Skills, Partnerships and Tenancy in Sri Lankan Rice Farms



propose that we re-interpret the second input as labor. In this case, a clearer justification must be given as
to why tenant may hold an absolute or comparative advantage in providing labor.

In the next section of this paper, we formalize this more general idea by assuming that landlords
are time constrained and tenancy is really a solution to a time allocation problem. The two key inputs are
skills and time, and they are combined in different proportions to perform each farm activity. We
introduce three new features to the standard principal-agent model: 1) tenants are not assumed to have an
absolute advantage in any type of skill; 2) landlords are assumed to have time constraints; and 3) landlords
are allowed to retain parts of their holding for owner-farming (i.e. there may not be a single optimal
contract for the entire holding). These generalizations allow us to formulate empirically testable
propositions that accurately represent the environment that is studied, and provide a sound theoretical basis
for the empirical analysis.

The second section of this paper develops an empirical test of farming skill effects on contract
choice. A significant obstacle to empirical analysis is the difficulty of measuring farming skills. A few
studies [Skoufias 1991, 1995, Lanjouw 1999] have established that skilled farmers lease-in larger extents
of land, but have not examined the interesting issue of contract choice. Unlike in the previous studies, an
index of farming skills is constructed from the observed production data using a stochastic production
frontier approach. This method does not require panel data or rely on the restrictive assumption that skills
are time invariant.

The third section describes the data and formulates testable propositions. The fourth section
discusses the results, and the fifth section concludes with a summary of the main results and policy
implications.



More intriguing information

1. Job quality and labour market performance
2. Strategic Effects and Incentives in Multi-issue Bargaining Games
3. The resources and strategies that 10-11 year old boys use to construct masculinities in the school setting
4. The name is absent
5. Ventas callejeras y espacio público: efectos sobre el comercio de Bogotá
6. Transport system as an element of sustainable economic growth in the tourist region
7. ¿Por qué se privatizan servicios en los municipios (pequeños)? Evidencia empírica sobre residuos sólidos y agua.
8. The name is absent
9. The Role of State Trading Enterprises and Their Impact on Agricultural Development and Economic Growth in Developing Countries
10. Uncertain Productivity Growth and the Choice between FDI and Export
11. Constrained School Choice
12. The name is absent
13. The name is absent
14. Fiscal Reform and Monetary Union in West Africa
15. Towards a Strategy for Improving Agricultural Inputs Markets in Africa
16. The name is absent
17. BILL 187 - THE AGRICULTURAL EMPLOYEES PROTECTION ACT: A SPECIAL REPORT
18. The name is absent
19. The name is absent
20. The name is absent