SOAS Research Online

Abstract

A scrutiny of the theoretical literature on share tenancy reveals that there are two broad approaches to the study of the causes of tenancy, its efficiency implications and its dynamics: i.e. the neoclassical and the Marxist. Neoclassicals consider share tenancy as essentially a contractual arrangement, a rational response to imperfections in rural markets with the aim of improving allocative efficiency in a static setup. The imperfections may arise due to the inherent characteristics of rural markets such as risk, uncertainty, indivisibility, information asymmetry and moral hazard problems. By contrast, Marxists view share tenancy as essentially a production or class relation and a method of surplus appropriation, and a cause of agrarian stagnation in a dynamic context. The applicability of these two approaches to share tenancy is examined with primary data collected from three villages in Orissa in Eastern India. It is concluded that the Marxist approach is more powerful in studying share tenancy, in its addressing the problem in the context of a differentiated class society. Our study lends support to certain aspects of the Marxist approach, while some others are rejected.