landini 2011. income and use of money in the peasant economy, contributions to rural development...

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Journal of Alternative Perspectives in the Social Sciences (2011) Vol 3, No 3, 674-703

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Income and Use of Money in the Peasant

Economy: Contributions to Rural DevelopmentPsychology From a Case Study

Fernando Landini, University of Buenos Aires (Argentina) and Universityof La Cuenca del Plata (Argentina)

Abstract: Rural development processes taking place in peasantcommunities constitute an area of interest for community psychology,however, it is clear that this subdiscipline has made limited contributionsto the comprehension of the psychosocial factors involved. This articleconsiders that the peasant economic rationality differs profoundly from

that proposed by market capitalism and that a better comprehension of itsprinciples and priorities would be of vital importance to improve currentinitiatives dedicated to rural development. Thus, an investigation wasconducted in the northeast of Argentina in an effort to understand the

practices and representations tied to the use of money in peasantcommunities. The research arrived to the conclusion that the peasants,due to the fact that they live in an economy where scarcity is the norm,have resources and personal abilities to deal with contexts characterizedby economic restrictions, but no with those of relative abundance.

Keywords: Rural Development; Peasantry; Income; Cash.

1. Introduction

Community psychology undoubtedly has an interest inprocesses of rural development, particularly in the study ofthe development processes of powerless social groups, of

which peasants are a part. Consequently, it is interesting tonote that community psychology has long neglected thestudy of the psychosocial factors that influence ruraldevelopment processes in peasant populations. Thus, notonly are the studies undertaken in this area, from the

perspective of psychology, few and far between but also, themajority of these investigations arise from a framework oftraditional social psychology that tends to focus only on theset of internal factors associated to the low development level


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Income and Use of Money in the Peasant Economy: Contributions to Rural DevelopmentPsychology From a Case Study

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1990). In fact, elements such as the decrease in productionfor self-consumption, the desire to acquire goods andservices such as televisions, cellular phones or electricity, as

well as the loss of relations of reciprocity which allowed forthe exchange of labor power without having to pay wages, oreven the increasing use of agrochemicals, all result in thepeasants growing need to count on available cash in order tomanage production and daily life in general (Bennhold-

Thomsen, 1988; Silvetti & Cceres, 1998).However, it would be a mistake to assume that this

process of commodification necessarily implies that thepeasants are becoming capitalist agents (Chirinos, 2006). Onthe contrary, it is perfectly clear that the peasants way ofunderstanding their context as well as their decision-makingprocess is often based on value systems and forms ofproperty which are very different to those characteristic ofthe hegemonic social system (Mordo, 2001), or on sets ofpriorities in which communal and familial concerns prevailover profits. Consequently, as stated by several authors(Bendini, Tsakoumagkos & Destefano, 1993; Bennhold-

Thomsen, 1988; Cceres, Silvetti, Soto & Rebolledo, 1997), itis possible to argue that, a different kind of rationality andeconomic thinking lay behind the peasants behavior than weare accustomed to in the modern Western world (Henningsen,2001, p. 281).

Furthermore, given the growing importance thatpeasants allocate to money, as well as the fact that theireconomic rationality is profoundly different to that used bycapitalist businessmen, it becomes necessary to understandthe particular way in which these producers manage theirmonetary income. Only through acquiring a betterunderstanding of the logic behind peasants economicdecisions is it possible to generate rural developmentprojects that have a strong impact on said communities.However, as stated by numerous investigators, theparticularities of these strategies as well as of the peasantsrationality are generally not recognized either by theoretical

approaches or by rural extension workers (Carenzo, 2006;Mora Delgado, 2008), this, in part, causing the failure ofnumerous projects and initiatives (Cceres et al., 1997;Cceres, 2003; Chirinos, 2006; Vargas Jimenez, 1996).


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Consequently, it is of utmost importance to clearlycomprehend why these producers do what they do (Cittadiniet al., 2001; Cittadini & Perez, 1996).

