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Arkansas Landlord Selection of Land-Leasing Contract Type and Terms

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Listed:
  • Rainey, Ronald L.
  • Dixon, Bruce L.
  • Ahrendsen, Bruce L.
  • Parsch, Lucas D.
  • Bierlen, Ralph W.

Abstract

Land leasing is a major source of the land input to production agriculture. Responses from a survey of landlords leasing crop land in Arkansas are analyzed to better understand those factors motivating landlords in the type of lease they select and the terms of those leases. Probit models are estimated to determine the relative importance of variables representing credit constraint, agency problem, and risk aversion factors. Regression models then estimate the impact of site, landlord, and tenant characteristics on contract terms - the percentage of crop and cost sharing arrangements between landlord and tenant. Probit results suggest credit constraint factors influence lease-type selection. Risk aversion, managerial ability, and social capital factors are also supported. Regression models show that land and crop characteristics are significant determinants of contract terms.

Suggested Citation

  • Rainey, Ronald L. & Dixon, Bruce L. & Ahrendsen, Bruce L. & Parsch, Lucas D. & Bierlen, Ralph W., 2005. "Arkansas Landlord Selection of Land-Leasing Contract Type and Terms," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 8(1), pages 1-19.
    • Handle: RePEc:ags:ifaamr:8175
    DOI: 10.22004/ag.econ.8175
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    References listed on IDEAS

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    1. Bierlen, Ralph W. & Parsch, Lucas D. & Dixon, Bruce L., 1999. "How Cropland Contract Type And Term Decisions Are Made: Evidence From An Arkansas Tenant Survey," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 2(1), pages 1-19.
    2. Peter J. Barry & LeeAnn M. Moss & Narda L. Sotomayor & Cesar L. Escalante, 2000. "Lease Pricing for Farm Real Estate," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 22(1), pages 2-16.
    3. Otsuka, Keijiro & Hayami, Yujiro, 1988. "Theories of Share Tenancy: A Critical Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 37(1), pages 31-68, October.
    4. Ralph Bierlen & Lucas D. Parsch, 1996. "Tenant Satisfaction with Land Leases," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 18(3), pages 505-513.
    5. Allen, Douglas & Lueck, Dean, 1992. "Contract Choice in Modern Agriculture: Cash Rent versus Cropshare," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 397-426, October.
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    Cited by:

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    2. Pavel Ciaian & d’Artis Kancs & Johan Swinnen, 2010. "EU Land Markets and the Common Agricultural Policy," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 53(3), pages 1-31.
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    4. Jerzy Michalek & Pavel Ciaian & d’Artis Kancs, 2014. "Capitalization of the Single Payment Scheme into Land Value: Generalized Propensity Score Evidence from the European Union," Land Economics, University of Wisconsin Press, vol. 90(2), pages 260-289.
    5. Johanna CHOUMERT & Pascale PHELINAS, 2015. "Farmland Rental Values in GM Soybean Areas of Argentina: Do Contractual Arrangements Matter?," Working Papers 201532, CERDI.
    6. Ciaian, Pavel & Pokrivcak, Jan & Kancs, d'Artis, 2013. "Empirical Evidence of the Distributional Effects of the CAP in New EU Member States," Working papers 157117, Factor Markets, Centre for European Policy Studies.
    7. Ciaian, Pavel & Kancs, d'Artis & Swinnen, Johan F.M. & Van Herck, Kristine & Vranken, Liesbet, 2012. "Institutional Factors Affecting Agricultural Land Markets," Working papers 120251, Factor Markets, Centre for European Policy Studies.
    8. Paulson Nicholas D & Katchova Ani L & Lence Sergio H, 2010. "An Empirical Analysis of the Determinants of Marketing Contract Structures for Corn and Soybeans," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 8(1), pages 1-25, May.
    9. Hignight, Jeffrey & Watkins, K. & Anders, Merle M., 2009. "Economic Analysis of Zero-Grade Rice and Land Tenure," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2009, pages 1-10.
    10. Puddu,Marco & Bartolini, Fabio & Viaggi,Davide, 2012. "Simulation of Land Use and Investment Behaviour under Different Policy Scenarios: Results of the extended farm/household model," Factor Markets Working Papers 132, Centre for European Policy Studies.
    11. Viaggi, Davide & Raggi, Meri & Puddu, Marco & Bartolini, Fabio, 2013. "Farm/Household-level Simulation Results of Testing Policy and Other Scenarios," Working papers 157113, Factor Markets, Centre for European Policy Studies.
    12. Adewale Henry Adenuga & Claire Jack & Ronan McCarry, 2021. "The Case for Long-Term Land Leasing: A Review of the Empirical Literature," Land, MDPI, vol. 10(3), pages 1-21, March.
    13. Baldoni, Edoardo & Ciaian, Pavel, 2023. "The capitalization of CAP subsidies into land prices in the EU," Land Use Policy, Elsevier, vol. 134(C).

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    Keywords

    Land Economics/Use;

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