Panel Data Evidence on Upland Agricultural Land Use in the Philippines: Can Economic Policy Reforms Reduce Environmental Damages?

How do farmers in poor, remote upper-watershed areas of developing countries respond to price signals? Until relatively recently, it was widely assumed that most upland agriculture was primarily for subsistence. If correct, this has important implications for the design of upland development programs, as subsistence farmers, by definition, are beyond the reach of economic policies, and programs addressing upland poverty alleviation or environmental protection must depend on direct interventions. Such interventions, including command and control policies to conserve natural resources, remain at the core of most resource conservation strategies in countries of the humid tropics. In this respect, most upland development and conservation strategies no longer reflect the reality of upland agriculture. While pockets of pure subsistence production persist in least accessible regions, road and other infrastructure improvements have brought the majority of upland farmers into contact with markets and thereby have transformed the basis of production decisions. Accumulating evidence indicates that farmers in remote areas are increasingly willing to specialize in production of commercial