Most modern mines in the developing world are located in rural areas, where agriculture
is the main source of livelihood. This creates the potential of negative spillovers to farmers
through competition for key inputs (such as land and labor) and environmental pollution.
To explore this issue, we examine the case of gold mining in Ghana. Through the estimation
of an agricultural production function using household level data, we find that mining has
reduced agricultural productivity by almost 40%. This result is driven by polluting mines,
not by input availability. Additionally, we find that the mining activity is associated with
increase in poverty, child malnutrition and respiratory diseases. A simple cost-benefit analysis
shows that the fiscal contribution of mining would not have been enough to compensate
affected populations.