Credit Constraints and Distress Sales in Rural India: Evidence from Kalahandi District,Orissa

The literature on the rural credit market in India (and elsewhere) has generally assumed that peasant farm households are rationed in their access to subsidized formal credit. Because of a lack of infrastructure and poor access to institutional credit, such farmers are exploited by means of an interlocked market connecting informal credit to the sale of paddy. The resulting gap, between the sale by a borrower of paddy at a predetermined low price, and the price of this commodity on the open market, constitutes the amount of what is termed a distress sale. The latter is itself influenced by the bargaining capacity (or lack thereof) of the peasant farmer who borrows on the informal market. Also of importance in determining whether or not a cultivator is compelled to resort to the informal credit market – and thus into an interlocked arrangement – is the need for additional liquidity to meet production costs and/or household consumption, as well as the monopsony nature of the paddy market. Data from Kalahandi district in Orissa suggest that access to formal credit is limited in rural areas although there exists a high demand for it, that a high degree of credit rationing by the formal lender occurs, and that poor implementation by the state of minimum support price policy all contribute to the need for informal loans and its attendant interlinkage.     

Bibliography

This Bibliography, comprising items noticed between May endAugust 1962, has been prepared with the co-operation of MissRuth Jonts (International African Institute). Unless otherwisestated, thE place of publication is London.     

JOINT CUSTODY AND THE PRESCHOOL CHILD

A longitudinal study of 25 families, with children aged 14 months—5 years, in joint custody, is reported. Varying motivations that lead divorcing parents to undertake and sustain joint custody are discussed, together with the stresses and gratifications of these arrangements for the parents and children. Findings are that where both parents are motivated primarily by interest in the child, where the parenting is sensitive and where the child is shielded from interparental conflict, young children do well. Such families were not the majority in this study. Significant differences emerged in the adjustment of the 1–3 age group as compared with the 3–5 age group which point to greater difficulties for the 3–5 year-olds.