monopoly rent- a special form of land rent, formed when certain types of agricultural products are sold at a monopoly price that exceeds their value.
Monopoly rent is a special form of capitalist land rent, part of the surplus value created by wage labor, appropriated by land owners. It is formed when goods are sold at a monopoly price that exceeds their cost.
Exists in agriculture, in the extractive industry and on urban land. In agriculture, monopoly rent appears on plots of land with exceptional properties that allow the production of rare crops or special varieties of products, the demand for which is much higher than their production capacity.
For example, the production of special grape varieties to produce rare wines. In the extractive industry, monopoly rent is formed in those areas where rare metals, minerals or other minerals are mined, the demand for which on the market significantly exceeds the possibility of their extraction, as a result of which the market prices for them are steadily above their value. In all these cases, the capitalist renting the land is compelled to pay the owner an extraordinarily high rent, which, in addition to absolute rent and differential rent (see Differential rent under capitalism), also includes monopoly rent.
With development major cities monopoly rent arises and begins to grow in urban areas, which have an exclusive position in terms of the construction of industrial and commercial centers, large commercial buildings and tenement houses. In this case, it takes the form of excessively high rents or very high rents. Changing demand for rare products, the depletion of mineral resources, the impact of the scientific and technological revolution lead to the fact that certain areas lose their exclusivity, while others acquire it. This leads to the destruction of monopoly rent in some areas and its appearance in others. In general, with the growing scarcity of rare plots, there is a tendency towards an increase in monopoly rent.
Absolute ground rent- one of the types of income from land ownership, payment to the owner for permission to apply capital to the land; is paid by the tenant from absolutely all plots of land, regardless of fertility (hence the name of this type of rent).
Absolute rent is brought to the farmers by everything land for rent. The reason for the existence of absolute land rent is the monopoly of private ownership of land, and the condition for its formation is the lower organic composition of capital in agriculture than in industry. Therefore, there is a surplus of surplus value above the average profit. Absolute rent is a part of the surplus value appropriated by farmers by virtue of private ownership of land. Large-scale private ownership of land hinders the transfer of capital from industry to agriculture, hinders intersectoral competition and the equalization of the rate of profit of agricultural capital with the general rate of profit. Therefore, agricultural products are sold at a value that is higher than the social price of production, since the excess of surplus-value over average profit is retained in agriculture. The difference between the cost and price of agricultural production, i.e. the surplus profit the capitalist-entrepreneurs give in the form of absolute rent to the owners of the land as payment for the use of the land.
The source of absolute rent is the surplus labor of hired agricultural workers. Absolute land rent is received by the owners of all land plots leased out.
In conditions of limited lands, not only the best, but also the worst lands are included in the turnover. At the same time, the owners collect rent for all kinds of land, including the worst ones. As a result, land rent arises on the worst lands, which appears in the form of absolute rent.
The mechanism for the formation of absolute rent is ensured by the fact that the social costs of production in agriculture are the costs of production on the worst lands, and the products are sold at social prices. The difference between them allows you to receive additional profit in the form of absolute rent:
T \u003d C + V + Rav + Rdop,
where T is the cost of production Agriculture produced on the worst lands; C + V - the cost of the farmer's capital, respectively, for the means of production (C) and for wages hired workers (V); Рср - the average profit that the farmer receives; Рdop - additional profit received by the owner of the land in the form of absolute rent.
In our country, until recently, based on the accepted methodology for substantiating the emergence of rent, there was no absolute rent (due to the absence of private ownership of land). Currently, private ownership of land is being reintroduced. Under these conditions, it is necessary to clarify the nature of the emergence of absolute rent.
Recall that absolute rent implies the existence of private ownership of land, which can be used in two ways:
a) with the right to lease the land;
b) without the right to lease the land.
In the first approach, the owner leases the land and receives a certain income, which acts as an absolute rent. In this case, the owner of the land may not participate in agricultural production, but live on income from the lease of land. It is no coincidence that N. G. Chernyshevsky called absolute rent “idle rent”.
In the second approach, the owner does not have the right to lease the land. In this case, land is excluded from free trade; consequently, the possibility of the emergence of a monopoly of large landownership is also excluded. With this form of agrarian relations, the existence of absolute rent becomes impossible.
