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Sharecropping is a system of agriculture or agricultural production in which a landowner allows a tenant to use the land in return for a share of the crop produced on the land (e.g., 50 percent of the crop). This should not be confused with a crop fixed rent contract, in which a landowner allows a tenant to use the land in return for a fixed amount of crop per unit of land (e.g., 1 ton per hectare). Sharecropping has a long history and there are a wide range of different situations and types of agreements that have encompassed the system. Some are governed by tradition, others by law. Legal contract systems such as the Italian mezzadria, the French métayage, and Spanish Mediero occur widely. Islamic law contains a traditional “musaqat” sharecropping agreement for the cultivation of orchards.

Overview

Sharecropping typically is a contract between land owner and a farm hand. The system succeeds when it has benefits and costs for both the owners and the croppers. It encourages the cropper to remain on the land throughout the harvest season to work their land, solving the harvest rush problem. At the same time, since the cropper pays in shares of his harvest, owners and croppers share the risk of harvests being large or small and prices being high or low. Because tenants benefit from larger harvests, they have an incentive to work harder and invest in better methods than in a slave plantation system. However, by dividing the working force into many individual workers, large farms no longer benefit from economies of scale. On the whole, sharecropping was not as economically efficient as the gang agriculture of slave plantations. The advantages of sharecropping in other situations include enabling access for women to arable land where ownership rights are vested only in men.

Sharecropping occurred extensively in colonial Africa, Scotland

, and Ireland

, and came into wide use in the Southern United States during the Reconstruction era (1865-1877). After the American Civil War many planters had ample land but little money for wages. At the same time most of the former slaves were uneducated and impoverished. The solution was the sharecropping system, which continued the workers in the routine of cotton cultivation under rigid supervision. Economic features of the system were gradually extended to poor white farmers.[53265] Use of the sharecropper system has also been identified in England

(as the practice of "farming to halves"). It is still used in many rural poor areas today, notably in Pakistan

and in India

.

Although there is a perception that sharecropping was exploitative,“Evidence from around the world suggests that sharecropping is often a way for differently endowed enterprises to pool resources to mutual benefit, overcoming credit restraints and helping to manage risk.”

It can have more than a passing similarity to serfdom or indenture, and it has therefore been seen as an issue of land reform in contexts such as the Mexican Revolution. However, Nyambara states that Eurocentric historiographical devices like ‘feudalism’ or ‘slavery’ often qualified by weak prefixes like ‘semi-’ or ‘quasi-’ are not helpful in understanding the antecedents and functions of sharecropping in Africa. [53266]

Sharecropping agreements can however be made fairly, as a form of tenant farming or sharefarming that has a variable rental payment, paid in arrears. There are three different types of contracts.

Workers can rent plots of land from the owner for a certain sum and keep the whole crop.
Workers work on the land and earn a fixed wage from the land owner but keep some of the crop.
No money changes hands but the worker and land owner each keep a share of the crop.

Regions

Africa

In settler colonies of colonial Africa, sharecropping was a feature of the agricultural life. White farmers, who owned most of the land, were frequently unable to work the whole of their farm for lack of capital. They therefore allowed black farmers to work the excess on a sharecropping basis. In South Africa the 1913 Natives' Land Act [53267]outlawed the ownership of land by blacks in areas designated for white ownership and effectively reduced the status of most sharecroppers to tenant farmers and then to farm laborers. In the 1960s, generous subsidies to white farmers meant that most farmers could afford to work their entire farms, and sharecropping faded out.

The arrangement has reappeared in other African countries in modern times, including Ghana

and Zimbabwe

United States

Although the sharecropping system was primarily a post Civil War development, it did exist in antebellum Mississippi, especially in the northeastern part of the state, an area with few slaves or plantations,[53268] and most probably also existed in Tennessee

. [53269]

After the Civil War planters had to borrow money to produce crops. Interest rates on these loans were around 15%. The indebtedness of cotton planters increased through the early 1940s, and the average plantation fell into bankruptcy about every twenty years. It is against this backdrop that owners maintained their concentrated ownership of the land.

In Reconstruction-era United States

, sharecropping was a solution for penniless freedmen to operate their own farms. It was a stage beyond simple hired labor, because the sharecropper had an annual contract. During Reconstruction, the Freedman's Bureau wrote and enforced the contracts.

Croppers were assigned a plot of land to work, and in exchange owed the owner a share of the crop at the end of the season, usually one-half. The owner provided the tools and farm animals. Farmers who owned their own mule and plow were at a higher stage and are called tenant farmers; they paid the landowner less, usually only a third of each crop. In both cases the farmer kept the produce of gardens.The sharecropper purchased seed, tools and fertilizer, as well as food and clothing, on credit from a local merchant, or sometimes from a plantation store. When the harvest came, the cropper would harvest the whole crop and sell it to the merchant who had extended credit. Purchases and the landowner's share were deducted and the cropper kept the difference—or added to his debt.

