Resource information
As countries increasingly strive to
transform their economies from agriculture-based into a
diversified one, land rental will become of greater
importance. It will thus be critical to complement research
on the efficiency of specific land rental arrangements --
such as sharecropping -- with an inquiry into the broader
productivity impacts of the land rental market. Plot-level
data for a matched landlord-tenant sample in an environment
where sharecropping dominates allows this paper to explore
both issues. The authors find that pure output sharing leads
to significantly lower levels of efficiency that can be
attenuated by monitoring while the inefficiency disappears
if inputs are shared as well. Rentals transfer land to more
productive producers but realization of this productivity
advantage is prevented by the inefficiency of contractual
arrangements, suggesting changes that would prompt adoption
of different contractual arrangements could have significant benefits.
