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i actually can't figure out what people think is the problem with the correct answer choice. do some posters have the idea that “but” and “also” can only be used within the “not only… but also” construction?
if so, that's definitely not right. both “but” and “also” are extremely common transition words that appear in a variety of contexts:
i can still come on thursday, but i'll be late.
James is a straight-A student and also a star athlete.
chocolate can make you feel good, but it can also make you fat.
it's (hopefully) obvious that all of these sentences are fine. just because you learn one particular construction -- such as “not only… but also” -- don't become myopic about the use of basic words.

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just as importantly -- even if “not only… but also…” were grammatically correct here, it would still be wrong! this construction doesn't make any sense in the given context, because the context provides a contrast: the clearing of forests created farmland and so on (= GOOD THINGS), but it also caused erosion and large-scale deforestation (= BAD THINGS).
you can't use “not only X but also Y” in this kind of context, because that construction is meant for things that reinforce each other: if X is GOOD THINGS, then Y needs to be more GOOD THINGS. similarly for bad things.

make sure you know why the following are correct/incorrect:
chocolate can make you feel good, but it can also make you fat (correct)
chocolate can not only make you feel good but also make you fat (grammatically fine, but incorrect -- unless you think getting fat is a good thing)
not only can chocolate make you feel good, but it can also make you fat (grammatically fine, but incorrect -- unless you think getting fat is a good thing)

caffeine can give you energy, but it can also increase your mental alertness (grammatically fine, but incorrect)
caffeine can not only give you energy but also increase your mental alertness (correct)
not only can caffeine give you energy, but it can also increase your mental alertness (correct)

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