Agricultural production amidst conflict : the effects of shocks, uncertainty and governance of non-state armed actors

Abstract

This paper examines the effect of conflict on agricultural production of
\nsmall-farmers. We use a unique household survey applied to 4.800
\nhouseholds in four micro-regions of Colombia. The survey collects
\ndetailed information on households’ economic conditions, incidence of
\nviolent shocks, and presence of non-state armed actors. We separate the
\neffects of conflict on direct impacts, measured through conflict-induced
\nshocks, and indirect impacts, measured through years of presence of nonstate
\narmed actors. The results show the association between lower
\nagricultural production and conflict transmits through different channels.
\nIn regions with an intense conflict, yearly agricultural revenues per
\nhectare and investments are lower, and households concentrate production
\non seasonal crops and pasture. Presence of non-state armed actors is
\nassociated with an immediate increase in production costs, lower access
\nto formal financial institutions, and lower investments. The results
\nsuggest that households are affected by indirect and direct impacts that
\nmay induce sub-optimal agricultural decisions. Although traditional
\nreconstruction efforts are crucial, post-conflict policies should also aim to
\nreduce uncertainty and improve the rule of law to foster increases in
\nproduction.