STRUCTURAL ADJUSTMENT PROGRAMS AND POVERTY IN...
Transcript of STRUCTURAL ADJUSTMENT PROGRAMS AND POVERTY IN...
CAN INCOME TRANSFER PROGRAMS HELP PEOPLE TO FULLFILL
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
* 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
well as others1 - hypothesis is that: i) what people consume is limited by their
purchasing power (i.e. they are income-constrained), ii) supply will create its
own demand; iii) consumers aim to maximize utility; and 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
1 Marx, 1887; Weber, 2002; Pareto, 1971. 2 A position of partial disagreement with the neoclassical approach is also in: Keynes, 1997; Friedman, 1957; Sen, 1984; and Modigliani and Brumberg, 1954.
2
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 levels3. 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 having started during the 19 th 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
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).
3
production, but rather with an embedded human “desire for consumption”
(Sassatelli, 2007). The antiproductivist school can be divided into three-sub-
groups: 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 Historical Cause Century Place
Productivist Industrial Revolution;
Standardized and cheap goods
XX England
Antiproductivist
o Consumerist McKendrick Commercialization system; XVIII England
4
Status display
o Modernist Campbell Cultural consumption;
Imaginative hedonism
XVIII/
XIX
England
o Exchangist De Vries Households organization;
Monetary exchange
XVII/
XVIII
Holland
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
5
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
6
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 15 th Century - until today,
where we witness the use of “scientific” marketing techniques and
approaches - such as socio-demographic 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
7
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”.
8
“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.
9
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 5 The Italian sociologist Alberoni (1964) identified a set of goods and services to be consumed in order to avoid feeling marginalized.
10
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
6 This section has already partially appeared in Cavalcante, 2009.
11
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).
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 Parteci-
patory 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)
7 The secondary data are all taken from this source and from the official Indian Census.
12
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
13
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.
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
8 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.
14
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 (Harriss-White, 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
15
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 Reason to change
Rice Sugar caneTo meet the market’s
demand
Rice Nuts 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
16
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
After 1 month 1030 1020 - -
After 1 year - - 1180 1090
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
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.
17
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 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 problem12. 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 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).
18
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.
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 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
19
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
landless
Coping
Strategies/Effects
Type of
cultivation
From rice to sugar cane Less work Migration
(Vinagayapuram)
Non-farm
activities (Nesal)
Poverty
(Veerasambanur)
From rice to nuts Less work
Varieties of
products
From old HYV rice to
new HYV rice
Limited
Employment
pattern
Mechanization Less work
Feminization Less work/salary15
Source: Cavalcante, 2009: 140
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 non-farm 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.
(Harriss-White, 2004b: 380)15 This answer comes from a male perspective.16 On migration, see Jayaraj (2004).
20
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.
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.
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.
21
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
22
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
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.
23
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.
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
20 In the village – at the time of the field work – there was no coverage for using any mobile phone company.
24
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 villages21. 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
Source: Author
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.
25
Why?
How?Eroding savingsContracting debtsDeclining food consumption
Cuts in public expenditureImitation effect
Income Income
Expenditure Expenditure
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.
26
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.
