Rental Feudalism

Fiefs, tax lease, or economic hegermony are the basis upon which the upper class of landowners (landlords) bases its domination over the dependent farmers and landless. As the latter have no other alternative means of earning their livelihood, they have to accept high rents, forced labour, and in some cases even personal dependence in order to find a livelihood as tenant or labourer. Even if agrarian reforms and economic development have brought about some changes, this system still exists in many parts of Asia as well as in the Mediterranean countries and Latin America.

Essential for the formation of this agrarian system is the concentration of the ownership of land and water in the hands of a few landlords whose interest in the land, however, is limited.

They segment the land into very small parcels to be farmed by sharecroppers. The duration of the contract often lasts for only one vegetation period. They are, indeed, frequently prolonged by tacit agreement, but the insecurity leads to a state of dependence. The gross output is divided between the landlord and tenant in the case of sharecropping. The tenant must obey the landlord's orders on cultivation. Because of the small size of the plots they rent, the economic situation of the sharecroppers is critical and they frequently lose even more freedom to the landlords as a result of debts. The landlords try to gain higher incomes by means of high rents while investing little effort instead of trying to reach the tenants to crop more intensively. The land is a source of rent for them that at the same time gives them prestige and power since the tenants' dependent state covers even their personal living conditions and forces them to be loyal in all situations. The system takes from the poor and gives to the rich. Profit is derived by siphoning off as much as possible, not by increasing production.

The large landlords do not control the tenants personally, but rather leave the job up to overseers (formerly to sub-leasers as well) who increase the exploitation. Although restrictions limiting the anount of land that can be owned have been introduced through agrarian reforms in the post war period, they have often led to only a replacement of the large landlord by the petty landlord. Since the latter lives in the village, the control is even stricter. In areas in which the Green Revolution took place, the system has disintegrated because the landlords evicted the tenants and began to cultivate the land themselves. Under the new wage and earning ratios this proves to be more economical.