The Development-Environment Tradeoff from Cash Crops: Evidence from Benin

This paper investigates the development-environment tradeoff from cultivating cash crops. We classify cashew plantations between 2015-2021 across Benin, one of West Africa’s largest cashew producers, using a deep learning model trained on data from field visits. We document large income gains from exposure to these cashew plantations, but at the expense of nearby forest cover. We identify this tradeoff with cross-sectional comparisons on household survey data, two-way fixed effects with panel data, and a shift-share instrumental variables design using global cashew price shifts to instrument local cultivation. A 10 percentage point increase in land share under cashews increases local GDP by 1.3%, but reduces forest cover by 2.6%. Cost- benefit calculations show that doubling cultivation would generate $USD 66 million in aggregate income gains but cost $USD 147 million in terms of forest loss.