Summary statistics for individual contract data
Number of farms
Land in farms (acres)
Average farm size (acres)
Average value of land,
buildings, and equipment ($)
Average sales per farm ($)
Land owned by farmer (%)
Land leased by farmer (%)
Cash rent contracts (%)
Cropshare contracts (%)
Family farms (%)
Partnership farms (%)
Family corporations (%)
Nonfamily corporations (%)
Sources: Allen and Lueck (1992a; 1993b,c) and Johnson et al. (1988). British Columbia and Louisiana Farmland
Ownership and Leasing Survey (1993) and South Dakota and Nebraska Farmland Leasing Survey (1986).
Note: NA = not available.
Before we move on to the main analysis of the topic, a comment should be made regarding
endogeneity. Throughout the topic we assume that crop choices are restricted and treated as
exogenous to a contract. Although this simplifying assumption is never exactly true, it is a
close and useful approximation for several reasons. First, soil and climate largely determine
the choice of crop for the regions and crops we examine. This may not be true for areas such
as California's Central Valley, where a wide range of crops are grown in a small region,
but it is generally true in the regions we examine. For instance, in Louisiana, sugarcane
is confined to roughly ten southern parishes, all having a similar climate and soil type. In
British Columbia, commercial tree fruits are predominantly grown in the Okanagan region.
Second, in areas where crops are rotated, these rotations are virtually fixed. For example, in
the rice growing parishes of southwest Louisiana, rice and soybeans are switched every year.
Finally, as shown in chapter 3, farmer's crop choices are severely constrained by reputation
in the farmland lease market, so that farmers are not able to exploit a share contract by
choosing a crop with a highly uncertain yield, such as sugarcane in Nebraska.
As one can see from the tables in this chapter, farming is a vast and varied business, organized
in a myriad of ways. Over the past century farms have increased tremendously in physical