Special mention should be made of the state form of land ownership. Until recently, it was believed that the state form of ownership excludes the possibility of absolute rent. However, in market conditions regions are increasingly endowed with the rights of business entities; principles of organization local government carried out on the basis of economic and financial independence; the responsibility of the regions for ensuring the vital activity of the territories under their jurisdiction is being strengthened. Under these conditions, it is quite legitimate for the regions as economic entities and as land owners to raise the issue of leasing land (especially in cities and urban-type settlements) and receiving income in the form of absolute or differential rent with its use for local needs. This approach is consistent with the notion that the appropriation of rent is economic form sale of land property.
Differential rent - additional income obtained through the use of greater land fertility and higher labor productivity. Differential rent exists in two forms: differential rent I and differential rent II. The sources of differential rent I are more productive labor on relatively better and average fertility lands, as well as differences in the location of plots of land in relation to sales markets, transport routes, etc. Differential rent II is associated with additional investments of capital in the same area, providing additional profit. Differential rent arose as a result of the limited nature of land: the price of production of an agricultural product is determined by the conditions of production not on average and the best plots, but for the worst ones, because the product of only the best and average plots is insufficient to cover public demand. As a result, an additional surplus value is formed, which is the difference between the price of production in the worst areas (the social price of production) and the individual price of production in the middle and best areas.
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In the economic literature, there are two main approaches to the definition of land rent: Marxist and neoclassical.
Marxist concept of land rent. In the very general view in our economic literature the following definition of rent is given: rent - not connected with entrepreneurial activity a type of income regularly received from capital, land or property.
Land rent is a part of the surplus product created by direct producers in agriculture and appropriated by the land owner or land user.
The initial condition for the formation of land rent is the lease of land.
Land lease is a type of land use in which the owner transfers his land plot for a certain period to another person (tenant) for farming for a certain rent. The process of formation of land rent is based on the fact that three factors interact in agriculture. social groups:
♦ landowners (landowners);
♦ capitalist entrepreneurs (tenants);
♦ hired agricultural workers.
Land owners lease land, thus exercising their ownership of the land and thereby receiving from the tenant a certain part of the value of the products produced on this land. The income received by the landowner is in the form of land rent.
Capitalist-entrepreneurs, renting land, organize agricultural production or mining on it in order to make a profit. Land in this case acts as the main means of production, as a special sphere of capital investment.
By creating the value of a commodity by their labor, agricultural wage laborers receive wages; at the same time they produce surplus value, a certain part of which is appropriated by the owner of the land in the form of ground rent.
An important condition for the emergence of land rent are two types of land monopoly:
♦ land ownership monopoly, when the landowner is a private owner, cooperative, state; this kind of monopoly generates absolute rent;
♦ monopoly of management (monopoly on land as an object of management on land), when an entrepreneur leases land and monopoly manages it; this kind of monopoly generates differential rent.
Absolute rent. In conditions of limited lands, not only the best, but also the worst lands are included in the turnover. At the same time, the owners collect rent for all kinds of land, including the worst ones. As a result, land rent arises on the worst lands, which appears in the form of absolute rent.
The mechanism for the formation of absolute rent is ensured by the fact that the social costs of production in agriculture are the costs of production on the worst lands, and the products are sold at social prices. The difference between them allows you to receive additional profit in the form of absolute rent:
T \u003d C + V + P + R d,
where T is the cost of agricultural products produced on the worst lands; C + V - the cost of the farmer's capital, respectively, for the means of production (C) and for the wages of hired workers (V); P cf - the average profit that the farmer receives; Р additional - additional profit received by the owner of the land in the form of absolute rent.
In our country, until recently, based on the accepted methodology for substantiating the emergence of rent, there was no absolute rent (due to the absence of private ownership of land). Currently, private ownership of land is being reintroduced. Under these conditions, it is necessary to clarify the nature of the emergence of absolute rent.
Recall that absolute rent implies the existence of private ownership of land, which can be used in two ways:
a) with the right to lease the land;
b) without the right to lease the land.
In the first approach, the owner leases the land and receives a certain income, which acts as an absolute rent. In this case, the owner of the land may not participate in agricultural production, but live on income from the lease of land. It is no coincidence that N. G. Chernyshevsky called absolute rent “idle rent”.
In the second approach, the owner does not have the right to lease the land. In this case, land is excluded from free trade; consequently, the possibility of the emergence of a monopoly of large landownership is also excluded. With this form of agrarian relations, the existence of absolute rent becomes impossible.
