Labor/Land Contracts and Southern Agriculture

Page Summary

Labor/Land Contracts and Southern Agriculture

 

Contractual Mix in Southern Agriculture

Following the Civil War: Experimentation

  1. Gang System - Failed under free labor contracting

  2. Wages - Too much supervision required

  3. Team Production with shares

  4. Eventually a mix became prevalent on plantations: Wage (15%), Sharecrop (50%), Share Tenant and Fixed- Rent (35%)

Determinants of Contract Mix: Risk; Contract Enforcement; and Supervision

Risk - weather, insects, or prices

From Landlord's Perspective

Wage Sharecrop Share Tenant Fixed-Rent

Enforcement of Costs - Leave Before the Harvest

From Landlord's Perspective

Wage Sharecrop Share Tenant Fixed-Rent

Supervision Costs - Incentive to monitor for shirking

From Landlord's Perspective

Wage Sharecrop Share Tenant Fixed-Rent

Relative Resource Endowments of Workers and Landlords Determine Costs of Monitoring

Examples:

Workers

  1. 16 year-old; no mule; and just started farming.

  2. 25 year-old; no mule; farming for 9 years; married with young children.

  3. 47 year-old; owns mule; farming for 25 years; married with two teenage sons, ages 16 and 18.

  4. 40 year-old; owns mule; farming for 25 years; married with four children; recently yields have become highly variable.

Landlords

  1. 60 year-old; married with four sons, ages 20-40.

  2. 40 year-old; married with business and residence in town.

  3. 50 year-old; in the aftermath of Civil War when labor was in short supply.

  4. 30 year-old; married with young children; recently doubled the size of the plantation.

  5. 55 year-old; recently yields have become highly variable.

Was Sharecropping Inefficient?

Was Sharecropping Responsible for Low Standard of Living?