Reducing deforestation in tropical forest areas requires effective environmental governance and the transformation of agricultural systems towards less land-demanding production forms. A large amount of research investigates the effect of enforcing environmental regulations on reducing tropical deforestation, but less studies focus on the effect of environmental governance on the transformation of agricultural systems. We show that enforcing environmental regulation can have a positive impact on the restoration of degraded pasture areas besides its initial impact to lower deforestation. Good environmental governance can be therefore seen as a precondition for technical improvements and increased agricultural productivity. However, since restoration requires technical and financial assets, its implementation is strongly influenced by the socio-economic background and the local production circumstances of a farmer. We observe that the large share of restored pastures is situated on well-endowed larger farms whereas the majority of small farmers has difficulties to adapt their production system and overcome potentially destructive habits. As for small farmers we also show that basic literacy and farm-management are key to promote land-system change but that they are often overseen by classical rural extension approaches. Our findings are important to support policies aiming at reconciling the forces of growing global demand for food production, while improving the wellbeing of the rural population and assuring landscape integrity and environmental wellbeing
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