Agricultural Land Price and Agricultural Technological Progress

Abstract

This paper includes the concepts of land rent from the standpoint of modern economics and accounts for the contributing factors in the formation of the agricultural land price during the pre-war and the post-war periods. It can be said the agricultural land price in the later Taisho period was conditioned by farm rent and as far as the pure farming region is concerned, the agricultural land price in the post-war period is also explained considerably by net returns per 10 ares of land, which is capitalized by an 8 percent interest rate. Furthermore, the increase in agricultural land price, based on the premises of constant return to scale and the supported price of farm products, has demonstrated that the rise in the agricultural land price is sufficiently explained by technological progress in rice production. Though various factors are considered important in the contribution to the formation of the agricultural land price in this paper the main emphasis is based upon the fact that the interior factors of agriculture considerably elucidate its formation throughout the pre-war and the post-war period. This is especially applicable to the agricultural land price in pure farming regions. I. LAND RENT In agriculture, land is the most important production factor. There are different viewpoints among Marxian, classical, and modern economists. Among Marxian economics and classical economics, land rent is considered to be derived from surplus, whereas the generally accepted idea among modern economists is that it is determined by marginal productivity of land. However, modern economists do not necessarily have a unified viewpoint on land rent. It is true that certain famous modern economists maintain that the essence of land rent is surplus. For example, Marshall (1922) is one among them. According to his opinion that the essence of land rent was surplus and he introduced the concept of quasi-rent which could be extensively applied to fixed capital exclusive of land. Likewise, Robinson (1964) asserted that the essence of the concept of land rent was surplus. Consequently surplus had to exceed the minimum income which was necessary for the operation of production factors and was obtained by a particular part of the production factors. However, these two different views on land rent among modern economists do not necessarily differ from each other completely, since the marginal productivity of land and surplus will be, in essence, equal as long as land is looked