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Counterproductive counternarcotic strategies? A study of the effects of opium eradication in the presence of imperfect capital markets and sharecropping arrangements.
Umeå University, Faculty of Social Sciences, Department of Economics.
2010 (English)Report (Other academic)
Abstract [en]

In this paper, we model the economic incentives surrounding opium crop production at farm level in Afghanistan. Specifically, we examine the impact of eradication policies when opium is used as a means of obtaining credit, and when the crops are produced in sharecropping arrangements. The theoretical analysis suggests that when perfect credit markets are available, an increased risk of having the opium poppy eradicated will lead to less land being allocated to opium poppy. Thus, with perfect credit markets, the eradication policy is likely to have the intended effect of lowering opium crop production. However, when opium is sold on futures markets as a means of obtaining credit, the effects of opium eradication are no longer clear-cut: in some cases the outcome may actually increase the land allocated to opium poppy. Finally, the results indicate that when opium is produced in sharecropping arrangements, increased risk of opium eradication will unambiguously make the tenants worse off, while landlords may actually benefit.

Place, publisher, year, edition, pages
Umeå: Institutionen för nationalekonomi, Umeå Universitet , 2010. no 809, 40 p.1-40 p.
Series
Umeå economic studies, ISSN 0348-1018 ; 809
Keyword [en]
Opium, Eradication, Futures markets, Sharecropping
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:umu:diva-33867OAI: oai:DiVA.org:umu-33867DiVA: diva2:318481
Available from: 2010-05-10 Created: 2010-05-07 Last updated: 2012-02-23Bibliographically approved
In thesis
1. Changing the risk at the margin: Smallholder farming and public policy in developing countries
Open this publication in new window or tab >>Changing the risk at the margin: Smallholder farming and public policy in developing countries
2010 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis consists of a summary and four self-contained papers.

Paper [I] examines whether the implementation of a social safety net programme in Ethiopia has affected the value, risk and composition of farmers‟ crop portfolios. The empirical analysis suggests that the value and risk of the crop portfolio have not been altered due to the programme. However, the programme seems to have brought about some changes in the land allocated to different crops.

Paper [II] studies how a social safety net affects farmers‟ (dis)investments in productive assets. More specifically, it studies how the Productive Safety Net Programme in Ethiopia has changed livestock and tree holdings. The results indicate no significant effect on livestock holdings, but a significant increase in tree holdings.

Paper [III] investigates if there is a problem of adverse selection in formal microlending in rural Bangladesh. The results indicate that farmers who only borrow formally have a shadow price of capital that is substantially higher than the average informal interest rate. This suggests that farmers that only borrow formally are perceived as poor credit risks by informal lenders.

Paper [IV] explores the economic incentives surrounding the cultivation of opium poppy in Afghanistan. Specifically, it examines the impact of eradication policies when opium is used as a means of obtaining credit, and when the crops are produced in sharecropping arrangements. The results indicate that both these features are likely to affect the outcome of eradication policies.

Place, publisher, year, edition, pages
Umeå: Nationalekonomi, Umeå universitet, 2010. 25 p.
Series
Umeå economic studies, ISSN 0348-1018 ; 810
Keyword
Smallholder farming, Public policy, Informal risk strategies, Microcredit, Opium eradication, Development economics, Food policy
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:umu:diva-33854 (URN)978-91-7459-022-7 (ISBN)
Public defence
2010-06-04, Samhällsvetarhuset sal s305, Umeå universitet, Umeå, 10:15 (English)
Opponent
Supervisors
Available from: 2010-05-14 Created: 2010-05-07 Last updated: 2012-02-23Bibliographically approved

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CiteExportLink to record
Permanent link

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Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
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  • Other style
More styles
Language
  • de-DE
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  • nn-NO
  • nn-NB
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  • Other locale
More languages
Output format
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  • asciidoc
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