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Conversion of forests for agricultural lands is the most important cause of deforestation in the tropics. For this reason it is often argued that conservation of tropical forests can only be successful if drastic measures are undertaken to protect the forest area from encroachment by shifting cultivators. In this paper we show that under certain conditions encroachment may also have beneficial effects for the conservation of primary forests, because the threat of encroachment acts as a “natural brake” on the pace at which concessionaires open up primary forest areas. Hence, while encroachment may inflict severe ecological damage on secondary forest areas, it may also promote conservation of virgin forests. The net effect of encroachment may be either beneficial or detrimental, depending on society’s preferences with respect to conservation of primary and secondary forests.

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