Within the field of peasant studies, several authorshave made important contributions to the task ofcomprehending the peasant economic rationality. Amongstother topics, these authors have studied factors such as thepeasants propensity for the use family labor, their attemptsto reduce risk by diversifying their production, as well ascommon tendency to perceive farming activities as a uniqueprocess and not divided into specific areas. However, incontrast to the ample attention paid to these factors, littlehas been dedicated to understanding how peasants managetheir income and assign meaning to the way they utilize it,even when money has acquired a growing importance intheir lives. Consequently, increasing our knowledge of the

ways in which peasants use cash would be highly important.The theoretical framework of this paper is based on two linesof though. The first is related to community psychology, asubdiscipline that studies psychosocial phenomena on acommunity level, taking into account cultural and socialcontext and looking to favor processes of social changetaking place in the most underprivileged sectors of society(Montero, 2004), in this case rural development projects inpeasant communities. The second line of thought emergesfrom the need to comprehend peasant rationality in relationto how they use and manage their money, an end towards

which the ideas of social constructionism are used (e.g. Burr,1999; Ibez, 2001; Potter, 1998), an approach thatconsiders realityand knowledgenot as mere reflections ofthe world but as human constructions. Thus, I adopt atheoretical framework that is characteristic of qualitativeinvestigations, which seek to describe and comprehend thecategories and social symbols through which peoplecomprehend themselves, their behavior and theintersubjective world in which they live. Additionally, thisinvestigation utilizes the concept of rationality, defined asthe collection of principles, rules and subjacent values thatguide the actions of different groups or social actors and arederived from their worldviews (Landini, 2010).


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the data collected. The investigation was carried out in 4phases. The first rapprochement, which focused onunspecified participant observation, allowed for the

beginning of an understanding of both the life and theproductive practices of the community, which at first wereunknown to the investigator. Next, an exploratory phase wasimplemented, consisting of participant observation and 10interviews (5 to peasants and 5 to other social actors), all of

which allowed the investigator to identify the thematic areasto be explored in subsequent interviews (the six areas ofstudy previously mentioned) as well as to design theinterview protocols to be utilized in future fieldwork. Adescriptive period followed, during which 72 interviews wereconducted so as to further explore the most significantelements of each of the areas of study aforementioned.Finally, a period of systematization was undertaken, wherethe analysis and final systematization of the data collected

was carried out.

4. Needs, Income and Subsistence StrategiesIn order to achieve subsistence or even improve their

living conditions, peasants carry out different activities,utilizing available resources such as: family labor, the land,means for production, local know-how, social networking,

off-farm incomes, etc. Through these practices, they aim toobtain a global income that will minimally allow them tocover their expenses. The following section of the paper willfocus on analyzing the families needs so as to then explorehow these interact with the sources of income available tothese communities.

4.1 The families needs and the production process

The peasant families main concern is that of satisfyingtheir nutritional needs, particularly meat and nonperishableitems like flour, oil, sugar and fat. Furthermore, they need toobtain clothing and footwear as well as cover expenditures

related to their childrens schooling. Additionally, thesefamilies needs include basic expenditures related to healthcare coverage.

On the other hand, the peasants capacity for


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production depends upon their capability to withstandseveral factors. First, they have to have access to land, eitherowned by them or rented. Secondly, they need either draftanimals or tractors to carry out processes of soil preparation.Furthermore, seeds are key factors towards obtaining a goodharvest. After the soil is prepared, peasants must sow andfertilize the land (generally with urea), weed, applyinsecticides and, finally, harvest.

4.2 Family labor and production for self-consumption

At the heart of the subsistence strategies employed bypeasants is the use of family labor (Bendini et al., 1993). For

this reason, members of the domestic unit carry out themajority of the production-related tasks mentioned above.Additional workforce is hired on a need-only basis (forexample during the cotton harvest) and, in any case, only forthe areas dedicated to commercial farming (Cceres, 2003).Many peasants are able to maintain a level of food self-sufficiency by covering an ample percentage of their needsthrough production for self-consumption, particularly ofcrops such as cassava and maize, but also beans, pumpkin,melon, and other vegetables. Furthermore, products such aspoultry (a source of meat and eggs), sheep, pigs and cattle(for milk) can also be included in the production for self-

consumption category.Regardless of the importance of the practices (such asthe use of family labor and production for self-consumption)employed by the peasants of Misin Tacaagl, attention stillneeds to be paid to the limitations placed on the actual scopeand reach of these practices. Given that its a commonstrategy for subsistence to take on odd-jobs to generate off-farm income, as well as the fact that the make-up of manypeasant families contains different types of family structures,family members are not always available as a source of labor(Carenzo, 2006). Furthermore, certain tasks like soilpreparation are dependent on the availability of specific tools

and draft animals (or tractors), which means that thepeasants cant always execute them in an independentmanner. Finally, the decrease in the production for self-consumption in the communities situated within the areastudied is another important factor to consider.


