More important small farmers usually tend to adopt technolog

More important, small farmers usually tend to adopt technologies of cattle raising which are land intensive and inefficient. The main reasons behind are restricted access to finance education, technology and the very high inter-temporal discount rates which are intrinsically related to poverty. From the individual perspective, extensive ranching becomes a rational choice in the attempt to maximize the mining of (unpaid) natural resources (Kennedy, 1964; Saudoulet and Janvry, 1995). From a policy perspective, therefore, the crucial issues are, firstly, to identify the structural factors conditioning the choice of output, technologies, and land intensity made by farmers, with special focus on the poor small farmers. Secondly, to identify the best strategies to foster the increase of land productivity within the cattle raising sector, as well as the shift of inefficient cattle raising to other agricultural activities with less intensive uses of land. Thirdly, how best to impose quantitative regulations and taxes as well as other price based incentives to make cattle ranchers account for the environmental costs caused by their productive activities (Assunção et al., 2013c; Assunção, 2014).
Historical perspectives Extensive cattle raising was, since early ach receptors times, one of the main drivers of the territorial settlement in Brazil. The economic rationale was, first, the natural ability of cattle to circumvent the lack of transport infrastructure. Furthermore, within the legal framework of sesmarias, property rights were based upon the effective use of land, an thus extensive ranching acted as an entitlement to landowners (Abreu, 1960; Goulart, 1965). In the Northeast Region, cattle raising started in the late 16th century as a complementary activity to sugar plantations stretching in the southern direction by the São Francisco River Valley and in the northwest direction toward the State of Piauí. At the beginning of the 18th century cattle herd in the region are estimated to have reached more than one million animals (Alencastre, 1857; Abreu, 1954, 1960; Simonsen, 1957; Furtado, 1968; Andrade, 1973). In the extreme South, cattle was first introduced by the Jesuit Missions in the early 17th century. As Portuguese Indian slave raids besieged the Missions pushing them beyond the Uruguay River, cattle herds escaped to the highlands of Vacarias where, according to estimates, approximately 100,000 wild animals grazed by the mid-18th century (Santos, 1984; Weech, 1992; Bell, 1998). The third wave of cattle ranching took place in the southern and western areas of the State of Minas Gerais which complemented the São Francisco Rivers ranches to feed the mining areas in the 18th century and later on the city of Rio de Janeiro as the Colonial and Imperial capital of Brazil (Restitutti, 2006; Carrara, 2007). Finally, in the mid-20th century, a new wave of cattle ranching unfolded toward the Northwest regions of the country, reaching the Amazon frontier in the 1970’s (Hecht and Cockburn, 1990; Bergamasco, 1995; Faminow, 1998; Dias et al., 2016). The trends are welcome from both efficiency and environmental perspectives. Higher stocking ratios require smaller area for pastures, decreasing the pressures on clearing both in the forest and the cerrado areas. Demographic factors, including the delayed effects of urbanization as well as the decline of fertility rates in rural areas, played important roles. Not captured by the Census data, in recent years government policies to control deforestation started to play an important role (Assunção et al., 2012, 2013a,b,c) Fig. 1 summarizes the evolution of cattle herds according to Brazilian states during the whole 20th century. The picture shows that, up to 1940, the Brazilian herd was practically stagnated (annual growth in the range 0–1% p.a.). Strong growth took place after 1940 (3–4% p.a.), with oscillations around a declining trend which was briefly interrupted during the last decade.