Download can income transfer programs help people to fulfill their basic needs?

NAF
International Working Paper Series
Year 2009
paper n. 09/03
CAN INCOME TRANSFER PROGRAMS HELP
PEOPLE TO FULFILL THEIR BASIC NEEDS? AN
ANALYSIS OF THE FACTORS THAT INFLUENCE
CONSUMPTION CHOICES OF POOR PEOPLE
Marco Cavalcante
United Nations World Food Programme
Uganda Country Office
The online version of this article can be found at:
http://economia.unipv.it/naf/
Scientific Board
Maria Sassi (Editor) - University of Pavia
Johann Kirsten (Co-editor)- University of Pretoria
Gero Carletto - The World Bank
Piero Conforti - Food and Agriculture Organization of the United Nations
Marco Cavalcante - United Nations World Food Programme
Luc de Haese - Gent University
Stefano Farolfi - Cirad - Joint Research Unit G-Eau University of Pretoria
Ilaria Firmian - IFAD
Firmino G. Mucavele - Universidade Eduardo Mondlane
Michele Nardella - International Cocoa Organization
Nick Vink - University of Stellenbosch
Alessandro Zanotta - Delegation of the European Commission to Zambia
Copyright @ Sassi Maria ed.
Pavia -IT
[email protected]
ISBN 978-88-96189-02-3
CAN INCOME TRANSFER PROGRAMS HELP PEOPLE TO
FULFILL THEIR BASIC NEEDS? AN ANALYSIS OF
THE FACTORS THAT INFLUENCE CONSUMPTION
CHOICES OF POOR PEOPLE
Marco Cavalcante*
Abstract
The paper analyses the factors that influence the consumption choices of poor people in rural
India. Using the antiproductivist approach, the paper demonstrates that besides income, other
factors, such as fashion, advertisements and social pressure, have a major influence on poor
people’s choices. The lesson from this paper is that, often, people chose not to fulfill their basic
needs rather than suffer social shame. Hence, in order to compensate the impact of these other
factors on the consumption choices of poor people, development organizations must ensure that
income-transfer programs are accompanied by sensitization programs.
JEL Code D1; I3; R2
1. Introduction
Many development organizations are piloting unconditional income transfers in a variety of
different contexts, the stated purpose of which is to help people move from a condition of
poverty and hunger towards well being (Gentilini, 2007; WFP, 2008; 2009). Yet a fundamental
question remains: is income the only factor that is influencing people’s consumption habits?
The consensus in “mainstream literature” is that income is indeed the only factor that is
influencing people’s consumption habits. The neoclassical - as well as others1 - hypothesis is
that: i) what people consume is limited by their purchasing power (i.e. they are incomeconstrained), ii) supply will create its own demand; iii) consumers aim to maximize utility; and
*
United Nations World Food Programme, Uganda Country Office. The author is grateful to Jimi Richardson, Mads
Lofvall, Jacqueline Nivet, Elisabetta Basile and Barbara Harriss-White for their comments. Please note: this paper does
not necessarily reflect the position of the United Nations World Food Programme.
1
Marx, 1887; Weber, 2002; Pareto, 1971.
iv) decisions are made rationally, which means buying at the lowest possible prices, without
being influenced by other factors (since, by assumption, consumption decision are taken on the
basis of full and relevant information about all market variables (Marshall, 1920; Walras, 1993).
The credibility of this hypothesis, however, has been challenged and there is a growing body of
evidence against it (Ariely, 2008; Hammond, 1996; Hodgson, 1988; Simon, 19832). This paper
provides further evidence against the theory of rational choice, arguing that, in fact, there are
several factors that determine consumers’ choices, of which income is only one.
The antiproductivist theoretical framework has been used to demonstrate my hypothesis. I will
demonstrate my hypothesis through: 1) a review of the existing literature on consumption
behavior (section 2); and 2) an analysis of secondary data and primary data regarding a case
study from three rural villages in Tamil Nadu, India. The primary data – mostly qualitative - has
been collected in three villages of rural Tamil Nadu in 2005 using the quota sampling method.
2. Literature review
Over a hundred years’ of debate concerning consumption behavior has failed to produce a
common position on what are the driving factors (or at least influencing variables) of
consumption. This section will present a brief history of mass consumption (2.1) as well as
outline a few key factors that influence people’s decision about what to consume (2.2; 2.3; 2.4;
2.5).
2.1 A brief history of mass consumption: the desire to consume
There is significant evidence that the upper classes in ancient societies (e.g. the Romans, Greeks,
Etruscans, Egyptians) had consumption patterns that were beyond subsistence levels 3. However,
it is difficult to determine the exact point in history when mass consumption started exceeding
subsistence levels. More complex still is the question as to why consumption began exceeding
subsistence levels – at least in Western Societies.
There are two main theories on the beginning of the so-called “society of consumption”4. The
most popular school of thought is the “productivist” one, which sees mass consumption as
2
A position of partial disagreement with the neoclassical approach is also in: Keynes, 1997; Friedman, 1957; Sen,
1984; and Modigliani and Brumberg, 1954.
3
With the terminology “beyond the subsistence level”, we mean goods or services not directly related to the satisfaction
of the basic needs, such as, for example, pictures for hanging on walls, figurines and personal ornaments.
