Agricultural production amid conflict: Separating the effects of conflict into shocks and uncertainty

This paper examines the effect of conflict on agricultural production of small farmers. First, an inter temporal model of agricultural production is developed in which the impact of conflict is transmitted through violent shocks and uncertainty brought about by conflict. We test the model using a unique household survey applied to 4800 households in four micro-regions of Colombia. Our findings suggest households learn to live amid conflict, albeit at a lower income trajectory. When presence of non-state armed actors prolongs, farmers shift to activities with short-term yields and lower profitability from activities that require high investments. If violence intensifies in regions with presence of non-state armed actors, farmers concentrate on subsistence activities. (C) 2017 Elsevier Ltd. All rights reserved.