Counterproductive counternarcotic strategies? A study of the effects of opium eradication in the presence of imperfect capital markets and sharecropping arrangements

Camilla Andersson (camilla.andersson@econ.umu.se)
Additional contact information
Camilla Andersson: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden

No 809, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: 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.

Keywords: Opium; Eradication; Futures markets; Sharecropping (search for similar items in EconPapers)
JEL-codes: Q12 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2010-05-19
New Economics Papers: this item is included in nep-agr
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.econ.umu.se/DownloadAsset.action?conten ... Id=3&assetKey=ues809 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:umnees:0809

Access Statistics for this paper

More papers in Umeå Economic Studies from Umeå University, Department of Economics Department of Economics, Umeå University, S-901 87 Umeå, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by David Skog (david.skog@umu.se).