Special mention should be made of the state form of land ownership. Until recently, it was believed that the state form of ownership excludes the possibility of absolute rent. However, in market conditions, regions are increasingly endowed with the rights of business entities; the principles of organization of local self-government, carried out on the basis of economic and financial independence, are being introduced; the responsibility of the regions for ensuring the vital activity of the territories under their jurisdiction is being strengthened. Under these conditions, it is quite legitimate for the regions as economic entities and as land owners to raise the issue of leasing land (especially in cities and urban-type settlements) and receiving income in the form of absolute or differential rent with its use for local needs. This approach is consistent with the position that the appropriation of rent is an economic form of realization of landed property.
Differential rent. The existence of this type of rent is due to the fact that the land is heterogeneous, firstly, in its natural and artificial fertility, and secondly, in location.
Due to limited land, the social price of agricultural products is formed according to the worst plots. Production is organized both on the best and average, and on the worst lands. As a result, labor expended on the production and delivery of agricultural products has different productivity, and products have different individual values. On the best lands in terms of fertility and location, the cost of production is lower. In such farms, additional net income is created and realized. Quantitatively, it is equal to the difference between individual and average social value. The additional net income takes the form of differential rent.
Differential rent comes in two forms:
a) differential rent I;
b) differential rent II.
The material content of differential rent I is an additional net income of the first kind, which appears as a result of different productivity of the same labor costs on land plots equal in size, but different in fertility and location. Since the size of the differential rent I does not depend on the activities of the tenant, it is received by the landowner.
The material content of differential rent II is the additional net income, which appears as a result of the increasing productivity of successive expenditures of labor and capital on the same plot of land. The result of differential rent II is an increase in the intensity of farming (Table 13.1).
Neoclassical concept of land rent. Modern foreign researchers use a different conceptual approach based on the use of the neoclassical direction. Representatives of the neoclassical school as general position to explain the rent use the theory of marginal
Table 13.1
Features of obtaining differential rent I and II
| Features of receiving rent | Differential rent I | Differential rent II |
| Sources of receipt | Fertility and location of soils | Intensity of farming |
| Conditions of occurrence | Different productivity of equal capital expenditures on land of different quality | Different productivity of successive investments of capital in the same area |
| Farming form | extensive | intensive |
| Place of education | Best and average land plots | Formed on the worst lands |
| Subjects of appropriation | Land owners | Tenant undertakings Temporary assignment |
products. For a more detailed study of the processes of formation of land rent, we single out the most important basic provisions and analyze them taking into account different approaches to research.
1. Initial bases for determining land rent.
2. Types of land rent.
1. Initial bases for determining land rent. The basis for determining rent is the supply and demand for land and the search for an equilibrium price. Consider the process of determining rent using the graph shown in fig. 13.1.
The starting point is the provision that the supply of land on the market is a fixed value due to their limitedness. As a result, on the chart of rent formation, the supply curve SS takes the form of a vertical straight line.
Rice. 13.1. Schedule for determining land rent
The intersection of the supply curve SS and the demand curve DD at point E corresponds to the amount of rent.
If the rent is above the equilibrium point E, then the demand for land will decrease, part of the land will be unoccupied.
As a result, landowners will be forced to offer land at a lower price. If the rent falls below the equilibrium point E, then the increased demand will cause the rent to rise. The supply and demand for land will reach a mutual correspondence at the equilibrium point E.
Based on the operation of the law of value, the Marxist theory of the origin of rent and the theory of rent formation used in modern foreign literature, based on the application of the process of movement of supply and demand, do not contradict each other. Marxist theory does not deny the market methods of supply and demand for land in the formation of prices. In foreign theories of determining the size of rent, the quantity of production removed from a given plot of land and the average total costs are taken as a basis. The amount of rent is determined by the difference between production costs and rental rates in the land market.
2. Types of land rent. Economic rent is any income attributed to production costs that exceeds its opportunity cost.
Net economic rent is income received through some productive factor, the supply of which is characterized by perfect inelasticity (land, land). The area of land is limited, so the supply of land is perfectly inelastic. The definition of "pure" means that, in the aggregate of factors, the process in question has no opportunity cost and any income generated by it is economic rent.
In addition to those mentioned, there are other types of rents.
Quasi-rent - additional income that the owner of a factor of production receives for a certain (short) period of time. It is formed as the difference between the return on invested capital and the costs of maintaining and reimbursing investments in fixed capital, irreplaceable in the short period.
Monopoly rent - based on the monopoly price of products of rare quality (durum wheat for obtaining flour with special baking qualities; special grape varieties for making world famous wines).
