Economic Trend in the Timber Industry of the Brazilian Amazon: Evidence from Paragominas

The timber industry of the Brazilian Amazon is changing rapidly. From a slowly evolving base of extraction in the estuary areas, the industry has expanded along an extensive road network straddling upland forests. This research examines the changes in the economic profile of timber extraction and processing in an old frontier area of Brazil, the county of Paragominas in the Eastern Amazonian state of Para. As one of the earliest centres of upland logging in the Amazon, its experience after twenty years offers insights to the development of the industry as it spreads to other regions of the basin. This paper presents a theoretical model of industry evolution in frontier areas, and analyses industry response in Paragominas to local shortages in raw material, rising international wood prices and increasingly stable property rights.