Transformation of the Family under Rising Land Pressure: A Theoretical Essay

Abstract

In this paper, we argue that the same force that drives the individualisation of land tenure in rural areas also drives the individualisation of the family unit possessing and managing the land. This force is the growing scarcity of land that results from population growth and/or market integration. Individualisation at the farm-cum-family level occurs when either of the two following circumstances arise: (i) the head of a collective farm decides to grant individual plots to members of the household who are entitled to keep for themselves the entire proceeds therefrom while being simultaneously required to work on the collective, family fields; (ii) the head agrees to split the stem family farm, implying that some members leave with some portion of its land in order to form separate, autonomous branch households based on the nuclear family. Using a principal-agent framework to describe a patriarchal family, we show that as land scarcity increases, or as exit options available to members improve, the pure collective regime becomes inferior to alternative farm structures. We then explore, with the help of numerical simulations, the sequence in which optimal regimes succeed each other. The main result there is that as land scarcity increases, or exit options improve, splitting the main household appears to be the first alternative farm organization superseding the strictly collective farm. It is only at higher level of scarcity that the mixed farm structure becomes the optimal organization, from the patriarch’s standpoint.