Land Tenancy Contract Theory Study

There is a long tradition in the land tenancy contracts theory that fixed-rent tenancy is better than sharecropping in resource allocation.This idea derived from Alfred Marshall, we call it Marshall Puzzle.But in reality,we can find that in many countries especially in many Asian countries, sharecropping has existed for a long time as an institutional arrangement.The difference between theory and reality aroused many economists'attentions,the explaination about sharecropping consists morden land tenancy contracts theory.The first part of this paper is the study on kinds of land tenancy contracts theories.Under the conditons of incetives, risk sharing, limited liability, double incentive and threaten of eviciton, sharecropping may exits as a long equilibrium, although this equilibrium is second best. When we studied the models of tenancy contracts, we found that all tenancy contracts lead to efficiency lost. We also studied the relationship between land scale and productivity, and we found that an incomplete information and unemployment agricultural economy, the productivity of small plots is higher than large plots. Because the rual credit market is incomplete, the land marketplace is not prosperity and a land reform is always pushed by strong administrative power.The second part of this paper is an empirical analysis on China's agricultural efficiency during the period from 1949 to 2009.Using the land tenancy contracts to analyse China's agricultural reform and testing its efficiency is an innovation of this paper.We found that institutional factors have great impact on China's agricultural efficiency all along.In this part,we divided the period into two sections:from 1949 to 1978 and from 1978 to 2009.The reason is that the household responsibility system(HRS) was establishedin 1978 and it remains today. During the period from 1949 to 1978, we used some statistical datas based on empirical perspectives and the evidence of existing literatures.During the period from 1978 to 2009,we constructed a regression models of time series to show China's agricultural efficiency in the household responsibility system(HRS) and concluded that the current land tenure system leaded to slow growth of China's agricultural economy after 1993.This paper will answer three questions about China's agricultural efficiency:(1) How were land tenure system determined each period after the founding of the new China? (2)Given a land tenure system,how effective is China's agriculture?(3)If current land tenure system limits economic development, what will be the direction of China's agricultural reform in the future?When we studied China's agricultural efficiency after 1949, we found that the arrangement of China's land tenure system has been 33 years in three phases:peasant's ownership→collectivization→household responsibility system(HRS). The land tenure system during the the period from 1949 to 1952 was peasant's ownership, China's agricultural output got a high growth in this period. The land tenure system during the the period form 1952 to 1978 was collectivization, the growth of China's agricultural output was slow in this period.Moreover,collectivization caused China's agricultural crisis in 1959-1961. The land tenure system during the the period form 1978 to 2009 was household responsibility system, China's agricultural growth was very fast during 1978-1984 period and we think this rapid growth benefited from the prevalence and legitimating of the household responsibility system.The pace of China's agricultural growth declined after 1984,thus the Central Committee of the Communist Party of China Lengthened land to contract deadline 30 years in 1993.This readiustment of land tenure system did not change China's agricultural efficiency.Since China's agricultural output grows slowly in current land tenure system,it is necessary to reform the current land tenure system.After a complete study based on land tenancy contracts theories and a survey of China's agricultural efficiency during the period from 1949 to 2009,this paper gave some policy suggestion:agricultural land privatization,encouraging smallholder production mode and improving mechanization of agricultural production.