4
This term has been coined after the second world war and used frequently by authors such as Galbraith, Marcuse,
Packard, and Baudrillard (Sassatelli, 2004).
having started during the 19th Century as a consequence of the industrial revolution, implying
that demand was being driven by supply. The second school of thought is the “antiproductivist”
one – this time, by no means a uniform theory - which sees mass consumption as having started
during the late 17th or early 18th Century as consequence of changes in human behavior and
choices, implying that supply was being driven by demand (Sassatelli, 2007).
According to the productivist theory, the beginning of the mass consumption beyond subsistence
levels in Western countries was sparked by technological advances, especially in terms of
production and transportation. A new economic model of production – commonly referred to as
“capitalism” – had created a larger quantity of goods and services at lower prices, meaning
increased accessibility for the population at large and a general increase in real incomes
(Corrigan, 1997).
According to the antiproductivist interpretation, mass consumption beyond subsistence levels
started considerably earlier than the industrial revolution (Fairchild, 1998) and it is not related
with any economic model of production, but rather with an embedded human “desire for
consumption” (Sassatelli, 2007). The antiproductivist school can be divided into three-subgroups: consumerists; modernists and exchangists.
“Consumerists” argue that the factor which caused the birth of mass consumption was the status
aspiration of the bourgeoisie who, by emulating the consumption patterns of the nobility, could
achieve social advancement (McKendrick, Brewer and Plumb, 1982). According to McKendrick,
Brewer and Plumb the bourgeoisie was driven to consumption by the marketing strategies of
entrepreneurs, which encouraged status aspiration.
“Modernists”, on the other hand, believe that the factor which caused the birth of mass
consumption was the growth in popularity of romanticist ethics, which were based on hedonism
and the pursuit of pleasure (Campbell, 1987). According to Campbell, the new romantic ethic
encouraged people’s desire to consume more, but this desire goes, beyond the good per se, it is a
desire of consumption. Campbell says that we desire to desire, always wanting new things, and
are caught in a constant circle of dissatisfaction.
Finally, “exchangists” argue that the factor which caused the birth of mass consumption was
increased “openness” in trade and monetary exchange. According to De Vries (1993), during
periods of decline in real incomes, households did not respond rationally by decreasing
consumption, but rather opted to work more so that they could obtain more money to exchange
for goods and services.
Tab. 1: The theses on the birth of the consumer society
Thesis
Author
Productivist
Historical Cause
Century
Place
Industrial Revolution; Standardized
XX
England
XVIII
England
XVIII/XIX
England
Households organization; Monetary
XVII/
Holland
exchange
XVIII
and cheap goods
Antiproductivist
o Consumerist
McKendrick
Commercialization system; Status
display
o Modernist
Campbell
Cultural consumption; Imaginative
hedonism
o Exchangist
De Vries
Source: Adapted from: Sassatelli, 2007: 15
In summary, according to “antiproductivist” theories, income does not seem to have played a
major role in the birth of mass consumption. This means that factors other than income must be
driving people’s decisions about what to buy. I will now briefly outline some of these factors.
2.3 Fashion
The word “fashion” comes from the Latin “facio”, meaning “to make”. In 1901 the Oxford
English dictionary defined “fashion” as “the process of making” (Kawamura, 2005). More
recently, Simmel (1971: 296) argues that “fashion is the imitation of a given example and
satisfies the demand for social adaptation”. Brenninkmeyer (1963) defines fashion as the
common way of dressing in a given historical time. Nowadays, the term “fashion” is most
commonly associated with a way of dressing, though it is also associated with eating habits,
accommodation choices, ways of speaking, etc.
The concept of fashion (in the modern sense) was born towards the end of the Middles Ages,
when people began searching for innovative habits relating to clothes, food etc. (Bailleux and
Remaury, 1996).
According to Braudel (1982) and Mukerji (1983), the aristocracy in Italy began consuming
luxury goods as early as the 14th Century in order to differentiate themselves from the rest of the
population, thereby strengthening their power. According to McCracken (1988), aristocrats were
constantly looking for ways to set themselves apart. These included, for example, legislation
which imposed dress codes on particular social classes and constantly-changing trends in fashion
(in order to keep ahead of the poor classes, who were trying to imitate them).
In the 19th Century, the aristocracy started losing its monopoly over “fashion”, ceding ground to
the expanding rich bourgeoisie. Only in the 20th Century, however, did the true
‘democratization’ of fashion occur, when the majority of the population - at least in Western
Countries - gained access to it (Roche, 1991).
According to Simmel (1971), fashion synthesizes people’s need to achieve social equity and, at
the same time, to differentiate themselves from each other. Simmel argues that, on the one hand,
individuals feel reassured by “belonging” to a particular social group, but that, on the other, they
also like to experiment with new trends - giving freedom to their fantasy - in order to create a
‘gap’ between their social group (or class) and other groups. This constant double-need of
belonging (lower class) and differentiating (upper class) – exacerbated by the concept of
“emulative envy” – is the driving factor behind fashion.
Simmel also maintains that ‘weak’ individuals are more influenced by fashion because: “[it]
expresses and at the same time emphasizes the tendency towards equalization and
individualization, and the desire for imitation and conspicuousness” (Simmel, 1971: 308).
