Sharecropping, Capital and Globalization

Globalization has done many wonderful things for the world. It has increased the wealth for multinational corporations and helped raise over 300 million Chinese out of poverty. At the same time it is also imperative to look at the other side of the issue: mainly, those not helped by globalization. One of those problems is an increase in Sharecropping around the world. Currently one of the largest places with sharecropping is Madagascar. In Madagascar sharecropping accounts for approximately one third of land use. But what is sharecropping exactly? Sharecropping is defined as “a land-rental contract matching a rich landlord and a poor tenant in which the landlord leases out her plot to the tenant in exchange for a share of the crop” (Bellemare).

Currently only 10% of landowners in Madagascar are women. In a society that has still been slow to increase the opportunities, women still do not have an equal economic chance. This is not to say, however, that sharecroppers are wealthy. In a study done by Bellemare the average landowner estimated that his time was worth $0.15 hourly, or about $1.20 per day. Obviously, the tenants who lease the land make far less than the owner. Most are illiterate and have not other job skills or opportunities.

But what does this have to do with globalization? Globalization is in a large part an economic occurrence. The growth of China, and almost all nations that have benefited from globalization, starts with capital. Only 40% of land owners stated that they had invested in infrastructure development. Assuming that deprecation occurs until the only remaining value is the fixed value we can assume that without any change in the system 60% of all owners will, in the long run, have property that is worth less than the original investment. According to the efficient market hypothesis property would not be sold for less than the fixed value, indicating that property purchased is either at or above the fixed value. Therefore, the best owners can hope for is that their original investment was at fixed value. Otherwise, they will be losing property value in the long run. A lack of infrastructure investment also proves that sharecropping is not profitable enough for owners. If it were then they would be reinvesting. Without an infusion of capital to provide for infrastructure development owners will continue with their current, unprofitable path because of a lack of other alternatives.

On the other side, however, there are the sharecroppers. These individuals are in an even worse position than the owners because they usually only have a small number of insignificant assets. Compare this to the owners who at least have the fixed value of the property. Sharecroppers are making less than $.15 an hour and have to deal with seasonal variations. Some academics state that land rights are necessary for the sharecroppers to rise out of poverty; but because the current owners of the lands are also unable to find a more profitable venue this suggest that land ownership is not the problem. It is the lack of capital for those who own the land. Without increased investment, only possible with capital, nothing will change and globalization will continue to pass by those in Madagascar.

Sharecropping also occurs commonly in Bangladesh, Eritrea, Ethiopia, India, Lesotho, Malaysia, the Philippines, and South Africa.