HOW CROPLAND CONTRACT TYPE AND TERM DECISIONS ARE MADE: EVIDENCE FROM AN ARKANSAS TENANT SURVEY

This study examines land contract decision-making with the use of an eastern Arkansas data set. Estimated probit models used to test contract choice hypotheses support a credit constraint hypothesis, indicating that contract choice is based on: 1) the tenant's financial position and operating expense levels, 2) the size of the operation; 3) alternative uses of agricultural land; and 4) the supply of contracted land. Results indicate limited support for the agency problem hypothesis and reject the risk aversion and farmers managerial ability hypotheses. Regression equations used to select lease term hypotheses indicate that cash rent levels are sensitive to land quality, supply of contract acres, irrigation, and crop produced. Tenant shares of the crop and variable costs are less sensitive to land quality than cash rents. Other variables that influence tenant shares of the crop and variable costs include tenant/landlord social capital, the supply of contracted acres, and crop selection.


Subject(s):
Issue Date:
1999
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/34353
Published in:
International Food and Agribusiness Management Review, Volume 02, Issue 1
Page range:
103-121
Total Pages:
19




 Record created 2017-04-01, last modified 2017-08-22

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