Spencer (1967) and Fallers (1971) adopt a similar line to Simmel. According to Fallers for
example, there is a “trickle effect” that a) keeps pushing an “inferior” social group to imitate a
“superior” one; and b) keeps pushing a “superior” social group to differentiate themselves and
their symbols from the “inferior” one.
2.4 Advertisements
There are several definitions of “advertisement”. According to Testa (2007), advertisement is the
system of communication techniques aimed to promote consumption. According to Sassatelli
(2007), advertisements – as well as the other aspects of merchandizing, such as the packaging
and branding – aim to expand individuals’ needs, driving them towards the decision that a
particular good (or service) is fundamental to their satisfaction.
Evidence of advertisements go back as far as 4000 BC. In ancient Egypt, Rome, China, India and
Arabia, advertisements on walls or rocks were used to promote events and commercial products
(Testa, 2007). Over the course of history, advertisement techniques have been constantly
improved – particularly since the invention of printing, in the 15th Century - until today, where
we witness the use of “scientific” marketing techniques and approaches - such as sociodemographic research – in order to persuade customers to consume more (McKendrick, Brewer
and Plumb, 1982).
Wall posters; street banners; media spots (covering the written media, radio, TV and internet);
visual performances; shop window displays (the “spectacolarization” of goods); celebrity
endorsement; songs; and creative branding exercises; these are just some of the tools used by
entrepreneurs to convince people to consume their products (Codeluppi, 2006).
There are few doubts about the effectiveness of advertisement in influencing people’s choices
not only concerning what to consume (for example, the choice between two brands of the same
product), but also concerning whether to consume or not (Kotler and Scott, 1993).
Baudrillard (1972) argues that the needs of the individual are not innate, but rather are generated
through advertising campaigns and marketing strategies. According to this author, the
“production system” is the force that is generating need, the desire of desiring, that could be
applied to all the products and that lead to the “system of needs”.
According to Bauman (1992), advertisement plays an important role in determining consumption
choices. Advertisements present particular good (or service) as a tool for achieving the
privileged status of the protagonist (e.g. a famous character) or a desirable social condition (e.g.
wealth, peace). People then conclude that, by consuming the advertised goods (or services), they
can easily resolve their problems and frustrations. In this way, desire supplants need.
Furthermore, as they wait to consume, people experience feelings of excitement based on the
anticipation of what is about to happen.
2.5 Social pressure
The desire to belong to a group, or society, makes people behave in ways that do not contradict
the behavior of others. Sociologists and anthropologists have demonstrated that individuals tend
to replicate schemes, which allow them to “belong” (Merton, 1957; Fabris, 1971). This
phenomenon has been observed since time immemorial; ancient books such as the Bible or the
Veda are full of examples. In essence, people’s choices are shaped by society, particularly by: (a)
fear of exclusion, and; (b) the desire to demonstrate a decent (or high) social status.
The first, and most authoritative, scholar to study this phenomenon at length was the Norwegian
economist Thorstein Veblen during the 1930s. According to Veblen (2007), people consume not
only to satisfy their “biological” needs, but to show their wealth. In fact, the reputation of a
person is directly proportionate to his/her economic power (i.e. the more wealth an individual
has, the more he/she will be socially respected). There are two indicators for the economic power
of an individual: so-called “conspicuous leisure” and “conspicuous consumption”.
“Conspicuous leisure” is typical of a feudal society. It includes: showing idleness; acquiring
good manners; learning “dead” languages, and; engaging in any other activity that would
demonstrate that a person can “waste” his time (i.e. without engaging in any productive
activities, or work).
“Conspicuous consumption” is the dissemination of luxury (or useless) goods and services, such
as new expensive clothes, jewels or other costly items. “Conspicuous consumptions” can also be
made indirectly – such as through a wife, for example. Of importance is the fact that they are
‘flashy’ and shown in public, so as to display wealth and opulence. According to Veblen,
“conspicuous consumption” allows an individual to gain social respect, honor and prestige
within society. In other words, demonstrating a high level of consumption satisfies the
fundamental need to be accepted and respected within society - a need which is shared by even
the poorest people. On this particular point, Veblen (2007: 59) writes:
No class of society, even the most abjectly poor, forgoes all customary conspicuous consumption. The last
items of this category of consumption are not given up except under stress of the direst necessity. Very
much of squalor and discomfort will be endured before the last trinket or the last pretense of pecuniary
decency is put away. There is no class and no country that has yielded so abjectly before the pressure of
physical want as to deny them all gratification of this higher or spiritual need.
According to Veblen, following the transition from feudalism to capitalism, people started
preferring conspicuous consumption to conspicuous leisure. Conspicuous leisure could only
work in a society in which everybody knows everybody else while in a urban – and more
anonymous society – conspicuous consumption is a preferable way to show opulence (and hence
generate social respect). Corrigan (1997) believes that this transition is a natural passage towards
efficiency.
Although Veblen’s theory has received several criticisms (Davis, 1992; Leonini, 2000; Alberoni,
1964), it represents a significant milestone, which has inspired many others to develop theories
around this issue.
Lipovetsky (1989) argues that people no longer consume to gain a particular social status, or to
differentiate themselves from another group. They consume for personal satisfaction, to increase
their pleasure or comfort.
Bourdieu (1995) agrees that that emulation effect is not the driving factor behind consumption.
