The Economics of Sharecropping: A Study of Two Tarai Villages of Nepal
The issue of resource allocation under share tenancy system has always been a fruitful source of controversy in economic literature. The Marshallian economists believe that the share tenants apply variable inputs less intensively than the fixed rent tenants or owner operators while the Cheungian...
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| Format: | Thesis |
| Language: | English English |
| Published: |
1993
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| Subjects: | |
| Online Access: | http://psasir.upm.edu.my/id/eprint/8042/1/FEP_1993_2_A.pdf |
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| Summary: | The issue of resource allocation under share
tenancy system has always been a fruitful source of
controversy in economic literature. The Marshallian
economists believe that the share tenants apply
variable inputs less intensively than the fixed rent tenants or owner operators while the Cheungian
economists argue that there would be no difference in
input intensity across the tenure systems. This study
examines the empirical validity of these two
approaches,using evidence from the two tarai villages of Nepal.
In particular, this study examines the differences in input and output intensities among three different
types of plots of the paddy farmers -- owned (A) and
shared (B) plots of mixed share tenants and shared (C)
plots of pure share tenants -- for three different cases i.e., A-B, A-C and C-B. Mixed share tenants are farmers
who rent in land besides cultivating own land. Pure
share tenants are farmers who rent in land with no land
of their own.The significance of these differences in
input and output intensities were measured by employing
two test procedures. An F-test based on Hotelling's T2
statistic was employed to measure the significance of
differences in input and output intensities. The second
test, which is based on Shaban's methodology, measures
the impact of tenancy on input and output intensities
by isolating the pure tenancy effect from the total
variation in input and output intensities. Shaban's
methodology was modified to in corporate two new
variables, variety of paddy and plot size, in the model.
The findings of the study reveal that the total
differences in input and output intensities are partly
explained by the differences in plot specific
characteristics and partly by tenancy effect. Among the
plot specific characteristics, plot size is found to be
the most important variable in accounting for the
differences in input and output intensities.
The results of the study also indicate that the
share tenants (plots B and C) apply inputs less
intensively than the owner operators (plot A). within
sharecropping, the pure share tenants (plot C) use more non-shared inputs compared to the mixed share tenants
(plot B).
After accounting for the impact of plot size, soil
quality and the variety of paddy, the impact of
sharecropping is to use lower inputs and produce lower
output. The impact of sharecropping is highly
significant, especially in the case of non-shared
inputs such as compost, bullock power and family
labour. These findings support the Marshallian school
in the sharecropping controversy. This is consistent
with Shaban's conclusion. |
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