Poverty, Inequality and Rural Development

Poverty alleviation would be widely accepted as the single most important ultimate objective of development. There would be much less agreement on the policies appropriate to achieving this objective. Some of the relevant considerations are addressed and appraised in the contributions to this volume. Poverty is a major problem in itself, and is inextricably linked to many other economic, social, political and environmental problems observed in the modern world. The World Development Report 1990 took poverty as its theme. After noting the rapid progress of developing countries over 1965–85 in terms of economic growth rates and improvements in social indicators, the editors comment that ‘it is all the more staggering — and all the more shameful — that more than one billion people in the developing world are living in poverty … struggling to survive on less than $370 a year’ (World Bank, 1990, p. 1). Roughly speaking, more than a fifth of the world’s population live in absolute poverty; of these almost half live in South Asia, and about one-fifth are in Sub-Saharan Africa; in both cases the poor account for about half the population. While urban poverty and squalor is not to be ignored, it remains true that the poor are predominantly resident in rural areas: over 80 per cent of the poor in Asia and Sub-Saharan Africa live in rural areas, and even for most of the relatively urbanised Latin American countries more than half the poor live in rural areas (World Bank, 1990, p. 31).

Both before and since Independence, concern has been expressed about the plight of India’s impoverished smaller farmers. This chapter reports on a village case study of one aspect of their problems: the type of post-harvest ‘distress sales’ of crops, at low prices, that occur due to farmers’ indebtedness to their local moneylenders (see inter alia Nadkarni 1980, Rudra, 1983). The study also surveys exchange relations more broadly, taking into account sales of produce, food purchases, and credit relations. Data for the study, obtained from informal discussions and questionnaire interviewing with local inhabitants, is set against both neoclassical and political-economy explanations of economic behaviour.