Choices are dominated by taste, which depends on “habitus” - a cultural model, acquired from
the family and the education system during the adolescence. Furthermore, Bourdieu has
demonstrated that consumption activities may not be motivated by emulation, but by
differentiation, whereby each class strives to distinguish itself from others
According to the Italian sociologist Di Nallo (1997), consumption is a way of communicating
individual social belonging. Individuals consume as if it were a form of speaking in order to
express their social characteristics.
There have also been attempts to redesign and modernize the approach of Veblen so that it
resonates better with the contemporary era (Brooks, 1981; Dusenberry, 1949; Leibenstein,
1950). For example, Enzensberger (1999) argues that the “conspicuous consumption” of the
modern era are no longer cars or jewels, but rather goods that are less directly buyable, such as
free time, silence, a clean environment, security etc.
In a study of the USA, Riesman (1969) concludes that there is a “standard package” which
covers all the goods and services that individuals need to consume in order to feel part of their
community/society, including: particular types of clothes; a TV; a fridge; furniture for the house
etc5. Any marginal deviation from this standard package would indicate that an individual
belonged to a particular religious or ethnic sub-group.
Another important concept introduced by Riesman is that of “anticipatory socialization”,
according to which certain individuals trying to adopt consumption patterns that do not belong to
their current social status. Finally, Riesman’s analysis shows how it is possible for rich people to
play down their wealth through low consumption (both in terms of cost and quantity), yet can
nonetheless differentiate themselves from lower classes on the basis of taste. Through this
behavior, individuals tend to create limits to those who aim to achieve their socioeconomic level.
3. Basic needs and consumption patterns in rural Tamil Nadu6
Section 2 briefly explored the history of mass consumption and illustrated the antiproductivist
theoretical frameworks that show the weakness of the theory of rational choice. The previous
section also analyzed a few elements that influence the choice of consumption such as fashion,
advertisement and social pressure. This section will focus on a case study of three villages in
rural India in which people are observed to be making consumption choices that keep them in a
state of poverty and hunger for fear of social stigmatization.
Following the literature review, section 3 will test the hypotheses that: a) people do not behave
rationally with regard to consumption choices and b) beside income, other factors – such as
fashion, advertisements and social pressure – have a major influence on people’s choices.
3.1 Methodology
Field work has been carried out between August and October 2005 in the villages of
Veerasambanur, Vinayagapuram and Nesal. The three villages belong to the rural area of the
northern part of the Tiruvannamalai district in the state of Tamil Nadu. The villages belong to a
group of 11 villages that have been studied repeatedly since the 1970s mainly in order to
understand the socioeconomic impact of the Green Revolution in the area (Harriss- White and
Janakarajan, 20047).
5
The Italian sociologist Alberoni (1964) identified a set of goods and services to be consumed in order to avoid feeling
marginalized.
6
This section has already partially appeared in Cavalcante, 2009.
7
The secondary data are all taken from this source and from the official Indian Census.
The research was of a qualitative deductive type. 41 structured interviews were conducted, as
well as 200 non-structured interviews - most of which were group interviews - from a total
universe population of 5000 people.
Out of the 41 structured interviews – the duration of which varied between 2 and 3 hours  12 interviews were done in Veerasambanur
 10 interviews were done in Vinayagapuram
 19 interviews were done in Nesal
With regard to the group interviews, the guideline provided by the Partecipatory Rural
Appraisal has been followed (Chambers, 1997)
The methodology used for the sample was the quota sampling; the categorization was based on
caste. The good respondents/informers were identified thought a pilot questionnaire. The decision
to categorize the sample according to caste is due to the importance of this social institution in
rural India. Barbara Harriss-White, who studied Tamil Nadu for more than 30 years, writes:
In small town south India (which we think does not differ much from most other regions
in this respect)… the remnants of occupation-based castes are organised in several loose
hierarchies based on work, diet, religion, language, land-based versus network forms of
organisation and the politico-administrative categories of the state (Harriss-White, 2002:
9)
She also adds: “The local economy is increasingly organised in corporatist forms based
directly or indirectly on caste”. (Harriss-White, 2002: 10).
The choice of a qualitative methodology is based on the fact that 1) in the studied area the
informal sector is predominant, hence official quantitative data on the local economy does
not exist or is not reliable; 2) women largely refused to participate in the interviews, hence
cutting out almost 50% of the potential sample; 3) the area has been the object of several
studies in the past. Hence, given the past experience, a) some people did not want to spend
time in interviews and b) some people wanted to participate in order to get something in
exchange (and in this regard, they would adopt a strategy to try to please the interviewers as
much as possible).
3.2 The socio-economic characteristics of the villages
In the three villages caste is the institution that regulates behavior, economic activity, livelihood
and social status. In the three villages there are two basic socio-economic groups. In the first
group are those who own land, mostly belonging to the Other Backward Castes, predominantly
Mudaliar, Vanniar and Yadava. The second group is those who do not own land. These people,
mostly Untouchables, are agricultural laborers that work the land owned by the higher castes.
Untouchables are both Hindu and Christians.
The untouchable communities live separately from the rest of the population, marginalized in a
peripheral area of the villages. The division between untouchable communities and other castes
is quite deep. Untouchables are allowed to pass through the area occupied by other castes, but
generally they are not welcomed to stay over. The other castes do not go to the untouchable area
unless there is a serious need. Commensality and endogamy are strongly practiced in the
villages. The use of dowry is widespread and practiced among all the communities without
distinction of caste or religion.
