Historical Land Lease Values in England and India

Project Outline

The objective is to obtain the lease value for agricultural lands in England about 200 years ago and in India 100 years ago

Research Information

In England

Land Value Price per acre

George Buckland writing of the Kent chalklands in 1845 noted ‘rents for arable farms from 30 shillings to 45 shillings; and 2 shillings 6d to 4 shilling for marsh land per acre. The rent for pasture land are much higher.

Mavor on Berkshire in 1813 recorded as :

In 1796, average rent is about 20shillings an acre and 1804 the value is 25 shillings an acre. In 1813, the average rent is 21 shillings an acre. And in 1815 it fluctuate between 5 shillings and 50 shillings per acre.In 1811, the rent runs from 5s per acre, to 30s per acre.Closer to London the rents were higher by about 5 shillings an acre.

Current Knowledge of the course of rents in the nineteenth century, including all of the familiar features- the inflation of rents during the French wars, the effects of the post-war depression, recovery in rents up to the nineteenth century peak at the end of the 1870s, and finally the late nineteenth century depression.

Source:http://books.google.co.in/books?id=73Qi-jj8vDoC&pg=PA64&lpg=PA64&dq=land+values+of+agricultural+land+in+england+about+two+decades+ago&source=web&ots=bNmhBXIsn1&sig=9pq61Bq6Ak0pvE7Gxax4IKtoLps&hl=en

Lease Value in England

• The choice of sharecropping that has most fascinated agricultural economists. Its popularity appeared puzzling after many eighteenth and nineteenth century writers argued that this arrangement acted as a check on agrarian improvement because the farmer did not receive the full amount of any increase in farm output. More recently, however, the benefits of share tenancy have been recognised. For example, by dividing the crop, the sharecropping landlord shared the risks of a bad harvest with the tenant, thereby providing partial insurance to farmers who disliked being exposed to risk whilst still preserving some incentive for the occupier to undertake improvements.

Years	1880	1910	1930	1950	1980	1997
England and Wales	85	89	63	62	47	33

• In the Table, have enacted legal changes increasing rent controls and especially the security of leases. These restrictions have made tenancy more attractive for tenants but more importantly less so for landowners, which helps explain the post-war shrinkage of the tenancy sectors in England and Wales
• In England and Wales, higher taxation (including increased death duties) combined with the legacy of an agricultural depression and the deaths of many landlords or their heirs in World War One to produce a situation where numerous owners were forced to sell to tenant farmers who had profited during the wartime agricultural boom.

Full article is at:

http://eh.net/encyclopedia/article/stead.tenures.tithes.final

The Historical Role of the Lease

• A number of contemporaries and historians have suggested that the lease played an important role in influencing farming practices. Short leases, especially tenancies at will, were loudly criticized by the eighteenth-century English writers Arthur Young and William Marshall on the grounds that these contracts did not provide the tenant with sufficient security to make long-term investments to the farm, such as draining the land.
• Parliament passed a series of laws that permitted lands that had been held in common by tenant farmers to be enclosed into large, private farms worked by a much smaller labor force. While this drove peasants off the land, it also increased agricultural production and increased the urban population of England, since the only place displaced peasants had to go were the cities.
• In 1770 on the basis of the evidence Young gleaned from his Eastern Tour ,he suggested that the general average rent on 32 million acres of English and welsh agricultural land yielded a rental income of 20.8 million pound, or 13 shillings per acre.In the late 1760s he suggested an average regional rental of 10 shillings per acre in northern England, but 14 shillings for the eastern countries.By the 1790s his average estimate for england was 15s7d per acre.

Source:

http://books.google.co.in/books?id=73Qi-jj8vDoC&pg=PA64&lpg=PA64&dq=land+values+of+agricultural+land+in+england+about+two+decades+ago&source=web&ots=bNmhBXIsn1&sig=9pq61Bq6Ak0pvE7Gxax4IKtoLps&hl=en

Income of Agriculture land, 1500-1912

• Having constructed rent per acre of land from 1500 to 1912, wages, and a price index for agricultural output , estimate the total output of English agriculture over these years.
• Estimate two further things: the number of workers employed by period and the payments to capital. For the net output of the agricultural sector will equal in value the sum of the payments to labor, and land and capital owners.
• This measure of net output will have a number of advantages compared to attempts to estimate output by estimating crop yields.
• To estimate the number of workers employed we have information from the population censuses from 1801 onwards. The first good census in terms of occupations, that of 1851, shows 1.036 m. male farm workers (including farmers themselves) between the ages of 15 and 64, 24 percent of the occupied male population. Using census records of occupations for male workers, or earlier for families, suggests that the share of males employed in agriculture declined from about 37 percent circa 1801 to 10 percent circa 1911.
• For the earlier years I assume that the male farm labor force started as 60% of the population before 1680, fell linearly to 52% by 1750-9, and then fell linearly to 37% by 1801. Allen (2000) assumes a higher share of 74% of labor in agriculture in 1500.

