1 Department of Management Engineering, Technical University of Denmark2 Systems Analysis, Department of Management Engineering, Technical University of Denmark3 DTU Climate Centre, Systems Analysis, Department of Management Engineering, Technical University of Denmark
In recent years, a global increase in demand for agricultural commodities and land has contributed to increasing agricultural prices. This trend can be expected to continue in the future, and may result in significantly higher land rents. This paper investigates the potential distributional effects of increasing land rents in land-abundant developing countries from a theoretical viewpoint, and provides historical case examples to support the theoretical propositions. It is proposed that the specific characteristics of a rent-generating natural resource have implications for the concentration of economic and political power and hence the distribution of rents. Specifically, when it comes to agricultural land, the characteristics of land imply that the organizational capacity of farmers is a crucial determinant of the distribution of agricultural rents. The historical case examples indicate that the extent of organizational capacity may be determined by land inequality, the heterogeneity of farmers and the political environment.
Journal of Reviews on Global Economics, 2013, Vol 2, p. 375-389