Development economics - Sharecropping

Résumé du document

In 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?

Extraits

[...] The landless tenant can gain access to land for food crop thanks to a contract. The right use of the land to grow food crops is a significant element for the tenant. The tenant has permission to use the land as he wants to, but the land is established by the landlord. In this way, he can sell or consume the crop produced. The tenant enjoys his freedom to manage the harvest. Furthermore, in the Yemayenkye contract, the tenant's right of land is stable and inheritable. [...]

[...] thus, cost sharing contract becomes obvious under enforceable inputs. Therefore, the tenant's equation for the enforceable input is: Y = + ( - (px. When sharecropping with cost sharing is used, the tenant's incentive is ruined. Finally, to have an optimal equal sharing, the tenant's work effort has to be enforceable. So why does sharecropping with cost sharing and equal sharing exist? According to Braverman and Stiglitz's model, if the landlord determines the amount of purchased input, ( is indeterminate. [...]

[...] Although the participants bear the inputs, it is not a sharecropping contract but just an arrangement in cocoa production. In Ghana, two types of sharecropping contracts with cost sharing exist. The first contract is Nhwesoo. The tenants manage already-established cocoa farm and in return get a share of the output from the cocoa harvest. Tenants are responsible for the weeding, spraying and harvesting of cocoa and provide labour (input). He can hire farmers, but in this case he is in charge to pay them. Tenants usually take one third of the output. [...]

[...] 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 accrued to him? Sharecropping with cost sharing is a contract where input costs are shared between the landlord and the tenant. The inputs are the amounts of energy and money put into a farm in order to make a product such as skills, time, effort, expertise, experience and qualifications that the tenant brings to his work. [...]

[...] Everything leads to say that when the landlord is not present in the land, the effort of the tenant may be lower. Due to the lack of supervision, the tenant can lie about the outputs. Nobody can check the tenant's effort and work. If the landlord visits the tenant only once a year, in the view to recovering his share of outputs, it is easy for the tenant to dupe him. In addition, the tenant has more information about the harvest than the landlord. Consequently, the tenant makes decisions. This is a typical case of the problem of the information asymmetry. [...]