Nesal is a relatively big centre, with developed agricultural activities and some non-farm
activities which have been expanding in the last ten to fifteen years. It is easy to reach and
surrounded by well-irrigated land. Its proximity with Arni8 has pushed up the prices of land but
also allowed Nesal to develop its economic activity more rapidly.
Vinayagapuram is a medium size village, remote, fundamentally based on agricultural activities,
with a decent irrigation system. The ownership of the land is very fragmented. There are only 10
households which own more than 10 acres of land. Among the untouchable communities, of 200
households only 20 households own some land, maximum 2 acres, mostly dry.
Veerasambanur is a small village, remote, entirely dependent on farm activities, quite
undeveloped and with a poor irrigation system. The untouchable community of this village is
Christian so technically they do not belong to a Scheduled Caste and are not entitled to the
privileges reserved for them. Among the untouchable community, only 9 households own dry
land. The rest of the untouchable community works as landless agricultural laborers.
Arni, or Arani, is a big “market town” of Tiruvannamalai district with an official population of 60.688. The main
economic activities are rice paddies and silk saree weavers. See Basile, 2003.
8
Evidence from previous research indicates a context of high (and growing) inequality with
regard to the distribution of land among the population of the three villages (Harriss-White,
2004a). The table below shows that the Gini index calculated for the value of the land and of the
other agricultural-related tools is extremely high.
Tab. 2: Gini Index for the agricultural sector in the three villages
Nesal
Vinayagapuram
Veerasambanur
Land ownership
0.81
0.62
0.66
Other Agricultural-related goods
0.84
0.72
0.71
Source: Harriss-White, 2004: 160
According to Harriss-White (2004a), the deep inequality in the agricultural sector is a growing
phenomenon. In fact, from the 1980s to the 1990s, there has been a deterioration of both the
percentage of people with no land and the percentage of land controlled by the poorest 50% of
the population. The table below shows that – during the same period – the percentage of land
controlled by the richest 10% of the population increased (with the exception of
Vinayagapuram).
Tab. 3: Land owned by the richest 10% of the population,
Nesal
Vinayagapuram
Veerasambanur
1980s
51.7
49
30.7
1990s
64.5
42
40.4
Source: Harriss-White, 2004: 165
3.3 Changes in the agricultural sector
From 1970s until the pre-liberalization period, the agricultural sector in the three villages has
undergone major changes, in particular, the type of cultivation and use of technology (HarrissWhite, 2004a).
Field work done in the post-liberalization period has reported three different changes that can
also explain the crisis in the primary sector. These are: 1) a change in the type of cultivation; 2) a
change in the varieties of products; 3) a change in employment patterns. The conclusions are
quite similar for the three villages.
1) a change in the type of cultivation (tab.5); two types of change have been reported a) from
cultivation for subsistence to cultivation for the market, essentially from rice to sugar cane
(mostly in Nesal) and; b) from cultivation that requires a lot of water to cultivation that requires
less water, essentially from rice to nuts (mostly in Veerasambanur and Vinagayapuram).
Poongu – interviewed in Veerasambanur - said that he needed to convert his crops to nuts
because he did not have access to enough water to grow rice.
Tab. 4: The reported changes in the cultivations of the 3 villages
Original Cultivation
New Cultivation
Rice
Sugar cane
Rice
Nuts
Reason to change
To meet the market’s
demand
To save water
Source: Cavalcante, 2009: 137
2) a change in the varieties of products, in particular rice; there has been a change towards new
High Yield Varieties (HYV) that guarantee higher productivity in the case of an increasing
access to water. HYV are not new to this area (Harriss-White and Janakarajan, 2004). However,
since the 1990s, government subsidies to buy the seeds and the necessary quantity of fertilizers
and pesticides have gradually declined until 2000, when, according to the interviewed farmers,
they ended altogether. Tab. 6 shows the changes of varieties in Vinagayapuram from 1995 to
2005. Similar dynamics have been registered in the other two villages.
Tab. 5: The reported changes in the variety of rice in Vinagayapuram
1995
2005
Kullam chamba
Chinnaponni
Samba
ADT-36
Kullankar
ADT-39
Ponny
Ponny
Kichilly
Zero-43
Co-43
Zero-15
Gundu
Source: Cavalcante, 2009: 138
Interviewed farmers gave four reasons to justify their choice to switch to new varieties: i) new
varieties are more secure, because they show increased resistance to parasites; ii) new varieties
grow faster; iii) new varieties are more efficient, because their yield per Acre is higher; iv) new
varieties require less water9. It should be noted that all respondents had been subjected to some
sort of publicity promoting the characteristics of the new varieties. All the interviewed farmers
that had adopted these varieties agreed that it is worthwhile making additional investment in
seeds, fertilizers and pesticides in order to secure a higher yield.
3) a change in employment patterns due to:
a) the growing mechanization of farm activities. This phenomenon is not new in the area and
arrived together with the HYV and the Green Revolution (Harriss-White and Janakarajan, 2004;
Harriss, 1982). Nesal, where the land is less fragmented, experienced a boom in agricultural
machines. This phenomenon has been helped also by the marketing strategy of the tractors’
sellers and by the declining rate of interest10. Rate of interest fell both in the informal sector and
in the formal sector (tab. 7).
