The Fungus That Stole a Generation’s Future

Environmental shocks do not end when the emergency is over. Their effects can persist for decades, reshaping education, income and social mobility across entire generations.

That is the conclusion of From Fields to Futures: The Lasting Effects of Crop Diseases on Education and Earnings, published in the World Bank Economic Review by Yuri Barreto, postdoctoral researcher at Bocconi University, and Rodrigo Oliveira of UNU-WIDER.

The study begins with what appears to be a local story — the collapse of cocoa production in the Brazilian state of Bahia following the outbreak of the witches’-broom fungus — but arrives at a much broader conclusion: when an agricultural shock becomes permanent, it can turn into an intergenerational social shock.

“Many economic studies focus on temporary crises,” Barreto explains. “What we show instead is what happens when a community is unable to return to its previous condition. In that case, employment, income, family investments and even children’s educational opportunities all change.”

From Agricultural Collapse to Human Capital Loss

The research shows that children who grew up in areas hit by the cocoa crisis were:

• less likely to complete primary and secondary education;
• more likely to earn lower wages as adults;
• more likely to enter informal employment.

The strongest effects were found among children aged between 0 and 12 at the time of the shock.

According to the authors’ estimates, young people exposed to the crisis were 10.5% less likely to complete high school and earned wages 5.1% lower than their unaffected peers.

For Barreto, the mechanism is straightforward: “When household income collapses and adequate social protection systems are absent, families react by cutting investment in education. Children start working earlier, and this produces permanent consequences for their economic prospects.”

The paper documents a 30% increase in child labor in the affected areas.

Bahia’s Unintended Experiment

Until the 1980s, Brazil was the world’s second-largest cocoa producer. The state of Bahia depended almost entirely on cocoa cultivation. Then came witches’-broom, a fungal disease affecting cocoa trees that wiped out 80% of production in less than a decade.

Around 250,000 workers lost their jobs.

But the study’s central point is that the region never truly managed to reinvent itself. Unlike other agricultural crises studied in economic history, no alternative crops emerged to replace cocoa.

Dependence on monoculture, concentrated land ownership and environmental constraints prevented a real economic transition.

“Bahia was extremely vulnerable because its entire economy revolved around a single crop,” Barreto says. “When cocoa collapsed, it was not just an agricultural sector that failed — the entire local economic structure fell apart.”

The data show that agricultural land values declined by nearly 50%, while the total value of agricultural assets dropped by 71%.

The Return of Semi-Feudal Labor

One of the study’s most striking findings concerns the transformation of labor relations.

As many landowners went bankrupt, the meeiro system spread across the region — a form of sharecropping in which families cultivate small plots of land while handing over half of the harvest to the landowner.

According to the authors, these arrangements encouraged the expansion of family and child labor and often created conditions close to exploitation.

“We did not observe only a reduction in income,” Barreto says. “We also saw the emergence of a new labor organization — more precarious and increasingly dependent on family and child labor.”

For the researchers, this structural transformation helps explain why the effects of the crisis proved so persistent.

A Warning for the Climate Future

Today, the paper speaks to far more than the Brazilian experience.

As climate change accelerates, the spread of fungi, pests and crop diseases is expected to intensify, especially in regions heavily dependent on monocultures — from cocoa in West Africa to maize in Zambia and palm oil in tropical economies.

The research suggests that the costs of these shocks may run far deeper than commonly estimated.

“When we talk about climate change, we tend to think about crop losses or rising food prices,” Barreto concludes. “But the real danger is that these shocks can alter people’s life trajectories. An agricultural crisis can become an educational and social crisis lasting an entire generation.”