Ecological rent - its prerequisite is the quality of the natural environment; the level of environmental pollution, the development of the natural environment of human life.
In foreign literature, the concept of differential rent is used without dividing it into I and II. Differential rent is interpreted as income received through the use of resources of higher orders in a situation where resources are ranked according to their productivity. Differential rent is formed by using equal in size, but different in fertility, climatic conditions, the location of plots of land (as in the Marxist concept).
Farms operating on the best and average land are in an advantageous position compared to farms located on the worst plots, since their costs are lower. This gives them the opportunity to receive additional income, called differential rent I. The most typical reasons for the formation of differential rent I are the advantages that the land has in terms of fertility or location.
The mechanism of formation of differential rent I is shown in more detail in fig. 1.
Let there be a demand for some type of agricultural product, characterized by the curve D, and an industry-wide supply, expressed by the curve S. As always, the market equilibrium will be established at the point of intersection of the curves O. For agricultural producers, which are small firms, this will set the price level at which their products will be bought. So, in the first approximation, events will develop, as in the market of perfect competition. Intersection of marginal cost curves with curves marginal revenues(MC=MR=D) will set for each of the firms the optimal size of production Qi.
Here, however, the resemblance to perfect competition in non-agricultural industries breaks off. Lands are the best and the worst in quality. And if economic profits are obtained on the best section No. 1, then on the worst section No. 2 only break-even production is ensured.
By the way, the worst section No. 2 is usually called the marginal one, since it is the last type of sites on which, given the ratio of supply and demand, production is still possible. All lands that are worse than it in quality will definitely be taken out of production in the long term, since the selling price of products on them will not cover the costs.
Economic profits in the first section will be long-term. In other industries, as you know, with perfect competition, this does not happen. The presence of economic profit (if it develops for a while) attracts new producers to the industry. Supply rises, the S curve shifts to the left, prices fall, and profits disappear.
All this does not happen in agriculture. After all, economic profits on the best plots are due to a natural cause - more high quality earth. It is impossible to transfer all production only to the best sites: in contrast to industrial enterprises they do not "reproduce", there are exactly as many of them as nature created. The economic profit obtained on all plots that exceed the marginal quality of land is called differential rent.
Differential rent I is formed not only in agriculture, but wherever in the production process the natural properties of the land and other natural resources are used, which differ in their quality characteristics. For example, this happens in mining and construction, energy and fisheries. Thus, unlike manufacturing firms, individual mines, shafts, etc. have consistently lower costs compared to other companies in their industry. This advantage (and the resulting economic profits) is due to natural causes: the conditions of occurrence of minerals and the wealth of deposits.
Of no small importance is the location of mines, wells and mines. Location has a particularly large influence on rent in construction. For example, apartments in the city center are more expensive, and accordingly, differential rent is formed on the land allocated here for development.
BASIC forms of land rent
(resource fees)
1. Absolute rent
2. Differential rent I
3. Differential rent II
Differential rent I ,II
In a narrow sense: Actually land. conditions;
Renewable - (eg: restoration of fertility through human effort)
In lat. sense: all uses In the produced process, natural resources (= useful minerals)
Non-renewable - impossible to restore (the problem of rarity is most relevant for this resource)
Peculiarities:
1) supply is absolutely inelastic;
2) splitting of property rights (the owner and proi-l can be different persons)
3) aggregate demand for land (in the narrow sense - the demand for s\x + demand not s\x)
4) the price level depends on the demand for land
Differential rent I- eco. profit received on all plots in terms of the natural quality of the land, exceeding the marginal ones (worst plots, where econom. Profit = 0)
ü the main reasons for education are the advantages that a land plot has in terms of fertility (natural location)
ü eq.. Profits are durable. character, which is due to natural. reasons (better land quality)
EXAMPLES:where they get DR1:fertile lands, rich deposits, apartments in the center
Differential rent II- eq. the profit received on all sites on economy. Land quality X and (=economical fertility) with capital investment there.
ü mechanism for making a profit - effective management of the household, improvement of property in the land
EXAMPLES: both in agriculture and in other sectors of the economy, the injection of special solutions may exceed the return of oil products.-layers)
Absolute rent- arises due to the ownership of land and the absolute inelasticity of the supply of land and has the form land tax
mechanism of occurrence: market economy there is no "no one's" land, so even the worst plot will not be rented out to the renter for free
ü For the marginal (worst plots) - this is the only type of rent (income)
EXAMPLES: by analogy with the price (rent) for renting apartments (absolute rent - the fact of the apartment itself, DR1 - location, floor, proximity to the metro
DR2-repair, furnishing
WHO Receives Differential Rent?