Tab. 6: Rate of interest for a loan of Rs. 1000
Informal sector
Formal sector
1980-1995
2005
1980-1995
2005
1030
1020
-
-
-
-
1180
1090
After 1 month
After 1 year
Source: Cavalcante, 2006: 357
In Vinagayapuram, in the past ten years, 5 new tractors and 4 power tillers have been bought,
although none of these new machines belong to the untouchable community. In Veerasambanur,
mechanization is very limited (only 1 tractor) probably due to the generally lower level of
income and to the characteristic of the land, mostly fragmented and dry. However more and
more landlords prefer to rent tractors during the harvest season.
b) The growing feminization of agricultural labour. This phenomenon – observed already by
Harriss-White (2004a) during her last research - has not been explored enough because of the
unavailability of women to participate in interviews. However, the reasons for this reported
change seems to be due to the fact that women progressively replace men that migrate to the
9
Every interviewed farmer agrees on the first three statements. The last one was only mentioned by one-fourth of the
respondents. Serious doubts arise about the scientific reliability of this last statement.
10
On the credit system in the three villages, see Colatei and Harriss-White, 2004.
cities (Vinagayapuram) or other sectors (Nesal) or because women offer cheaper labour
(Veerasambanur).
3.4 The causes of the crisis in the agricultural sector
The villages experienced an agricultural crisis for two reasons: 1) the depletion of underground
water sources due to the growing industrial and tertiary sectors of the area11; and 2) the terms of
trade.
Water in the villages is increasingly becoming a major problem 12. The scarcity of underground
sources is documented by the number of water wells that are now dry and the increased depth of
the sources. From about 30 feet of depth in 1990-5, water sources are now reported to be 90 feet
deep. While the new bore-wells are able to extract water from the deeper sources, they require
higher energy consumption, at a reported cost of about Rs.1500 every 6 months. Naturally the
water crisis has hit primarily the poorer households that have been forced to convert their crops
to nuts (that require dry land) or, in some reported cases, to sell all or part of their land13.
Kamal – interviewed in Vinagayapuram – stated that the water tank that he was using for
irrigating his field was dry all year. The only way he could obtain water was from the rain,
which was quite unreliable, or through the expensive hydro water pump which he could not
afford.
The second reported cause of the crisis in the agricultural sector is the worsening terms of trade
for the farmers (mostly landlords/OBC). As a consequence of the cut in government subsidies,
the cost of inputs has grown more in proportion to the cost of outputs. The decline in terms of
trade generated several problems with the landlords’ budgets. Furthermore, interviewed
landlords complained about a general increase in the other expenditures such as domestic energy,
transport, education and health.
11
In particular, the high number of private water companies and the lack of legislation are the major causes of this
overexploitation of underground water sources.
12
The problems related with water did not start only in the post-liberalization period. Already in 1993, Janakarajan
(2004) underlined the dramatic situation with regard to irrigation and water exploitation. According to Harriss (1982)
the declining use of the water tank started after the Green Revolution with the beginning of mechanization and the
possibility to dig waterholes.
13
Similar results have been observed from Janakarajan (2004).
According to Subu – interviewed in Nesal – the growing cost of inputs has seriously affected his
family’s budget and, as consequence, in their production/income. Furthermore, he said that by
using the private sector, his family is spending more and more on education and health.
3.5 The impact of the agricultural crisis on income
While all of the changes described above are generally shared by the three villages, there are
some differences in how these changes have affected those owning land and those who do not.
The landlords felt the crisis and their incomes declined but much less severely than those of the
landless. The changes in agriculture explained above had several consequences on landless
people whose livelihood was dependent on agriculture (tab. 8).
Landless people, belonging primarily to the untouchable caste, used to work the land of the
landlords for a day wage of Rs. 50 for men and Rs. 20 for women. During the harvest, salaries
could be paid in rice (10 kg for men and 6 kg for women). According to the landless workers
interviewed, their wage has not increased in years while prices of goods and services
significantly increased14. Furthermore, the demand for labour has declined due to the changes in
the type of cultivation (nuts and sugar cane require less work) and due to mechanization. For
these reasons, all the landless workers interviewed complained of a steep drop in their income.
Kalim – a landless agricultural worker interviewed in Nesal – complained that only a few years
ago he would work twice as many days as now. He also added that while the daily wage did not
change, the prices of essential goods and services rocketed.
Tab. 7: Changes in agriculture and consequences on landless laborers
Change
Details
Consequence on
Coping
landless
Strategies/Effects
 Migration
Type of
From rice to sugar cane
Less work
cultivation
From rice to nuts
Less work
Varieties of
From old HYV rice to new
Limited
products
HYV rice
Employment
Mechanization
Less work
pattern
Feminization
Less work/salary15
(Vinagayapuram)
 Non-farm
activities
(Nesal)
 Poverty
(Veerasambanur)
Source: Cavalcante, 2009: 140
14
This phenomenon represents a change in direction compared to the trend observed during the 1970s, 1980s and 1990s
where salaries have been reported to increase much faster than prices (Harriss-White, 2004b: 380)
15
This answer comes from a male perspective.
