| A micro-analytic approach based on elements of both transaction cost economics and property rights theory is used to explore producer preferences for various farmland leasing contracts. The approach provides a theoretical framework with empirical evidence, with specific relevance for row-crop agriculture in the Cornbelt. The goals are to explain farmer preferences for how the landlord-tenant relationship is governed (specifically, the choice among cash, cropshare and hybrid leases), and to examine the linkages between preferences and both producer and transaction characteristics. Recent survey and anecdotal evidence suggests that this conceptual approach may have important explanatory power.; Lease preferences are explored in an experimental design approach, using a panel of 61 row-crop producers who attended a workshop in August of 1999. Data were collected through the presentation of simulated decision situations, where questions focused on eliciting both explicit and implicit indicators of lease preferences over various case situations.; Results indicate that participating farmers demonstrated a variety of experience with multiple tracts, landlords, and lease types. Transaction costs are important determinants of producer rankings for each of the three lease types considered. Property rights theory, specifically the right of exclusion, is a significant motivator toward the choice of a cash rent lease when economic benefits from this exclusion exist.; Risk sharing does not appear to be a significant driver of preference for the cropshare lease. However, producer attitudes toward the various lease types are highly relevant in determining preferences. Mixed support is provided for the influence of financial strength on contract choice, while important evidence exists that a producer's management or entrepreneurial ability influences his relationship governance choices.; In short, a combined transaction costs and property rights model, that includes both transactional and certain producer characteristics, has substantial explanatory power to address leasing preferences in the Cornbelt. |
