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These systems came to put farmers in a cycle of debt largely because they were obligated to borrow from and sell to one person. That person, especially if he were unscrupulous, could ensure that the farmer would remain permanently in debt.
For example, a sharecropper might have to buy seeds and other things from a local merchant (or even from the person whose land he was using) on credit. He would do this so as to be able to plant a crop and survive until the crop was ready to be sold. The seller could set the price for these necessities. When the crop was ready to be sold, the same person would often buy the crop from the sharecropper.
An unscrupulous person could easily manipulate the system. He could charge high prices for supplies and pay low prices for crops. He could impose fees or high interest rates. By doing things like this to poor farmers who lacked education or power, the merchants/land owners could keep the sharecroppers in permanent debt.
Sharecropping became a cycle of debt for many people who were part of this system. Many sharecroppers were former slaves. When they became free, they didn’t have the resources to buy all the things they needed in order to farm the land. As a result, they rented land from the landowners. They also had to buy the supplies, often from the landowner, on credit. Some of the landowners saw this situation as an opportunity to take advantage of the sharecropper. They charged the sharecroppers very high prices for the seeds and supplies they bought on credit. In some case, the sharecroppers also had to buy food and clothing on credit, also at very high prices. The interest rates the sharecroppers were charged were also often very high.
When the sharecropper harvested his crops, he often didn’t make enough money to repay the debt to the creditor. Once in debt, many sharecroppers remained tied to the landowners for many years as they were forced to sign contracts that were very favorable to the landowner.
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