Sources

• Over the course of the eighteenth and nineteenth centuries the British Parliament conducted a number of investigations of the activities of charities which documented the known history of the land they held, and its current rental value.
• This was followed by the mammoth Charity Commission or Brougham Commission of 1818-1837. This inquiry published 32 reports containing 26,987 pages, which give not just the current state of charity assets, but also often a history of how and when the land was acquired.
• The 28,880 endowments for charity reported on held 442,915 acres of land, early 2% of all farmland.
• There are 19,696 such linked observations drawn from 7,236 farms and plots of land, of which 7,733 observations are of plots or farms of 20 acres or more. The average plot size is 47.8 acres in this sample of linked observations.

• Average rents per acre for farmland in each county for the years 1820-24.
• From these estimated average rents, multiplied by the agricultural area of each county in 1888 we get an estimate of the total rental value of land in 1820-24 and of the national average rental and tithe value per acre.
• For England this is £1.30, and for Wales £0.78. The estimated average rental value per acre in 1820-24 can be compared to the assessed rental value of land estimated from the 1842 Property Tax returns, again using the 1888 agricultural returns to estimate the amount of farmland in each county.
• The agricultural area is estimated from the agricultural returns, which were completed by land occupiers listing the areas of each type of land use. These areas may understate the quantity of land in agricultural use.

• The agricultural area in 1888 includes land in woods and plantations, and in market gardens.
• The land tax collected outside major towns, where it would fall overwhelmingly on farm property,implies a rental value of £0.55 per acre in 1693, which is higher even than the charity based average rental of £0.45 in these years.

Full article is at:http://www.rirdc.gov.au/reports/Ras/03-080.pdf

In India

Similarly, in parts of India, social sanctions prevented kept members of lower castes from owning or renting land, and they ended up working for higher caste land owners as farm laborers. Land reform in India created further incentives to hire labor, for land cultivated by labor was usually exempt from laws that transferred agricultural property to tenants and did not fully compensate landlords.

Full article is at :

http://www.hss.caltech.edu/~pth/Papers/propertyrights3.rtf.doc

Land Value Price per Acre

Source:

http://books.google.co.in/books?id=jIbRhV00p6AC&pg=PA264&lpg=PA264&dq=table+of+price+per+acre(land)+in+india+in+20th+century&source=web&ots=5HHfznmBSC&sig=YxUJyXKCLVk2i8YzFU6_I_R7Uf0&hl=en

Income of Agriculture Land

Three broad types of land revenue system were introduced to India under British rule (Baden-Powell 1892). The differences between these systems account for significant variations in the subsequent evolution of land rent systems throughout rural India.

I.Zamindari

• This system prevailed over most of North India, including present-day Uttar Pradesh (except Avadh and Agra), Bihar, West Bengal, most of Orissa, and Rajasthan (except Jaipur and Jodhpur), and covered around 57 per cent of the total area cultivated.

II.Ryotwari

• The other major system was the ryotwari system, introduced in Madras in 1792 and in Bombay in 1817-18. The ryotwari system held sway over most of South India, including present-day Maharashtra, Karnataka, Tamil Nadu, Kerala, Andhra Pradesh, and most of Madhya Pradesh and Assam. Pockets of zamindari-type tenure existed within these ryotwari areas, particularly where administered by local rajas or nawabs. Ryotwari systems accounted for around 38 per cent of the total cultivated area.

III.Mahalwari

• The mahalwari system was introduced between 1820 and 1840 to Punjab.This type of tenure system was much less extensive, and accounted for some 5 per cent of the cultivated area.

