Contract choice and enforcement in an agrarian community: Agricultural tenancy in upland Java

Abstract

This study explores the conditions under which a certain contract is preferred to others, through an intensive survey of an upland village in West Java. Despite an obvious difficulty in enforcing the terms of share contract in a highly complex intercropping system, no significant difference in allocative efficiency was found between share tenancy and other forms of land tenure. The results indicate that share tenancy was chosen only by the landlords who had the ability to enforce contractual terms at a low opportunity cost.

Notes

National Agricultural Research Centre, Tsu‐Kuba City, Japan and Aoyama‐Gakuin University, Tokyo. This article contains part of the results of a research project commissioned by the UN/ESCAP Regional Co‐ordination Centre for Research and Development of Coarse grains, Pulses, Roots and Tuber Crops in the Humid Tropics of Asia and the Pacific (CGPRT Centre). The complete study is entitled Soybean‐based Farming Systems at Village Level in Indonesia. The CGPRT Centre is not responsible for the opinions expressed in this article.