Economic impacts of pasture degradation at the municipal level: Evidence from Minas Gerais, Brazil

Pasture degradation represents a major challenge to the sustainability of Brazilian livestock production, with impacts that go beyond environmental damage and extend to economic and social dimensions. Few studies have sought to assess the magnitude of these impacts, particularly at the municipal level. Accordingly, this study aimed to quantify the effects of pasture degradation on municipal economies between 2000 and 2022. The case study focused on municipalities in the state of Minas Gerais, which is known for its long-standing tradition in livestock production. We used a methodological approach combining fixed-effects panel data econometric models to assess economic impacts and local Moran's I spatial autocorrelation analysis to identify spatial patterns of degradation. The econometric analysis indicated that pasture degradation had a negative impact on key economic indicators, such as GDP per capita and production values in major agribusiness sectors. The spatial analysis revealed critical clusters of high degradation and low economic productivity, especially in eastern Minas Gerais. Overall, the findings suggest that the restoration of degraded pastures, supported by public policies such as the Low-Carbon Agriculture plan (“ABC Plan”) and the 2012 Forest Code is essential not only for meeting environmental targets but also as a strategy to enhance municipal economic and productive performance.