Bibliography
Alberoni F., 1964, Consumi e Societa’, il Mulino, Bologna
Ariely D., 2008, Predictably Irrational, HarperCollins Publishers, New York
Bailleux N. and Remaury B., 1996, La Moda. Usi e Costumi del Vestire,
Electa, Milan
Basile E., 2003, “Società Civile e Sviluppo Capitalistico nelle Campagne del
Tamil Nadu”, in Basile E., Milanetti G. and Prayer M., Le Campagne
27
dell’India. Economia, Politica e Cultura nell’India Rurale Contemporanea,
F. Angeli, Milano
Baudrillard J., 1972, Il Sistema degli Oggetti, Bompiani, Milan
Bauman Z., 1992, Intimations of Post-Modernity, Routledge, London
Bourdieu P., 1995, Ragioni Pratiche, il Mulino, Bologna
Braudel F., 1982, Civilta’ Materiale, Economia e Capitalismo, Einaudi,
Torino
Brenninkmeyer I., 1963, The Sociology of Fashion, Westdeutscher Verlag,
Koln
Brooks J., 1981, Showing Off in America: From Conspicuous Consumption to
Parody Display, Little, Brown and Company, Boston
Campbell C., 1987, The Romanthic Ethic and the Spirit of Modern Con-
sumerism, Basil Blackwell, Oxford
Cavalcante M., 2006, La Liberalizzazione nell’India Rurale. Uno Studio su
Tre Villaggi nel Nord del Tamil Nadu, Available at:
http://padis.uniroma1.it/getfile.py?recid=546
Cavalcante M., 2009, “Income-based Estimates vs Consumption-based Esti-
mates of Poverty: Evidence from Rural Tamil Nadu after Liberalization”, in
Basile E. and Mukhopadhyay I., The Changing Identity of Rural India, An-
them South Asian Studies, Kalkata
Chambers R., 1997, Whose Reality Counts?, ITDG Publishing, London
Codeluppi V., 2006, Manuale di Sociologia dei Consumi, Carocci Editore,
Rome
Corrigan P., 1997, The Sociology of Consumption, Sage Publication, London
Davis F., 1992, Fashion, Culture and Identity, The Chicago Univeristy Press,
Chicago
De Vries J., 1993, “Between Purchasing and the World of Goods”, in Brewer
J. and Porter R., Consumption and the World of Goods, Routledge, London
Di Nallo E., 1997, Il Significato Sociale del Consumo, Laterza, Bari
Dusesenberry J.S., 1949, Income Saving and the Theory of Consumer Behav-
ior, Harvard University Press, Cambridge, Massachusetts
28
Enzensberger H.M., 1999, Zig Zag. Saggi sul Tempo, il Potere e lo Stile,
Einaudi, Turin
Fabris G. (ed.), 1971, Sociologia dei Consumi, Hoepli, Milan
Fallers L.A., 1971, “Consumi e “Trickle Effect””, in Fabris G., 1971
Friedman M., 1957, A Theory of the Consumption Function, Princeton Uni-
versity Press, Princeton
Gentilini U., 2007, “Cash and Food Transfer: A Primer”, Occasional Paper
no.18, WFP, Rome
Hammond K.R., 1996, Human Judgement and Social Policy: Irreducible Un-
certainty, Inevitable Error, Unavoidable Justice, Oxford University Press,
Oxford
Harriss J., 1982, Capitalism and Peasant Farming: Agrarian Structure and
Ideology in Northern Tamil Nadu, Oxford University Press, Oxford
Harriss-White B., 2002, “India’s Informal Economy, Facing the 21st Century”,
Available at: http://www.arts.cornell.edu/econ/indiaconf/Harriss-White2 .
