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Livestock and land share contracts in a Hindu society
Article first published online: 27 JUN 2012
© 2012 International Association of Agricultural Economists
Volume 43, Issue 5, pages 593–606, September 2012
How to Cite
Aryal, J. P. and Holden, S. T. (2012), Livestock and land share contracts in a Hindu society. Agricultural Economics, 43: 593–606. doi: 10.1111/j.1574-0862.2012.00605.x
- Issue published online: 7 AUG 2012
- Article first published online: 27 JUN 2012
- Received 19 September 2010; received in revised form 22 December 2011; accepted 17 January 2012
- Livestock rental market;
- Land rental market;
- Share contracts;
- Asset poverty;
This article examines factors related to a livestock rental market in western Nepal and assesses whether this market is associated with caste differentiation and land rental market participation. Theoretical models for asset-rich (i.e., high-caste) households, rich in land and livestock, and asset-poor (i.e., low-caste families) households are presented to provide logical explanations for the existence of a livestock rental market and the synergy between livestock and land rental markets participation. A combination of double hurdle models and bivariate-ordered probit models were used to test the implications of the models. Consistent with the theoretical models, land- and livestock-rich high-caste households were more likely to rent out land and/or livestock, whereas land- and livestock-poor and credit constrained low-caste households were more likely to rent livestock and land from others. Participation in the two markets was positively correlated, indicating a synergistic relationship that may be due to production and transaction costs reducing benefits. Policies that can enhance the allocative efficiency of livestock and land rental markets can improve equity as well as efficiency of land use in Nepal. Provision of livestock credit to land-poor low-caste households is also crucially dependent on their access to more long-term contracts for land.