Agriculture Reference
In-Depth Information
soil degradation. The use of good husbandry clauses and the existence of implied covenants
indicates that some farming practices are similar from plot to plot in the area and that
some
types of “bad” farming are easily identified, and thus need not be specified in the contract.
In many regions, including those for which we have farmland contract data, farming is quite
homogeneous within a locale. In such cases the law implicitly adds detail to contracts that
appear to be simple.
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Although farmland contract disputes rarely end in court, there have been numerous cases
of farming disputes, especially during the first half of the twentieth century, that established
the meaning of good husbandry. These cases have involved such issues as overgrazing,
destruction of trees, permitting noxious weeds to grow, plowing meadowlands, removing
manure rather than spreading it, damage to buildings because of overloading storage areas
with crops, and extracting minerals from the soil.
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By now these practices are routinely
held by courts to constitute poor husbandry, thus violating the terms of the farmland lease
and allowing for very informal contracts, even when they are in writing.
3.4
Empirical Analysis: Variation in Contract Complexity
While it is true that, in general, farmland contracts are short and simple, they do vary: Some
are oral rather than written, some are annual rather than multiyear agreements. Our previous
discussion generates predictions about the determinants of oral versus written contracts and
the determinants of annual versus multiyear contracts. These predictions are:
PREDICTION 3.1a
The greater the specific assets, the less likely a contract is oral rather
than written.
PREDICTION 3.1b The greater the reputational capital (or the lower the cost of market
enforcement), the more likely a contract is oral rather than written.
PREDICTION 3.1c The greater the development of the common law, the more likely a
contract is oral rather than written.
PREDICTION 3.2a
The greater the specific assets, the less likely a contract is annual rather
than multiyear.
PREDICTION 3.2b The greater the reputational capital (or the lower the cost of market
enforcement), the more likely a contract is annual rather than multiyear.
PREDICTION 3.2c The greater the development of the common law, the more likely a
contract is annual rather than multiyear.