The responses and/or the effects of this reported income decline vary between the three villages.
In Nesal, several people reported conversion to non-farm activities, mostly in the near Arni.
People generally work in the local rice paddies traveling every day from Nesal to Arni. In
Vinagayapuram, landless people reported a deep drop in their incomes. A common response to
this situation is to migrate to Chennai or Banagalore to work in the construction sector as
builders16. However, this option is limited to young people. In Veerasambanur, a growing
underemployment seems to be the only effect of the changes in agriculture. Migration and nonfarm activities are extremely limited. Due to the characteristics of migration, remittances for the
three villages do not seem to play a relevant role on income.
In addition, landless people complain about a general increase in expenditures such as domestic
energy, transport, education and health. Moreover, landless people complain about a general
increase in Public Distribution System (PDS) product prices (in particular food) together with a
drop in the quality of the supply, over the course of the past 10-15 years.
While more in depth studies on the food security of the area are needed, the reported trends on
income suggest that access to food, one of the four elements of food security17, is in danger and
that hunger is a concrete risk especially among the most vulnerable categories such as children,
elderly people, landless workers and untouchables. Similar conclusions – summarized in table 9 have been observed by Harriss-White, Janakarajan and Colatei (2004)
Table 8, Percentage of families whose food expenses exceed earned income
Nesal
Vinagayapuram
Verasambanur
9
17
16
Source: Harriss-White, Janakarajan and Colatei, 2004: 36
Finally, the research reported food availability is not a problem while utilization remains
unexplored due to the lack of data18.
16
On migration, see Jayaraj (2004).
17 The four elements of food security are: access, availability, utilization and vulnerability.
18
The problem of data is exacerbated by the fact that people are reluctant to go to the clinic for diarrhea related disturbs.
3.6 The impact of the agricultural crisis on consumption
Despite a reported decline in income, in the three villages – among all social groups – there has
been an increase in goods’ and services’ expenditure. During the last fifteen years, for example,
the three villages have registered an increase in expenditures for health, education and
ceremonies such as weddings.
During one group interview in Vingayapuram, people were complaining that their expenditures
for health and education increased dramatically. The reasons for such an increase varied but most
of the people compute this to the fact that, given the declining quality of public services, they
were “forced” to use the private sector.
Rajesh – interviewed in Nesal – said that his whole life is spent working to pay the dowry for the
future weddings of his two daughters. While Vijay – interviewed in Veerasambanur – said that
nowadays people “had” to have a luxurious wedding ceremony otherwise the shame on the
family would be enormous.
It is legitimate to impute the increase to:
1) the cuts in public expenditure in the welfare state force people to spend more in goods and
services that are no longer provided by the state or that are provided at unacceptably low levels.
People interviewed, from all the villages and from all the social groups, reported a significant
decline in the level of public health and education. There is not one health center in
Veerasambanur and Vinagayapuram. While there is a health center in Nesal, its catchment area
has increased dramatically over the course of the past few years, and now includes a patient
caseload of over 30.000. Consequently, the sole doctor assigned is reported to be either busy or
absent. Two nurses work at the center, but those interviewed complained of their incompetence
and stated they do not trust their abilities. Consequently, in cases of real need, villagers prefer to
go to Arni and see a private doctor.
On the education side, all three villages have primary schools but over the course of the past ten
to fifteen years, school managers complained of a drastic cut in their budget which has resulted
in crowded and overwhelmed classes of up to 40 students. Villagers complained about the low
quality of public schools and, those who can afford it, send their children to private schools.
As we saw above, the cuts in public expenditure have also affected the expenditures for goods. In
particular, there has been a reported increase in the expenditures a) for agricultural input, due to
the cuts in agricultural subsidies (especially for landlords), and b) for food, due to the cuts in the
PDS (especially for landless people).
2) Nevertheless, cuts in the public expenditure do not seem to be enough to explain the increased
expenditure for good and services. In the three villages, I have registered an imitation effect, a
sort of sanskritization of consumption that closely resembles a phenomenon studied by
Srinivas19, enhanced by the extended diffusion of media such as radio and TV and the growing
influence of advertisements – and in part fashion. The process seems to begin among the higher
classes (castes) who have prospered from liberalization and, as a consequence of this
improvement, have started to consume more. The lower classes (castes) try to imitate the
consumption patterns of the rich, hence the "sanskritization" of consumption. In this case the
emulation process does not regard religious habits but the pattern of expenditures. This process is
amplified by the spread of television in rural areas which allows the poor to easily identify the
consumption patterns of the new, or old, rich people.
Despite claiming a steep drop in their income and despite the fact that none of them own a toilet
in their house, 75% of landless people interviewed say that at the top of their consumption
preferences is the purchase of electronic devices such as televisions or mobile phones. In the last
ten-fifteen years, in Veerasambanur, 40 households have bought a TV and one person owns a
mobile phone20. In Vinagayapuram, most of the OBCs have a TV and recently 7 untouchable
households have bought a TV, of which 3 are color TVs. Furthermore, 10 households have a
telephone line. In Nesal, many OBC have a TV and 4 households have also a VHR. Two people
own mobile phones.
50% of the interviewed people said that they had spent more than they could afford in wedding
ceremonies for their daughters. All of the interviewed people think this is a rational behavior and
they would even be willing to take a loan to pay a daughter’s wedding in the future, even if they
think they would hardly pay back the debt.
