Agricultural encroachment into low-governance forest frontiers including vast tracts of hitherto unclaimed public lands and indigenous territories represents one of the most abrupt land-use transitions in tropical countries. This often results from spontaneous migration from more heavily-settled regions or direct subsidies from land redistribution programs prescribed by central-government policy. Here, we briefly review the spatial scale and environmental consequences of agrarian resettlement schemes in tropical forest countries, and explore the policy contradictions of competing government agencies in shaping conflicting rationales for either conservation or rural development. We focus on the largest tropical forest region on Earth, the Brazilian Amazon, which continues to attract one of the largest waves of land-tenured and landless migrant farmers from elsewhere in Brazil. We argue that the environmental and monetary costs associated with these resettlement schemes are rarely outweighed by the socioeconomic benefits accrued to translocated farmers. Land-use planning in lowland tropical forest regions like Amazonia would benefit from a truly integrated policy framework that bridges the divide between conflicting government sectors, particularly in relation to smallholder occupation of previously intact forest areas, which increasingly contributes with a significant fraction of deforestation in many regions.