• Reassessments made in 1860 in Bombay and 1855 in Madras (which continued until 1937) led to even higher land revenues, resulting in famine and prompting agrarian revolts . The Royal Commission on Agriculture, 1924-25, reported that in Bombay, 86 per cent of the cultivated area was held by 12 per cent of the cultivators. In Punjab by 1939, 2 per cent of land owners held 38 per cent of cultivated land.

Source:

http://www.worldbank.org/html/dec/Publications/Workpapers/wps2000series/wps2123/wps2123.pdf

• Generally speaking, in the 20th century more than 30% of agricultural land has been leased. Since 1940 that has increased, reaching 44% of farms and 41% of farmland acres in 1988. Officially, tenancy is a form of leasing. A tenant is someone who operates only land that is leased. That is a Census Bureau differentiation and is critically important if one is using Census data for any research. Including all renters or lessees in the same category as tenants would be misleading, since many renters also operate farms on land they own. That is especially important when we take into account the connotations associated with those two terms.
• Tenancy seems to suggest some significant difference in power relations and control of land, whereas the term leasing seems to suggest a peer business relationship. If all lessees are called tenants, then the conditions of landownership appear quite different from their reality. Leasing is currently seen as one of many strategies used by successful commercial farmers to manage risk.
• Especially during the days of the farm crisis, with inflated and then deflated farmland values, leasing rather than buying land seemed to make sense. Leasing farmland is not necessarily an indication of lesser status. Tenancy may also not be an indication of lesser status, since a tenant could actually own land that is leased to another person, but because he/she operates only on rented land the Census defines that farmer as a tenant.

Full article is at:

http://www.h-net.org/~rural/threads/discfarmown.html

Lease Value of Agriculture Land

Broadly speaking, three major types of land reform legislation were enacted in most Indian states in the decades after Independence: the abolition of intermediary tenures, the redistribution of land via land ceilings; and the regulation of tenancy.[19] The tenancy reforms were justified on grounds of equity and efficiency and aimed to transfer land to the tiller (often including a ban on landlord-tenant relations) and to increase tenants' tenure security.

Land is largely a state subject in India, so the extent and nature of tenancy regulation and restriction varies from state to state. The states, however, do fall into four general categories:

• Virtual ban on all agricultural tenancies: Kerala, Jammu and Kashmir.

• General prohibition on agricultural tenancies, but exempt certain categories of persons such as widows, minors, marginal holders and/or members of the armed forces: Karnataka, Himachal Pradesh, Madhya Pradesh, Uttar Pradesh, Orissa, and Telangana area of Andhra Pradesh.

• No explicit prohibition on tenancy, but discourage tenancies by empowering tenants with protected rights on the tenanted land, either as perpetual tenants or through rights to purchase within a specific period: West Bengal, Punjab, Haryana, Gujarat, Maharashtra, Bihar, and Assam.

• Few restrictions on tenancies, although establishment of minimum lengths of tenancies and/or maximum rent levels: Rajasthan, Tamil Nadu, and non-Telengana areas of Andhra Pradesh.

	Percentage of owner -Operators	Percentage of Total Leased-In Area	Percentage of Total Operated Area Owned
Marginal (< 1 ha)	69%	16%	17%
Small (1-2 ha)	22%	19%	34%
Medium (2-4 ha)	5%	22%	18%
Large (> 4 ha)	4%	43%	32%

• According to NSS data, marginal farmers (those owning < 1 ha) lease-in 16 percent of the total leased-in area, despite comprising about 69 percent of all farm households. Their portion of leased-in land, however, is roughly equivalent to their portion of owned land. On the other extreme, large farmers (those owning > 4 ha) have a much larger share of leased-in area (43 percent) compared to their portion of owned area (32 percent). Table shows the portion of households, leased-in area, and owned area for different sized farm households.

Source:

http://www.fao.org/docrep/007/j2602e/j2602e03.htm

Land Leasing Activities

These group leasing activities took place in the Telengana area of Andhra Pradesh, where the law allows only small farmers to rent-out and where the tenancies must be for a minimum of five years with rent set at a maximum ranging from three to five times the land revenue. All of the Deccan Development Society programme lease agreements have been oral, with terms of one to five years, and lease rates ranging from about Rs 1,000 to 4,000 per acre, well above the legal maximum. Neither the landowners nor the peasants perceive the extra-legal nature of the agreements as presenting a significant risk.

Full article is at:

http://www.fao.org/docrep/007/j2602e/j2602e03.htm