Cash Crops and the Development-Environment Tradeoff

Abstract

Cash crops can boost local economies but compete with forests for land. We quantify this tension in Benin using variation in cashew cultivation driven by heterogenous local responses to global cashew price volatility. We develop high-resolution cashew maps using a deep learning model trained on field data and pair it with gridded GDP data. Cashew cultivation degrades forests without generating detectable income gains. Muted income effects reflect (i) concentrated benefits obscured in coarse GDP data, and (ii) farmers valuing income-smoothing benefits of cashews over first order gains. Costbenefit calculations show each dollar earned from cashews incurs $16 in ecological costs.