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4.3 Income in small amounts and municipalassistanceOutside of family labor and production for self-

consumption, other areas of expenditures are: a portion ofbasic food needs, costs related to their childrens education,soil preparation (if they do not have ox), labor force formarket production of crops and, finally, health care.Furthermore, peasants also have to cover the expendituresneeded to improve their productive capacity or livingconditions and can do so only if they were able to acquiresufficient surplus during the harvest season. What follows isan analysis of how the peasants obtain the income to cover

their expenses as well as the specific end to which eachsource of income is destined.

Since the mid-1980s the municipal government hasbeen implementing a policy of providing small farmers withthe machinery and tractors necessary for soil preparation(an aid which does not include the diesel needed to carry outthe work), a much more affordable option than contractingmachinery from a private owner. Additionally, themunicipality also provides enough seeds to cultivate up tothree hectares of cotton.

Peasants also have access to a variety of sources of off-farm income. Among them are day labor, welfare benefits or

non-contributory pensions and remittances sent by familymembers who have emigrated. Small farmers from the areaalso engage in varied forms of odd jobbing, predominantlyhoeing and harvesting.

There are many reasons why peasants would prefer tokeep on working their land rather than leave in search of off-farm income. However, given the fact that the harvestgenerates income only in two moments of the year (Novemberand April-May-June) and that crops harvested for self-consumption do not cover the nutritional needs of the home,the peasants must engage in alternative activities to procureincome to cover their familys basic necessities.

Consequently, a sort of competition arises between theamount of work needed for producing farm income and theneed to maintain a steady influx of minimum income thatleads the peasants to prioritize the source of this minimum


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income over their own farm production. However, since thedemand for odd-jobbing is cyclical, sporadic and erratic, itdoesnt provide a real alternative to farm income. The incomegenerated through odd-jobbing is used to various ends, butcan be organized into three main areas of potentialpurchase: foodstuffs, supplies for production (seeds andinsecticides) and soil preparation.

An alternative type of off-farm income is thatstemming from social welfare benefits (monthly assistancefor families below the line of poverty) and non-contributorypensions. Amongst those interviewed, the general consensus

was that, although these benefits were not sufficient as asingle source of subsistence, they were of particularimportance. This is due to the fact that this assistancediminishes the need to look for odd-jobbing opportunities,thus allowing peasants to dedicate themselves fully to farmactivities. In a manner similar to the income generated from

working as day laborers, the income obtained from socialbenefits and retirement plans are destined primarily towardsthe purchase of foodstuffs. However, in the case of the latter,some peasants take advantage of this income, using it as ameans for purchasing certain products in bulk (i.e.: 25 kilo

bags of flour, 5 liters of oil, etc.) Furthermore, small farmersalso use this income to pay for soil preparation and hoers.

Another source of off-farm income is that which thepeasants receive in the form of remittances, sent by childrenor siblings who have emigrated to big cities. However, despitethe fact that this is not a common form of income for thepeasants who live in the region, it is highly valued because itis essential when dealing with unpredictable occurrences, asin the case of health care problems. Even in the situations

where this type of assistance is not received regularly, themere existence of these bonds represents a possible sourceof support to which they can turn in times of need.Retail sales of farm products such as cassava, beans,

vegetables, eggs and chicken is another source of income.Nevertheless, the peasants are only able to retail these

products when their production exceeds the amounts neededfor self-consumption. This type of income tends to beallocated towards covering daily costs, for example schoolingand purchase of foodstuffs, all expenses for which cash is


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needed. Several interviewees highlighted the importance ofthis type of income, particularly due to the fact that itbecomes a farm income alternative to obtain small amountsof money, which, in other cases, would come only from off-farm jobs.

