Abstract Anecdotal evidence suggests that, in stateless regions in Colombia, the establishment of oil palmFootnote 1 plantations generates more forced migration than the introduction of coca crops. We provide a theoretical model to study this phenomenon where an agent, allied with the illegal armed group that controls a region, chooses between buying an agricultural good from peasants or producing it himself by evicting farmers from their lands. We compare two crops that differ in their labor intensity. Results indicate that it is more likely that the agent finds it optimal to displace peasants in the case of the less labor intensive crop. 1The oil palm is the tree from whose fruit one derives palm oil, the commercial crop. For convenience, we employ the terms interchangeably. Keywords: Forced DisplacementConflictColombiaIllegal CropsGame TheoryJEL codes: C70D23D74O13O17 ACKNOWLEDGEMENTS For useful comments and discussion, I am grateful to Juan Vargas, Jurgen Brauer, Daniel Mejía, Germán Lambardi, Jean-Paul Azam, participants at a workshop on the Colombian conflict held at Universidad del Rosario, Bogotá, Colombia, on 16 November 2010, and to two anonymous referees. Notes 1The oil palm is the tree from whose fruit one derives palm oil, the commercial crop. For convenience, we employ the terms interchangeably. 2Fedepalma, available at http://www.fedepalma.org/documen/2008/area_cultivada.pdf. 3 http://www.sawitwatch.or.id/index.php?option=com_content&task=view&id=60&Itemid=1. 4Mejia and Posada (Citation2008). 5Angrist and Kugler (Citation2005). 6UNODC (Citation2009) 7See Thoumi (Citation2003) and Diaz and Sanchez (Citation2004). 8For a detailed discussion on the topic see for instance Rubin (Citation2000), Carpenter (Citation2004) and Rubin and Sherman (Citation2008). 9Ibáñez and Moya (Citation2007). 10Los planes de Bogotá y la realidad de la vida (Bogotá’s plans and life’s reality), article in El Pais newspaper (Spain), 20 May 2009. 11CODHES (Citation2008). 12Defensoría del Pueblo (Citation2002). 13See Ibáñez and Velásquez (Citation2006) for a complete description and analysis on the procedure for registration of internally displaced persons in Colombia. 14 http://ecocrop.fao.org/ecocrop/srv/en/cropView?id=972. 15‘El Zar del Agro’ (The agro czar), article in El Espectador newspaper by Norbey Quevedo H., 16 June 2007. 16President Uribe’s speech during the XXXII National Congress of Oil Palm Producers, Santa Marta, 3 June 2004. 17Ministry of Environment, Housing, and Territorial Development and Ministry of Mines and Energy, Administrative Acts N. 1180 of 2006 and 180782 of 2007 and Decree 2629 of 2007. 18Fedepalma, available at http://www.fedepalma.org/documen/2008/area_cultivada.pdf. 19See for instance the article ‘If Colombia Is Winning Its War, Why the Fleeing?’” by John Otis, Time Magazine, 1 September 2009. 20See UNHCR (Citation2005) and Mingorance (Citation2006). 21For an interesting discussion on the impact of this law see Duque (Citation2010). 22Defensoría del Pueblo (Citation2005), Inter-American Court of Human Rights (Citation2003). 23Masiva compra de tierras a víctimas en Montes de María y Catatumbo (Massive land adquisition in Montes de Maria and Catatumbo), article in El Tiempo newspaper (Colombia) 30 March 2009, Más de 120 familias del sur de Bolívar están en litigio con la familia samaria Dávila Abondano (More than 120 families in litigation with the Dávila Abondano family from Santa Marta), article appeared in Cambio Magazine (Colombia), 7 October 2007 and Davila (Citation2007). 24The harvested area is defined as the number of hectares, of the total planted area, that are actually yielding, which occurs five or six years after planting for oil palm. 25As we will show later, when agent R decides to appropriate peasant’s land it evicts all peasants from the region. 26More generally, the fraction (1-l) can be interpreted as the time devoted to any other activities inside or outside his farm, such as leisure, cattle farming, etc. 27The establishment period includes land cleaning and preparation, and planting while the operational phase covers weeding and harvesting, among others 28The information for oil palm corresponds to a plantation of more than 200 hectares located in the region of Santander. The production costs may vary according to the region and to the size of the plot, but this can be taken as a representative example. 29See the Appendix for calculations. 30UNHCR (Citation2005). 31The negligible cost of displacement for the armed group seems to be a realistic assumption given that threatening the population is probably not very costly once an army is established. 32We assume agent R is a price taker with respect to qj which means he does not have market power on the processed good. This assumption is not necessary for the results but simplifies the analysis. 33UNODC (Citation2009). 34Desplazados y productivos (Displaced and productive), article in El Espectador newspaper (Colombia), 18 February 2008. 35Decrees 3967, 3968 and 3969 of October 2009 and Decree 1970 of 2005.