increased within the state of Rondônia from approximately 2% in 1977 to 20% by the first wave of the survey (1996) to over 60 percent by 2005. Moreover, researchers have found approximately 80% of the state deforestation to occur within 12.5 km of the major highway, BR-364 (Alves 2002a), running from the southwest through the study region to the northern capital, Porto Velho. Our expanded study region is comprised of the micro-regions located along this axis of deforestation, including Ariquemes, Ji-Paraná, and Cacoal and represents substantial variations in soils, production activities (i.e., reliance on dairy, beef, annual or perennial crops), types and timing of settlements, land titling and conflicts, extent of deforestation, rates of land abandonment and forest regeneration, and welfare.

Within the micro-regions of Ji-Paraná and Cacoal, our focal (and original) study area of Ouro Preto do Oeste is divided into six municipalities (Ouro Preto do Oeste, Vale do Paraíso, Urupá, Mirante da Serra, Nova União, and Teixeirópolis) that cover approximately 6000 km2. Deforestation in Ouro Preto do Oeste is strongly driven by market access and time since settlement, with some new settlements within the study area exhibiting lower rates of accumulated deforestation but higher rates of annual deforestation. The region is relatively stable with little in or out migration, contrary to conventional wisdom, but similar to other Amazonian settlements. Another much remarked upon trend in the Amazon is the shift into cattle. According to the 2000 round of the survey, over 70% of the average household lot was in (active or non-active) cattle pasture, with many households engaged in both calf production and dairy, taking advantage of farmgate pickup of milk by various processing plants. Allocation of land to pasture increased to 87% by 2005, typical of a general trend towards specialization by farm households, few of whom are maintaining highly diversified portfolios of crops, perhaps reflecting greater economies of scale than of scope. While this still leaves a fairly significant amount of forest on each lot by international standards, the clearing of forest has been substantial over our time period, with forest decreasing from an average of 17 hectares per lot in 1996, to 12 hectares in 2000, to 7 hectares by 2005.