Productivity Differences under Alternative Tenurial Contracts in Agriculture and Access to Credit: Evidence from Rural West Bengal, India

Abstract

Since the days of Marshall (1890), sharecropping has been the subject of academic discourse concerned with static efficiency and its impact on agricultural innovations and productive efficiency. Whilst exploring the theoretical and empirical debates on sharecropping efficiency, this paper makes a renewed attempt to examine the productivity differences under alternative modes of cultivation. Based on a primary survey of 203 households encompassing 303 agricultural holdings in rural West Bengal, this paper also attempts to identify factors which are responsible for productivity differences under alternative tenurial contracts. The empirical evidence and subsequent statistical analysis confirms the equal efficiency hypothesis of Cheung (1969) and asserts that variation in productive efficiency among tenurial contracts is due to the variation in input used in agriculture where the access to credit is observed to play a significant role in input utilization and in achieving productive efficiency in agriculture. Sri Lankan Journal of Agricultural Economics Vol.10/11 (2008/2009) 1-17 DOI: http://dx.doi.org/10.4038/sjae.v10i0.4588