4.4 Availability and use of credit

Credit is another alternative used to address the needsof the peasants family unit. Constantly mentioned bypeasants throughout the interviews was the desire to have attheir disposal enough credit to finance appropriate soilpreparation, purchase good seeds and other raw materials,

having enough money for family consumption and thusallowing them to dedicate themselves full-time to their farmby freeing them from engaging in day labor to make endsmeet. However, due to a scarcity of available loans, the smallfarmers can only dedicate time to his farm when his financialsituation allows for it, often having to reduce potentialproduction in order to make enough money to provide for hisfamily. While in the past peasants used to have access to

bank credit, nowadays they must go through the productionprocess counting only on their own resources.

Regardless of this situation, there are still some otherforms of credit available to peasants, two of which are worth

mentioning. Firstly, intermediaries and landlords offer seedand other raw material advances, which are then discountedfrom the sale of peasants production, once they haveharvested. Secondly, peasants can count on foodstuffadvances from grocery store owners with which they haveestablished a certain level of trust. However, nowadays,neither the amount of foodstuffs that they can obtainthrough this type of arrangement, nor the period of time thatthey have to pay the owner back, is comparable to what itused to be in the past.

When interviewed, many of the peasants insisted thatthey wished they could count on enough credit to be able to

concentrate exclusively on producing farm income. What isinteresting about this insistence is the belief that they couldresolve most of their problems were they to receive sufficientcredit, as if their problems were primarily of a financialnature. If this were the case, the problem could be solved by


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providing them with a one-time subsidy or by selling cattle inorder to finance the accumulation of working capital.However, experience shows that, in both situations, peasantstend to fall back into the same situation of financialconstraints. Consequently, one could deduce that theproblem seems to be related more to how peasants managetheir cash money rather than the lack of working capital.

Within the peasants economic logic, it seems as thoughcredit not only holds a financial function but also serves as aguide towards an efficient use of their income. To be moreprecise, the existence of credit (generally given specifically forpurchasing seeds or food) allows them to spend money onspecific products rather than run the risk of it being usedtowards ends perceived by them as inadequate orunprofitable.

Furthermore, a loan can make unperceivable, in asubjective sense, the cost towards which the funds are beingused. For example, this occurs in the case of seed advances;in this case, the peasants pay off the advance by means ofdeducting it from the total amount of money paid when theysell their harvest. In this way, there is no physical exchangeof money taking place, but merely a deduction from a finalsum of money. As one interviewee stated, this doesnt harmyou because you dont feel the expense, since the actualproduction pays for it1. In the case of the grocery store,peasants tend to settle their bills during the period of time

when they are selling their produce, which is a time ofrelative abundance. In this way, instead of having to makethese payments during a moment of the year characterized

by scarcity (during the period when fields are sowed andcultivated) credits allow them to postpone these payments toa moment of the year characterized by relative abundance, inother words, harvest time. This deferred timing creates theimpression that a certain expense carries with it lessweight, making the process of covering costs somehowlighter.

A small farmer, who recently moved to the region, told

of how a medium producer had lost a significant amount of

1All the peasants quotes are translated from textual phrases taken from

recorded interviews.


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his cattle because he had not invested in building a well. Hesaid, I realized that these people [local farmers] dontconsider the death of a cow as money lost but they doconsider as lost the cash that they have in their pockets andhave to spend. This comment is key to arriving at anexplanation for the way in which credit works in this society(as well as money in general). As previously mentioned,

when a loan is paid off in the moment that the sale ofproduction takes place, then its status as and expenditure issomehow diluted. Now, it can be added that, for thesepeasants, the status of potentialmoney (for example in thecase of cattle owned) is not considered to be equivalent tothat of actual money (cash), the latter being the only onegiven the status of real money. Consequently, spending1,000 pesos to save an animal that can cost 1,200 is notconsidered to be a worthwhile expenditure because cash isthought of as having more value than a good that could bepriced at the same rate. In this way, the logic that underliesthe peasants conception of loans comes full-circle. This is

because, in all of these cases, credit appears to dilute, toevaporate, the expense to which it is applied. This is madepossible by the use of the following mechanisms: the absenceof an actual moment where money is exchanged, the act ofpostponing a payment from taking place in a period of scarcityto a period of relative abundance and, finally, the act oftransforming its amount into mere potential money,something which, in a sense, loses the consistency and valuegiven to cash.

