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Does Sharecropping Affect Long-term Investment? Evidence from West Bengal's Tenancy Reforms

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  • Klaus Deininger
  • Songqing Jin
  • Vandana Yadav

Abstract

Although transfer of agricultural land ownership through land reform had positive impacts on productivity, investment, and political empowerment in many cases, institutional arrangements in West Bengal--which made tenancy heritable and imposed a prohibition on subleasing--imply that early land reform benefits may not be sustained and gains from this policy remain well below potential. Data from a listing of 96,000 households in 200 villages, complemented by a detailed survey of 2,000 owner-cum-tenants, point toward enormous excess demand for land rental and suggest that a continued inefficiency of sharecropping is exacerbated by strong disincentives to investment in soil fertility and irrigation. These reduce profits by at least 20%, making schemes to pay out landlord interests economically and financially viable. Copyright 2013, Oxford University Press.

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  • Klaus Deininger & Songqing Jin & Vandana Yadav, 2013. "Does Sharecropping Affect Long-term Investment? Evidence from West Bengal's Tenancy Reforms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(3), pages 772-790.
    • Handle: RePEc:oup:ajagec:v:95:y:2013:i:3:p:772-790
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    File URL: http://hdl.handle.net/10.1093/ajae/aat001
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    Cited by:

    1. Nozilakhon Mukhamedova & Richard Pomfret, 2019. "Why Does Sharecropping Survive? Agrarian Institutions and Contract Choice in Kazakhstan and Uzbekistan," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(4), pages 576-597, December.
    2. Eskander, Shaikh M.S.U. & Barbier, Edward B., 2017. "Tenure Security, Human Capital and Soil Conservation in an Overlapping Generation Rural Economy," Ecological Economics, Elsevier, vol. 135(C), pages 176-185.
    3. Klaus Deininger & Songqing Jin & Yanyan Liu & Sudhir K. Singh, 2018. "Can Labor-Market Imperfections Explain Changes in the Inverse Farm Size–Productivity Relationship? Longitudinal Evidence from Rural India," Land Economics, University of Wisconsin Press, vol. 94(2), pages 239-258.
    4. Leonhardt, Heidi & Penker, Marianne & Salhofer, Klaus, 2019. "Do farmers care about rented land? A multi-method study on land tenure and soil conservation," Land Use Policy, Elsevier, vol. 82(C), pages 228-239.
    5. World Bank, 2015. "India Land Governance Assessment," World Bank Publications - Reports 24420, The World Bank Group.
    6. Muraoka, Rie & Jin, Songqing & Jayne, T.S., 2018. "Land access, land rental and food security: Evidence from Kenya," Land Use Policy, Elsevier, vol. 70(C), pages 611-622.
    7. Deininger,Klaus W. & Nagarajan,Hari Krishnan & Singh,Sudhir K. & Deininger,Klaus W. & Nagarajan,Hari Krishnan & Singh,Sudhir K., 2016. "Short-term effects of India's employment guarantee program on labor markets and agricultural productivity," Policy Research Working Paper Series 7665, The World Bank.
    8. Deininger, Klaus & Savastano, Sara & Xia, Fang, 2017. "Smallholders’ land access in Sub-Saharan Africa: A new landscape?," Food Policy, Elsevier, vol. 67(C), pages 78-92.

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