1) DR1-received by the landowner
2) DR2-received by the tenant minus income tax, next, but he is interested in investments and in a long lease)
3) ABSOLUTE rent - the landowner receives in the form of rent.
Rent and rent are two different things!
1st.arndn. fee and absolute Rent and DR1 (i.e. the main one is rent a)
2nd rent may include payments and non-rental origin, eg plot land is often rented out together with buildings (i.e. the “capital” factor is also transferred for use)
Capital market and interest.
Capital is one of the basic elements of social wealth.
Capital in the broad sense of the word is any resource created for the purpose of producing more economic goods.
Obtaining a certain flow of goods and services in the future presupposes the presence in the production process of a certain stock of durable resources, i.e. capital.
Capital differs from land in that it has the ability to reproduce, while the land fund is a fixed amount and cannot be quickly increased.
Feature: in the short term, capital is understood as money for which physical factors of production are acquired.
Investment = investment = investment resources - insubstantial. capital invested in production.
Capital:
· Physical (technical). The collection of mothers. funds, cat. ispolz.v various sf-x proi-va. (material) (machines, buildings, structures, raw materials, etc.)
· Financial (cash). Owl-st Money V securities in the definition prices.
· Yuridich . Const-st of the rights of disposal of certain values.
· Human. investments that increased. physical and wit. human abilities. (general and special knowledge, work skills, production experience, etc.). Human capital- a special kind of labor resources.
Therefore, capital in the proper sense of the word usually means only physical, material factors.
Capital is a moving value, which in its movement goes through a circuit (the successive passage of capital through three stages and three functional forms) and a turnover (this is a circuit, considered not as a separate act, but as a periodically repeating process).
Indicators of the efficiency of capital use are: turnover rate, capital productivity, material intensity, turnover ratio, payback period.
Physical capital - is divided into fixed capital, which includes real durable assets, such as buildings, structures, machinery, equipment, and working capital spent on the purchase of funds for each production cycle: raw materials, basic and auxiliary labor materials.
Fixed capital serves for several years and is subject to replacement (reimbursement) only as it becomes physically or obsolete (the latter means the depreciation of fixed capital as its productivity becomes cheaper or with the start of production of machines and equipment of a fundamentally new quality, which makes the use of old fixed capital technically and economically unprofitable). Each year, the owner of fixed capital writes off a certain part of the cost of his equipment (carries out depreciation).
Working capital is completely consumed during one production cycle, and its value is included in the cost of production as a whole, in contrast to fixed capital, the value of which is taken into account in costs in parts.
The value of capital today depends on what capital can produce in the future. In order to generate income, the owner of capital must give up current consumption in the hope of receiving higher rewards in the future. The stream of future income should stimulate the creation of today's stock. To create this stock you need a stream of savings. The time factor (comparison of the past with the present, the present with the future) acquires paramount importance in the analysis of capital.
The return on capital will only be produced if the owner of the capital transfers it for productive use to the entrepreneur (or becomes an entrepreneur himself).
Percent. The owners of money capital, renouncing current consumption, provide it for productive use. But the money capital lent for a certain time returns with a certain increment - interest.
Interest is the price of capital, namely that part of the income that the owner of capital receives during the year. If it is expressed as a percentage, then such income is called the interest rate.
Money in itself is not a resource, since banknotes and coins as such are not suitable for the production of any goods and services. Entrepreneurs acquire the "purchasing power" of money, i.e. the ability to use money to buy the required capital resources. Hence, by borrowing money at interest, firms actually gain the ability to use the productive capacity of real capital.
Interest is the price paid to the owner of capital for the use of his funds during certain period time.
The interest rate is set over the effect of supply and demand on money market. The demand for borrowed funds depends mainly on the expected return on investment. The supply is determined mainly by the amount of savings.
Distinguish between nominal and real interest rates.
The nominal rate is the rate at which the borrower returns the amount received to the lender, adjusted for inflation. The real rate is the inflation-adjusted interest rate, net of the inflationary component.
There are three approaches to understanding the essence and source (causes) of the formation of interest: Marxist, in the framework of the theory of pure productivity, and psychological approach in the theory of marginal utility.
