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# Agricultural Cultivation at Farmer Expense

## Definition

A system where tenant farmers provide their own capital for cultivation while paying fixed rents to landlords, creating incentives for improvement and efficient management since farmers capture the returns on their investments.

## Source Chapter

Book III, Chapter 2

## Context

Smith presents this as the superior agricultural system, arguing that farmers with secure tenure and their own capital make better improvers than landlords because they have direct incentive to maximize returns, unlike proprietors who may prefer consumption over investment.

## Economic Domain

Production

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