Colombia is the world’s major producer of coca leaves. Those parts of Colombia where coca thrives are characterized by poverty, remoteness, weak institutional authority, violence, and drug trafficking.
An important pillar of Colombia’s efforts to curb the production of this illicit crop is to induce farmers to substitute coca for a viable legal alternative. On the one hand this is done by providing active support to farmers, helping them to grow a legal alternative crop instead and bring it to market. On the other hand price stabilization schemes have been put into place compensating farmers when faced with price declines for their legal produce with the aim of keeping them from turning to coca cultivation instead.
In our paper, we identify the extent to which farmers respond to variation in the price of five of the most promising, financially most attractive, legal alternatives when deciding how much coca to plant – coffee, sugar, palm oil, cocoa, and banana. We do this using a rich, spatially very detailed dataset that contains yearly information on the amount of coca grown in each of over 31,000 villages (veredas) in Colombia over the period 2001-2018.
We find a strong, robust, response of coca farming to price changes of coffee and banana: when prices of these crops go up (down), less (more) coca is found in veredas that are more suitable for the production of these two crops. Banana and coffee cultivation are, in contrast to sugar and palm oil cultivation, both labor intensive processes, and thus represent a much more viable alternative to the, typically small-scale, coca farmers than the much more capital intensive (mechanized) cultivation of sugar cane or palm oil. On top of this, we show that these findings are driven by veredas with better access to markets. In the remotest parts of Colombia the cost of bringing one’s legal produce to market are simply too high to make the cultivation of legal crops a viable alternative to growing coca.
In sum, our results provide important perspective to Colombia’s effort to curb coca production by stimulating farmers to grow legal alternative crop(s) instead. Such efforts can be expected to be most successful when focused on legal alternative crops that are grown labor intensively, and when implemented in places that are already relatively well integrated into Colombia’s legal economy. In Colombia’s remotest parts, heavily plagued by coca(ine) production and its associated problems , such efforts will have little effect and the government should instead consider to first focus on improving these places’ access to Colombia’s main markets. Without doing that there will be little hope for successful alternative crop growing initiatives in these places.
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