From the standpoint of the theory of supply and demand, the percentage value is defined as a kind of equilibrium price. There are average and market, nominal and real interest rates. The capital market is often referred to as the investment market.
Investments by various economic schools are characterized differently. In Russian practice, investments are all types of assets invested in economic activity for the purpose of generating income (financial definition), or all expenses for the creation, expansion and technical re-equipment of fixed capital, as well as for changes in working capital associated with this ( economic definition). Distinguish between gross and net investments, tangible, financial (portfolio), intangible; public and private; reliable and risky; long term and short term.
When investing, it is necessary to compare costs and incomes that arise at different times. For this, discounting is used - a process that is reverse to accrual. compound interest. Invest only when expected returns are higher than
| Features of receiving rent | Differential rent I | Differential rent II |
| Sources of receipt | Fertility and location of soils | Intensity of farming |
| Conditions of occurrence | Different productivity of equal capital expenditures on land of different quality | Different productivity of successive investments of capital in the same area |
| Farming form | extensive | intensive |
| Place of education | Best and average land plots | Formed on the worst lands |
| Subjects of appropriation | Land owners | Tenant undertakings Temporary assignment |
Differential rent is formed not only in agriculture, but also in mining and construction. In the extractive industry, as in land ownership, it is generated by differences in the level of labor productivity and the magnitude of the value of the product. These differences are due to the unequal wealth of mineral deposits, the inequality of other natural conditions in mines, mines, oil wells, etc. differential income, which is appropriated by the owner of the land in the form of differential rent. Land owners also receive differential rent for plots of land on which buildings and structures are built. Its value largely depends on the location of the facility under construction.
When considering differential rent, it turned out that it does not form on the worst lands. However, the landowner also leases these lands, for he receives for this absolute rent.
Absolute P. (absolute rent) - a type of rent associated with a monopoly of ownership of this species resource.
The reason for its formation is the second type of monopoly in agriculture - monopoly private property to the ground. It hinders the free application of capital to land, its transfusion in the course of intersectoral competition, which establishes an average profit. Historically, agriculture has often had a higher share of labor compared to the share of capital goods than industry. Therefore, in agriculture, more surplus value is created per unit of capital, and the value of agricultural products is greater than the social price of their production. The difference between the value of agricultural produce and the social price of its production on inferior lands forms the surplus profit which the landowner appropriates in the form of absolute rent. It raises the market prices of agricultural commodities, landowners impose on society a kind of tribute in the form of absolute rent.
So, cause the absolute rent received from the worst lands is the monopoly of private ownership of land, the condition for its formation- lower organic composition of capital - O (O - C: V, where C is the cost of the means of production; V- the cost of labor) and agriculture, source- surplus value created by the labor of agricultural workers.
Under exceptionally rare conditions, monopoly rent.
monopoly rent- based on the monopoly price of products of rare quality (durum wheat for obtaining flour with special baking qualities; special grape varieties for making world famous wines).
The fact is that for certain agricultural products (special varieties of grapes and tea, citrus fruits, etc.), produced in exceptional natural and climatic conditions, monopoly prices are formed that exceed the cost of their production. The demand for these goods is greater than their supply. Under these conditions, the upper price limit is determined only by the level of effective demand, i.e., market conditions. The difference between the monopoly market price and the value of the product forms the monopoly land rent, which is appropriated by the owner of rare earths. Consequently, the source of monopoly rent is outside agriculture. It is obtained in other sectors of the economy, and then through the mechanism market prices redistributed in the interests of the owner of rare earths.
Under the conditions of the transitional economy in Russia, there are corresponding changes in rent relations: in the reason and conditions for the formation of rent, in the sources of its formation, in distribution and appropriation. So, in agricultural enterprises (cooperative, joint-stock and other enterprises) differential rent I and II is formed. However, its source in the reorganized state and collective farms and other farms is not only the surplus labor of hired workers, but also the labor of the members of the farm. Since differential rent I, due to the natural fertility of the land, is not the result of better work of a given farm, then it should be mainly withdrawn from the farms and used in the public interest. In contrast, differential rent II is formed in connection with the additional costs of the economy, which gives it the right to appropriate appropriation of part of the rent. Another part of the rent may be appropriated by the state if it has taken part in improving the fertility of the soil.
Differential rent is also formed in peasant (individual) farms, in which there are differences in the fertility and location of land plots, in the productivity of additional investments in land. The sale of agricultural products from the best plots of land allows the peasants to receive a surplus of value, which forms the differential rent.