Debt and vulnerability: indebtedness, institutions and smallholder agriculture in South India

ABSTRACT

Expanding access to credit remains a key central government strategy for promoting agricultural development and livelihood diversification in south India and more widely. Smallholders borrowing from multiple credit sources are faced with obligations in addition to financial repayment. Available evidence on the consequences of indebtedness extending beyond monetary debt and its influence on vulnerability is incomplete in important ways. This paper presents an integrated vulnerability framework and illustrates the framework through case studies of three pairs of smallholder clients and credit sources. Using process-tracing and progressive contextualization methods, this paper shows the diversity of feedbacks that shape indebtedness and provides examples of social-ecological consequences. Unpacking these consequences in individual cases demonstrates indebtedness as an important root cause of vulnerability, which is in contrast to an examination of proximate causes, such as credit policy or temperature, that is the focus of a large share of scholarship. The paper shows that different credit sources are associated with different sets of obligations, leading to varied livelihood and agricultural consequences. Suggesting ‘credit stacking’ as an important adaptation strategy and research agenda item, the paper makes a plea for careful analysis of the conditions when credit is a factor in adaptive capacity and indebtedness of vulnerability.

KEYWORDS:

• Credit
• obligations
• rainfed agriculture
• social-ecological

Acknowledgements

This work is the consequence of several debts. The first is to the two anonymous reviewers whose suggestions have greatly improved the paper. I owe thanks for fieldwork support to friends and colleagues at The Watershed Support Services and Activities Network (WASSAN), especially Kumar, Ramu, Laxman, Bhagyalaxmi, Ravindra, and Ramchandrudu. Several farmers, government and bank officials and NGO staff, who will remain anonymous, offered as much time as I wished for numerous enjoyable discussions. Special thanks to Suhas Bhasme, Ashwini Chhatre, Forrest Fleischman and Pushpendra Rana for reviewing early drafts, Varun Goel for assistance with indebtedness survey data, and Jesse Ribot for challenging me to develop arguments around abilities and vulnerability. I thank the RRA Summer Fellowship at the Indian School of Business and the Graduate College Dissertation Grant at the University of Illinois for offering the possibility to write this paper.

Disclosure statement

No potential conflict of interest was reported by the author.

Note on contributor

Vijay Ramprasad is a post-doctoral associate in the Department of Forest Resources at the University of Minnesota. His work broadly focuses on governance for environmental sustainability and societal well-being in less-developed regions. To this end, his research aims to create usable science relating to livelihoods of farmers, sustainability of agro-ecosystems and forests, and adaptation to impacts of climate change.

ORCID

Vijay Ramprasad http://orcid.org/0000-0003-2636-0090

Notes

1 Lazzarato (2012, 89): ‘Debt constitutes the most deterritoralized and the most general power relation through which class struggle is waged’.

2 Peebles (2010), Aitken (2015), Ruddle (2011), and Taylor (2013) list various descriptions of the burden. Look at Marcel Mauss’s The gift: the form and reason for exchange in archaic societies for a contrasting study on gift and debt. Greenberg (1980) describes the conceptualization of indebtedness, associated motivations, and cognitive and behavioral consequences.

3 Contrast this with Mosse (2010) who presents poverty in a relational context.

4 Adapted from Farrington, Mosse, and Rew (2005).

5 Proximate causes are defined here as causes or unsafe conditions that existed immediately before the event leading to social-ecological consequences. Root causes are defined as social-structural causes that influence social-ecological consequences independently or by contributing to proximate causes.

6 Refer to Venkateshwarlu and Da Corta (2001) for a detailed illustration of the cottonseed cross-pollination process, and Singh (2002) for contract farming in India.