Agricultural expansion is the main driver of deforestation in Myanmar. We analyzed the effectiveness of a national policy intervention on agricultural encroachment in state forests in Taungoo District in Myanmar from 2010 to 2020. The policy aims to stop agricultural encroachment and reforest encroached areas through farmers’ participation in an agroforestry community forestry. We applied an integrated approach that involved a land cover change analysis together with a household survey about encroachment behavior. The remote sensing analysis for the years 2010, 2015 and 2020 showed the land cover change pattern and an increase in agricultural encroachment from 9.5% to 18.5%, while forests declined from 62.8% to 51.9%. The survey showed that most farmers (91%) believed that the policy intervention did not lead to a change in their encroachment behavior or farm size. The main reasons that incentivized encroachment were stated to be livelihood needs, immigration due to marriage and increased accessibility due to road construction. The main reason for reducing encroachment was plantation establishment, leading to a loss of land for encroaching farmers. In conclusion, the integrated approach showed that the policy intervention did not decrease encroachment, whereas other factors influenced encroachment behavior. We recommend solving interministerial conflicts of interest related to encroachment in Myanmar and using an integrated approach for future studies.