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# Farm Rent

## Definition

A fixed annual payment made by a tenant or community for the right to collect and retain revenues from a particular territory or economic activity, rather than paying a percentage of actual collections. In medieval economic systems, farm rents were commonly used to grant towns the right to collect their own revenues in exchange for predictable payments to the crown or nobility.

## Source Chapter

Book III, Chapter 3

## Context

Smith explains how the practice of letting town revenues "in farm" transformed urban economic development. By granting towns the right to collect their own revenues through fixed farm rents, monarchs created incentives for urban economic growth while securing predictable income streams. This system allowed towns to develop their own economic regulations and governance structures.

## Economic Domain

Regulation

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