Inthisandthefollowingthreechapters,,asetofregulationsonagricultural,[1]Thiswasappliedtoallfarmrentals(fixedandsharerentsalike)able4,isandthenextchapter.
Thedifficultyofanalysisseemstostemfromtheproblemsof(1)identifyingvariouslegalconstraints,boththosethatarevaguelyimpliedandthoseexplicitlystatedinlaw;(2)specifyingtheoptionsofchoice;and(3),forexample,maygiverisetodifferentoutessimplybecausetheinterpretationsoflawdiffer,
Ibegintheanalysisbypres,whichincludepensatingp
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Anoffsettingcontractualrearrangementisdefinedasacontractualrevisionwhich,intheabsenceoftransactioncostsandrisks,producesnoeffactualrearrangementsbetweenthecontractingpartiestorestoretheequilibriumthathadbeenarrivedatbythemarkettermsofcontract,herentalsharerestriction.
Supposeanunrestrainedmarketrentalperc,theresultofthispercentagereductionisaredistributionofinefromthelandownertothetenant,,whatwillthecontractingpartiesdo?
CompensatingPayments
Asadevicetoattentuateprivatelandrights,therestrictiononrentalpercentagealoneaffectslittle,,thereareseveralrevisionsintheformofpaymentthatthelandownercouldusetoprotecthiswealthpositionwithoutviolatingtherestriction.(1)Thesimplestoftheseistocharg”key”,thelandownermayrequirethetenanttopayapresentlump-sumequaltothediscountedvalueofthereducedannualrentalineforthecontractedyears.(2)If,beforetherentalsharerestriction,partofthenonlandfarmingcosthadbeenbornebythelandowner,hemaysimplyrequirethetenanttopaythefullcost.(3)Ithadbeenapracticeinsomesharecontractsthatalandownerallowedthetenanttousepartofthelandtogrowsome”cereals”forthetenantspersonalconsumption,whichwerenotrequiredtobeshared;instead,,termsofthecontract,itisclearthatthelasttwomethodsbinedmaynotbesufficienttorestoretheinitialsituation.
TenureRearrangements
(1)Hemaysimplyrepossessthetenantsholdingandfarmthelandhimself,orhirelaborerstodothetilling.(2)Supposetheleasedurationcontract(3)Alternatively,thelandownermaysellhisholdingsoutrighttohistenants,atapriceperacreequaltothediscountedpresentvalueofrentperacrebeforethesharerestriction.(4)Ifatenantdoesnothavesufficientfundstopaythelandpriceimmediately,aninstallmentp,however,isaclearrestorationoftheinitialwealthconditiononlyifthepriceoflanddoesnotfall,thatis,ifthereisnospecializationinriskbearingormanagement,orifthereisnodeclineinspeculativedemandtoholdlandasaresultofthelandreform.