19
The sociologist Srinivas during the 1950s has coined the term sanskritization to indicate the emulation process low
castes implement towards the practices and the uses of the so-called twice-born castes. See Srinivas, 1962; 1989.
20
In the village – at the time of the field work – there was no coverage for using any mobile phone company.
Another example of “irrational expenditures” is the birth delivery. In Veerasambanur there is an
efficient system of mother and child care. A nurse makes weekly visits to pregnant women,
giving them assistance by providing vitamins and other needed drugs, free of charge. At the
moment of delivery, the woman is brought to the health center where the doctor assists the event.
No fees are charged. Despite all this, people want to bring their wives to private doctors. For
those who have no money at all, they would take a loan rather than allowing their wife to deliver
their first born at the public center.
Ragupati – interviewed in Veerasambanur – said that it was now fine for his wife to deliver in
the public health centre but, regardless of his economic possibilities, he would never have
allowed her to deliver their first born there, in particular because he was a little boy.
In answer to the question about the reasons for such behavior, people mostly answer that
purchases of electronic devices; sending their child to a private school; sending their father or
their wife to a private doctor; and providing a large dowry for daughters are necessary to respond
to a sort of “social obligation” that, if not respected, would bring shame on the family.
In answer to the question about how they are able to afford the increase in consumption
expenditure, despite a drop in their income, interviewed people listed three sources (graph 1): 1)
eroding savings (mostly landlords); 2) contracting debts (both landlords and landless) and; 3)
declining food consumptions (landless).
Eroding savings is self-explanatory. Contracting debts is facilitated by the lower interest rate
practiced among the informal sector and is quite easy to access in all three villages 21. Declining
food consumption (both in terms of quantity and quality of the food basket) is a phenomenon that
would need further analysis; it seems that such a decline in food consumption, as a means to
increase other expenditures, is facilitated by commensality. In fact by not showing their food
consumption, people do not suffer public judgment22.
Graph 1: Household expenditures in a context of income contraction
21 Moreover, already in the 1990s, Harriss-White and Colatei (2004) confirmed this trend by underlining that only a
small fraction of credit was coming through the formal system and that around 40% of the total amount taken was used
for “non-productive” expenditures.
22
This phenomenon arose in the interviews among untouchable communities. However, people did not seem to like to
speak about their food habits. The research has not taken any anthropometric data and so cannot access the real impact
on hunger.
Why?
•Cuts in public expenditure
•Imitation effect
Expenditur
e
Incom
e
Expenditu
re
How?
Incom
e
•Eroding savings
•Contracting debts
•Declining food consumption
Source: Author
4. Conclusion
Section 2 showed how income is only one factor that influences consumption choices; others,
such as fashion, advertisements and social pressure, also exist and can have a major impact on
people’s choices. In particular, at the beginning of the section, we looked at the antiproductivist
approach, which theorizes that income did not play a major role in the birth of mass
consumption. Subsection 2.3 explored the role of fashion on people’s consumption choices. The
subsection argues that fashion, through consumption, tends to fulfill the demand of social
adaptation, in an endless spiral of imitation. Subsection 2.4 focused on advertising as a system of
communication that aims to promote consumption. The subsection states that – throughout all
history – advertisements have always played an important role in influencing people’s choices on
what to consume. Subsection 2.5 examined the way society could influence people’s behavior. In
particular, the subsection focuses on the work of Veblen, according to which people’s choices
are shaped by the fear of exclusion as well as the desire of demonstrating a high (or higher)
social status.
Section 3 presented findings from field research conducted in three villages of rural Tamil Nadu.
The aim of this section was to demonstrate that: a) people do not behave rationally with regard to
consumption choices, and b) besides income, other factors – such as fashion, advertisements and
social pressure – have a major influence on people’s choices. The data collected demonstrates
that – contrary to ‘conventional wisdom’ - increases in consumption can coincide with declines
in income, the implication being that people’s behavior is not always “rational”. In the case of
the Tamil villages, although the agricultural crisis had adversely affected the incomes of
villagers - in particular, those of the landless agricultural laborers - consumption expenditure
increased – even among the poorest of the poor.
Two factors were influencing people to continue increasing their consumption, despite declines
in real income (caused by cuts in public expenditure which had resulted in decreasing quality and
price inflation for goods and services previously provided or subsidized by the government). The
first factor was a desire to maintain a decent standard of living. The second factor was an
imitation effect – fostered by the power of fashion, the dissemination of advertisements and an
instinctive social pressure – that was driving people - even the poorest of the poor - to copy the
consumption patterns of the upper castes (classes) in order to show their “opulence” and gain
social respect.
The lesson from the case study is that, often, people chose not to fulfill their basic needs rather
than suffer social shame. Depending on the specific goal of the income-transfer programs,
development organizations need to analyze how the objectives will be achieved and, if increased
food consumption is one of the objectives, sensitization campaigns will be necessary. Such
sensitization programs would – at least in part – counteract the power of fashion, advertisements
and social pressure, encouraging the poor – who are often illiterate or poorly educated - to direct
their consumption towards goods and services which can directly contribute towards their and
their families’ well being. Alternatively, if a specific social behavior change is desired,
conditions for cash distribution could be the best way forward.
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