The effects of price support, acreage control, and technical progress on labor and land income in rice farming are analyzed and compared in this paper.
Agricultural wage rate, labor input, land rent, and supply elasticities of output price are derived by imposing fewer prior restrictions on the production function of the rice crop.
The influences of price support and acreage control policies on land rent are shown to be much greater than indicated by other studies which have been based on a much more restrictive assumption, namely, that the production function of the rice crop is represented by the Cobb-Douglas production function.
Acreage control reduces labor income and increases land rent. A reduction of 1% of the area planted with rice causes the agricultural wage rate to decrease by 0.2-1.1% and labor income to decrease by 1.1-1.6%. Conversely, land rent is increased by 0.5-2.2%.
Price support results in an increase in both labor income and land rent. An increase in the level of price support by 1% causes agricultural labor income to increase about 0.4-0.6% and land rent to increase about 5.1-5.7%. That is to say, the increase in land rent is greater than that of labor income.
As for technical progress, because of labor-saving biased technical change which occurred in the covered period, it caused the agricultural wage rate to decrease by 0.6-3.1% and labor input to decrease by 1.5-2.6%. Technical change caused labor income to decrease by about 3.2-4.6%. On the other hand, it caused land rent to increase by 7.6-12.6%.
The first purpose of this paper is to present a theoretical framework by introducing concepts of incentive compatibility and externality to analyze economic conditions for sustainable cropping systems in the vegetable and field crop-producing area.
The second purpose is to clarify managerial and local policy conditions which make it possible for farmers to maintain the sustainable land use by positive an analysis focused on the radish-producing area in Tokachi.
Main points mentioned in this paper are as follows :
1) Two types of the behavior are classified depending on how the cost of land use is to be borne by a producer. The first one is named rotation cropping behavior and the cost is internalized in this case. The other one is continuous cropping behavior and the cost is externalized. The former can maintain sustainable productivity although the latter cannot because the soil malfunction inevitably rises as a result of the externalized cost. With this framework, economic conditions of incentive compatibility for sustainable land use are presented and pointed out that the higher the cost, the more difficult to maintain the rotation cropping behavior.
2) To find out conditions for proper land use at the local policy level, the role and significance of the producers' agreement is evaluated. Consequently it is pointed out that the agreement functions as a symbol of common consciousness in the area, which is one of the important factors to prevent raising the cost.
3) The actual cropping system of radish-producing farms is evaluated. Then it is clarified what managerial conditions deter the desirable land use such as immature technical career and insufficient acreage to realize a proper crop rotation. These are the factors to deter farmers from implementing the rotation cropping behavior.