In the late 19th century sharecropping created a stable, low-cost work force that replaced slave labor; it was the bottom rung in the southern tenancy ladder. Sharecropping, along with tenant farming, was a dominant form in the cotton South from the 1870s to the 1950s, among both blacks and whites, but it has largely disappeared.

20th century

By the early 1930s there were 5.5 million white tenants, sharecroppers, and mixed cropping/laborers in the United States, and 3 million blacks. In Tennessee whites made up two thirds or more of the sharecroppers.[53270] In Mississippi, by 1900, 36% of all white farmers were tenants or sharecroppers, while 85 percent of black farmers were. [53271]Sharecropping continued to be a significant institution in Tennessee agriculture for more than sixty years after the Civil War, peaking in importance in the early 1930s, when sharecroppers operated approximately one-third of all farm units in the state. [53272]

The situation of landless farmers who challenged the system in the rural south as late as 1941 has been described thus: "he is at once a target subject of ridicule and vitriolic denunciation; he may even be waylaid by hooded or unhooded leaders of the community, some of whom may be public officials. If a white man persists in 'causing trouble', the night riders may pay him a visit, or the officials may haul him into court; if he is a Negro, a mob may hunt him down."

Sharecroppers formed unions in the 1930s, beginning in Tallapoosa County, Alabama in 1931, and Arkansas in 1934. Membership in the Southern Tenant Farmers Union included both blacks and poor whites. As leadership strengthened, meetings became more successful, and protest became more vigorous, landlords responded with a wave of terror.

Sharecroppers' strikes in Arkansas and the Bootheel of Missouri, the 1939 Missouri Sharecroppers' Strike, were documented in "Oh Freedom After While".

In the 1930s and 1940s increasing mechanization virtually brought the institution of sharecropping to an end in the United States. [53273][53274]

Sharecropping agreements

Typically, a sharecropping agreement would specify which party was expected to cover certain expenses, like seed, fertilizer, weed control, irrigation district assessments, and fuel. Sometimes the sharecropper covers those costs, but they expect a larger share of the crop in return. The agreement should also indicate whether the sharecropper would use his own equipment to raise the crops, or use the landlord's equipment. The agreement should also indicate whether the landlord will pick up his or her share of the crop in the field, or whether the sharecropper will deliver it (and where it will be delivered.)

For example, a landowner may have a sharecropper farming an irrigated hayfield. The sharecropper uses his own equipment, and covers all the costs of fuel and fertilizer. The landowner pays the irrigation district assessments and does the irrigating himself. The sharecropper cuts and bales the hay, and delivers one-third of the baled hay to the landlord's feedlot. The sharecropper might also leave the landlord's share of the baled hay in the field, where the landlord would fetch it when he wanted hay.

Another arrangement could have the sharecropper delivering the landlord's share of the product to market, in which case the landlord would get his share in the form of the sale proceeds. In that case, the agreement should indicate the timing of the delivery to market, which can have a significant effect on the ultimate price of some crops. The market timing decision should probably be decided shortly before harvest, so that the landlord has more complete information about the area's harvest, to determine whether the crop will earn more money immediately after harvest, or whether it should be stored until the price rises. Market timing can entail storage costs and losses to spoilage as well, for some crops.

Farmer's cooperatives

Cooperative farming exists in many forms throughout the United States, Canada

, and the rest of the world. Various arrangements can be made through collective bargaining or purchasing to get the best deals on seeds, supplies, and equipment. For example, members of a farmer's cooperative who cannot afford heavy equipment of their own can lease them for nominal fees from the cooperative. Farmers cooperatives can also allow groups of small farmers and dairymen to manage pricing and prevent undercutting by competitors.

Economic theories of share tenancy

The theory of share tenancy was long dominated by Alfred Marshall's famous footnote 5, wherein he illustrated the inefficiency of agricultural share-contracting. Steven N.S. Cheung (1969), challenged this view, showing that with sufficient competition and in the absence of transaction costs, share tenancy will be equivalent to competitive labor markets and therefore efficient. He also showed that in the presence of transaction costs, share-contracting may be preferred to either wage contracts or rent contracts—due to the mitigation of labor shirking and the provision of risk sharing. Stigitz (1974, 1988), suggested that if share tenancy is only a labor contract, then it is only pairwise-efficient and that land-to-the-tiller reform would improve social efficiency by removing the necessity for labor contracts in the first place. Reid (1973), Murrel (1983), Roumasset (1995) and Allen and Lueck (2004) provided transaction cost theories of share-contracting, wherein tenancy is more of a partnership than a labor contract and both landlord and tenant provide multiple inputs.

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