pdf#search=%22Rural%20India%20 Facing%20the%2021st%20Century
%22
Harriss-White B., 2003, India Working, Cambridge University Press, Cam-
bridge
Harriss-White B., 2004a, “Labour, Gender Relations and Rural Economy”,
in Harriss-White B. and Janakarajan S., 2004
Harriss-White B., 2004b, “Food Nutrition and the State in Northern Tamil
Nadu”, in Harriss-White B. and Janakarajan S., 2004
Harriss-White B. and Colatei D., 2004, “Rural Credit and Collateral Ques-
tion”, in Harriss-White B. and Janakarajan S., 2004
Harriss-White B. and Janakarajan S., 2004, Rural India Facing the 21st Cen-
tury, Anthem Press, London
Harriss-White B., Janakarajan S. and Colatei D., 2004, “Introduction: Heavy
Agriculture and Light Industry in South Indian Villages”, in Harriss-White
B. and Janakarajan S., 2004
29
Hodgson G.M., 1988, Economics and Institutions. A Manifesto for a Modern
Institutional Economics, Polity Press, Cambridge
Kawamura Y., 2005, Fashion-ology. An Introduction to Fashion Studies,
Berg, New York
Keynes J.M., 1997, The General Theory of Employment, Interest, and Money,
Prometheus Books, Amherst
Kotler P. and Scott W.G., 1993, Marketing Management, Isedi UTET, Turin
Jayaraj D., 2004, “Social Institutions and the Structural Transformation of
the Non-Farm Economy”, in Harriss-White B. and Janakarajan S., 2004
Janakarajan S., 2004, “Irrigation: the Development of an Agro-Ecological
Crisis”, in Harriss-White B. and Janakarajan S., 2004
Leibenstein H., 1950, “Bandwagon, Snob and Veblen Effect in the Theory of
Consumer’s Demand”, in Quarterly Journal of Economics, no.64
Leonini L., 2000, “Consumo”, in Melucci A (ed.), Parole Chiave. Per un
Nuovo Lessico delle Scienze Sociali, Carocci Editori, Rome
Lipovetsky G., 1989, L’Impero dell’Effimero. La Moda nelle Societa’
Moderne, Garzanti, Milan
Marshall A., 1920, Principles of Economics, Macmillan, London, Available
at: http://www.econlib.org/library/Marshall/marPCover.html
Marx K., 1887, Capital: A Critical Analysis of Capitalist Production, Avail-
able at: http://etext.virginia.edu/toc/modeng/public/MarCapi.html
McCracken G., 1988, Culture and Consumption: New Approaches to the Sym-
bolic Character of Consumer Goods and Activities, Indiana University
Press, Bloomington
McKendrick N., Brewer J. and Plumb J.H., 1982, The Birth of a Consumer
Society: The Commercialization of Eighteen-Century England, Indiana Uni-
versity Press, Bloomington
Merton R.K., 1957, Social Theory and Social Structure, The Free Press, New
York
30
Modigliani F. and Brumberg R., 1954, “Utility Analysis and the Consumption
Function: An Interpretation of Cross Section Data”, in Kurihara K. (edited
by), Post Keynesian Economics, New Brunswick, London
Mukerji C., 1983, From Graven Images: Patterns of Modern Materialism,
Columbia University Press, New York
Pareto V., 1965, Manuale di Economia Politica, Bizzarri, Rome
Riesman D., 1969, A Che Serve l’Abbondanza?, Bompiani, Milan
Roche D., 1991, Il Linguaggio della Moda, Einaudi, Turin
Sassatelli R., 2007, Consumer Culture: History, Theory and Politics, SAGE
Publications Ltd, London
Sen A.K., 1984, Resources, Values and Development, Blackwell, London
Simmel G., 1971, On Individuality and Social Forms, The University of
Chicago Press, Chicago
Simon H.A., 1983, Reason in Human Affairs, Stanford University Press,
Stanford
Spencer H., 1967, Principi di Sociologia , UTET, Turin, original title: The
Principles of Sociology
Testa A., 2007, La Pubblicita’, il Mulino, Bologna
Veblen T., 2007, The Theory of the Leisure Class, Oxford University Press,
Oxford
Walras L., 1993, The Equilibrium Economics, Routledge, London
Weber M., 2002, The Protestant Ethics and the Spirit of Capitalism and Other
Writings, Penguin Classics, London
World Food Programme, 2008, “Strategic Plan 2008-11” available at:
http://www.wfp.org/content/wfp-strategic-plan-2008-2011
World Food Programme, 2009, “Targeted Food Assistance for Relief and
Recovery of Refugees, Displaced Persons and Other Vulnerable Groups –
Uganda 10121.3”, Available at: http://www.wfp.org/content/targeted-food-
assistance-relief-and-recovery-refugees-displaced-persons-and-other-
vulnerable-groups
31
32