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Livestock and Land Share Contracts in a Hindu Society

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  • Aryal, Jeetendra P.

    ()
    (PhD Climate Economist-South Asia CIMMYT, WTC building IARI campus, Room no. 223-24, 2nd floor, Pusa Campus)

  • Holden, Stein T.

    ()
    (Norwegian University of Life Sciences (UMB))

Abstract

This paper examines factors related to the existence of a livestock rental market in western Nepal and assesses whether this is associated with caste differentiation and land rental market participation. This study brings new empirical evidence of livestock rental market against the established view that such market does not exist due to moral hazard. Theoretical models for asset- rich (high-caste) households, rich in land and livestock, and asset-poor (low-caste) households are presented providing logical explanations for the existence of a livestock rental market and synergies between livestock and land rental market participation. A combination of double hurdle models and bivariate ordered probit models were applied to test the implications of the models. The empirical evidence was found to be consistent with the theoretical models. Land- and livestock-rich (high-caste) households were more likely to rent out land and/or livestock. Land- and livestock-poor and credit constrained (low-caste) households were more likely to rent in livestock and land. Participation in the two markets was positively correlated indicating synergies that may be due to production and transaction cost reducing benefits. The male labor endowment, partly determined by migration, was a major determinant of livestock rental behavior.

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File URL: http://www.umb.no/statisk/clts/papers/CLTS_WP7_2011.pdf
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Bibliographic Info

Paper provided by Centre for Land Tenure Studies, Norwegian University of Life Sciences in its series CLTS Working Papers with number 7/11.

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Length: 38 pages
Date of creation: 07 Jun 2011
Date of revision:
Handle: RePEc:hhs:nlsclt:2011_007

Contact details of provider:
Postal: Centre for Land Tenure Studies, Norwegian University of Life Sciences, P.O. Box 5003, NO-1432 Aas, Norway
Web page: http://www.umb.no/clts

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Keywords: livestock rental market; land rental market; share contracts; asset poverty; caste; Nepal;

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  1. Jonathan Morduch, 1995. "Income Smoothing and Consumption Smoothing," Harvard Institute of Economic Research Working Papers 1727, Harvard - Institute of Economic Research.
  2. Holden, Stein & Shiferaw, Bekele, 2004. "Land degradation, drought and food security in a less-favoured area in the Ethiopian highlands: a bio-economic model with market imperfections," Agricultural Economics, Blackwell, vol. 30(1), pages 31-49, January.
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  9. Bogale, Ayalneh & Korf, Benedikt, 2005. "To Share or Not to Share? (Non-) Violence, Scarcity and Resource Access in Somali Region, Ethiopia," Institutional Change in Agriculture and Natural Resources Discussion Papers 18842, Humboldt University Berlin, Department of Agricultural Economics.
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Cited by:
  1. Hagos, Hosaena Gebru & Holden, Stein T., 2013. "Reverse-share-tenancy and Marshallian Inefficiency: Landowners’ bargaining power and sharecroppers’ productivity," IFPRI discussion papers 1270, International Food Policy Research Institute (IFPRI).
  2. Aryal, Jeetendra P. & Holden, Stein T., 2011. "Caste, Land and Labor Market Imperfections, and Land Productivity in Rural Nepal," CLTS Working Papers 6/11, Centre for Land Tenure Studies, Norwegian University of Life Sciences.

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