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An assignment for econ 491 students in autumn 2007, focusing on the potential effects and issues arising from the introduction of a 'use right' law in a state in india. The assignment requires students to analyze the welfare implications for various groups of people, paying special attention to the potential consequences for tenants, landlords, and the agricultural sector as a whole.
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Econ 491 Autumn 2007
A state in India have decided to introduce a “use right” law. According to the law all sharecroppers will have permanent use right on land they lease. The only way this right can be lost is if a sharecropper fails to paid the landlord at least 25 percent of the output as rent, leave the land uncultivated or if the landlord wants to cultivate the land himself.
Discuss the potential effects and issues that might arise from this policy. Pay special attention to the welfare effects for the different groups of people in the state who are affected either directly or indirectly.