Risk and Incentives in Sharecropping: Evidence from Modern US Agriculture

Eugene Canjels
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Eugene Canjels: New School University, https://www.economicpolicyresearch.org

No 1998-19, SCEPA working paper series. from Schwartz Center for Economic Policy Analysis (SCEPA), The New School

Abstract: A new data set shows the extensive use of sharecropping in modern U.S. agriculture particularly in wheat, rice, corn, soybeans, and cotton. For these five crops, I investigate the importance of risk and three types of incentive problems that are commonly regarded to 'cause' sharecropping. A direct measure of risk from county level weather data is constructed and this measure is a major explanation in the choice between cash and share contracts. The potential for exploitation of the land by the tenant is also an important determinant of tenancy choice. Finally, for three inputs, fertilizer, petroleum products, and herbicides & pesticides, incentive problems in the provision of inputs by the tenant are shown to exist. For these inputs, I show that sharecroppers use less than cash renters, but this difference is eliminated when the costs of these inputs are also shared.

Keywords: agriculture; sharecropping; risk; incentives (search for similar items in EconPapers)
Pages: 57 pages
Date: 1998-10
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:epa:cepawp:1998-19

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