Share tenancy is important in Palanpur, accounting for about 20 per cent of the cultivated area at any time. And share-cropping has attracted a lot of attention recently from economic theorists. Tenancy will be the subject matter of the whole of this chapter.
The theory of share-cropping tenancy was examined in detail in § 3.2 above. In that section we also looked at the question of why share-cropping tenancy arises and saw how it might be related to risk-sharing or to the incentive to labour.
In § 5.1, starting from the theory presented in Chapter 3, we note some further explanations for tenancy (not only share-cropping) which have to do with the abandonment of some critical assumptions in the formal analysis of that chapter, notably the assumption that the production function is the same for all cultivators and that there are constant returns to scale in cultivation. In giving up these assumptions we refer to management as a kind of input and stress its importance.
In § 5.2 we turn to a detailed description of the form which share-cropping tenancy takes in Palanpur, the division of costs and output, the extent to which tenants are supervised and their decisions subject to negotiation, and the balance of supply and demand in the market for leased-in land. Bringing theory and institutions together we are enabled to see how far theory throws light on why tenancy arises at all in the village, what role it plays, and why it takes the form of share-cropping rather than some other arrangement such as cash tenancy. Another central question to which we shall address ourselves is this: given that leasing takes the form of share-cropping, what determines the shares of landlord and tenant?
We examine statistically in § 5.3 the notion, a central feature in the discussion of § 3.2, that output per bigha will differ between owner-cultivated and tenanted holdings. The hypothesis that there is a difference can be tested in various ways according to what is being compared. We shall investigate output per bigha for all crops taken together at the level of the farm in Chapter 6 and for individual wheat plots in Chapters 7 and 8. In § 5.3 we examine individual crops (particularly wheat) and sum across plots within the farm. The issues which these different approaches raise are not the same and will be compared in Chapter 9.
§ 5.4 is concerned with the detailed location of tenanted plots, where they lie in relation to landlord's and tenant's owned and self-cultivated holdings. This allows us to see to what extent leasing performs the role of land-consolidation--allowing cultivators to arrange their land in convenient parcels of adjacent plots. We present maps showing the broad location of land parcels leased and look at the patterns that emerge. We look at the hypothesis that leasing is playing the role of land consolidation and also at some other hypotheses on the location of tenanted plots.