Development economics - Sharecropping
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economics
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published 11/12/2006
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SummaryIn sharecropping contracts with cost sharing, why is the cost share borne by the tenant equal to the output share accruing to him?
Sharecropping is an arrangement or system of farming, prevalent in many Less Developed Countries in which a tenant works on land which he does not own, giving the landowner a share of the output, instead of paying him a fixed rent -typical of fixed rent contracts. The tenant’s output is shared between the landlord and the tenant with a predetermined proportion. There is no fixed part of the rent. Sharecropping with cost sharing is a contract where inputs costs are shared between the landlord and the tenant.
Is it not uncommon to observe that in sharecropping contracts with cost sharing, the cost share borne by the tenant is equal to the output share accruing to him? Why does sharecropping with cost sharing exist? What are the advantages for tenants and for landlords? Do share contracts with the cost share borne by the tenant equivalent to the output share accruing to him exist in the world?
Sharecropping is an arrangement or system of farming, prevalent in many Less Developed Countries in which a tenant works on land which he does not own, giving the landowner a share of the output, instead of paying him a fixed rent -typical of fixed rent contracts. The tenant’s output is shared between the landlord and the tenant with a predetermined proportion. There is no fixed part of the rent. Sharecropping with cost sharing is a contract where inputs costs are shared between the landlord and the tenant.
Is it not uncommon to observe that in sharecropping contracts with cost sharing, the cost share borne by the tenant is equal to the output share accruing to him? Why does sharecropping with cost sharing exist? What are the advantages for tenants and for landlords? Do share contracts with the cost share borne by the tenant equivalent to the output share accruing to him exist in the world?
Table of Contents
- Different forms of tenancy
- The neoclassical economist approach of sharecropping
- Why the sharecropping contract is superior to the others contracts
- The landlord is efficient for managing, and the tenant for supervising
- Transaction costs and other inputs
- The adverse risk is a dilemma for sharecropping
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