The Question of Traders as Credit Agents in India

Questions the orthodoxy that private traders, especially agricultural traders, are inefficient, exploitative, prone to cheat, hoard or speculate. Alternatively, the paper considers private agricultural traders as credit agents mainly because of the failure of public sector to provide co-operative, productive credit. The controversial nature of considering private traders as credit agents is acknowledged and empirical work in agrarian landscapes of differentiated owner occupancy in South India, capitalist agriculture in West-Central Tamil Nadu, and highly inegalitarian sharecropping in West Bengal are examined. In these studies trader credit is analysed within the context of property relations and other markets.

In concluding, the paper asks and answers questions like:

• Could trader credit agencies be regulated?
• Could credit be extended to traders positioned lower down the farm system to enable them to act as credit agencies which would allow small traders to compete with magnates?
• Should credit agencies be tightened in view of their adverse impacts, although trader credit does not invariably produce such impacts?