Farm Tenancy

By: EconomyWatch   Date: 21 April 2010

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Farm Tenancy is another form of land ownership system which resulted from the increasing population. With the increase in population the job opportunities were reduced and people had to look for other avenues to sustain themselves. This search ended in the renting of land to other people for a given period of time and earning money by sharing half of the profit from the production. In democratic countries more than half of the land is being plowed by tenants and the tenure of tenancy is fixed by the owners. Different types of tenancy is practiced around the world based on the amount of payment.

Types of Tenancy

Tenancy can be classified on the basis of payment by the tenant to the owner. They are:

  • Occupational Tenancy-This term suggests that the tenant has to pay a rent for occupying the land of the owner though for a fixed period of time. Sometimes the farmer uses his own animals to plow the field. This form is specially practiced in Latin America where it is known as a colonate system. Even a few years back it existed in Germany under a different name.
  • Cash Tenancy- In this type of tenancy, the tenant pays a fixed rent to the owner. The tenant bears the fruits of labor, may it be the loss or gain. The tenant is responsible for everything regarding the field. Since this form requires a lot of patience and the ability to bear risk the tenant usually is a one who is economically solvent.
  • Rent in Kind- In this form of tenancy, the tenant pays a fixed amount of the products he grows as a farmer. The tenant is not required to pay any amount of money in this form of farm tenancy. This is usually practiced where small pieces of land are rented out by the owners.

  • Share Tenancy- This is practiced mostly in the developing countries. Share tenancy is another form of rent in kind. In this form of tenancy the owner and the tenant share the output among themselves. Previously the share was determined by the productivity of land but in later times when the demand of land for share tenancy increased the output was equally shared by both the parties that is a fifty-fifty share. In such a circumstance the incentive to produce more on the part of the farmer is lost since has to share the gross output . The farmer eventually loses all interest in producing more. Therefore, the growth in agricultural productivity lessens and eventually becomes stagnant. This system ultimately leads to dependency and indebtedness for the farmers because the agreement which is often drawn up for one year is extended without any concern for the farmer culminating in the farmer's loss of money, land and the share yielded from the field. Moreover, extremely small plots of land are rented by the owners which also makes things difficult for the farmer eventually who is reduced to a landless labor living in poverty.

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