4.5 Income from the sale of cotton and vegetables

The peasants main source of income comes from thewholesale of products geared towards the market,particularly cotton and vegetables. These are of utmostimportance to them, due to the fact that the improvement ofthe welfare of their families depends on the sale of theseproducts, which are the only ones that allow peasants to buy

home appliances or farming tools, in contrast to other formsof obtaining income. In general, this income could bethought of as destined to cover two main areas ofexpenditures: those related to subsistence and those gearedtowards raising their quality of life and increasing their


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productive capacity (accumulation). In terms of expenditureslinked to subsistence, of particular importance are thepurchase of foodstuffs and materials for production as wellas paying off of loans to grocery stores and landlords. It is ofinterest to mention that all of these examples providedifferent ways in which the peasants maintain their currentlifestyles and guarantee future income, but none of themprovide a means towards actually accumulating capital.

When income levels only allow peasants to acquire thosegoods mentioned above, the peasants consider they cameout even because they were not able to make additionalinvestments, they were unable to improve in any way. Undersome circumstances, however, when the price of produce isgood, surplus is generated and the peasants can then invest;in other words, they can go the extra mile to improve theirliving conditions and their production capacity.

Any surplus accumulated is destined towards threebasic areas: the purchase of cattle, improvements made tothe home and the acquisition of household appliances andtools. Many authors have already mentioned the use ofpurchasing of cattle as insurance against inflation and as a

way to reduce risk (due to the fact that it can be sold at anymoment) as well as its function as a strategy forcapitalization and investment (Cceres, 2006; Patio, 2000;Stage & Rekve, 1998; Waithaka; Thornton, Herrero &Shepherd, 2006). The peasants idea of improvementsto thehomeprimarily refers to building brick houses instead of thetraditional ones, made of palm wood and adobe. In the caseof the consumption of household items and utilities, theseinclude adding electricity to the home, buying freezers,

washing machines and televisions. Finally, some peasantsmention using these funds to purchase new tools forproduction such as ox, plows, or maize-shelling machines. Inany case, this option tends to come up much moreinfrequently in the interviews than the ones mentionedabove.

Overall, there appear to exist multiple uses for theincome generated through the wholesale of cotton and

vegetables, however, in every case, expenditures related tosocial and material reproduction of life are prioritized overthose tied to capitalization. Even in cases where some


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income is used towards capitalization, this is done for theobjective of securing some sort of insurance (as in the case ofpurchasing cattle) and improving living conditions, all of thisin detriment to other types of expenditures that wouldincrease their productive capacity.

4.6 Relationships between costs and income

A series of reflections can be obtained from theprevious section. It is interesting to highlight that, for

various reasons, some expenses appear to be associatedprimarily to certain sources of income and not to others. Atfirst glance, one can observe that the familys work is

dedicated exclusively to those parts of the productive processthat do not necessarily call for payments in cash such as soilpreparation using ox, and hoeing and harvesting.

Additionally, the family members work generates foodstuffsby means of production for self-consumption. Clearly,municipal assistance supplements family labor because itprovides many needed goods and services that can only beobtained by actually purchasing them with money: soilpreparation using tractors and cotton seeds.

The basic nutritional needs of the family are met, asidefrom by production for self-consumption, through differentsources of income such as: odd-jobbing, social or retirement

plans, retail sales, grocery store credit and wholesale ofproduce. What is interesting about these sources of incomeis the specific way in which each one is geared towards aparticular end. Income generated from the wholesales isused towards the purchase of merchandise in bulk, generallyenough for a period of a month or more. Welfare andretirement plans are generally used towards buying largeamounts of a particular product, but their purchase isdetermined by a monthly limit. Income generated fromcasual labor opportunities, like retailing, is only enough fordaily, or, at most, weekly purchases of products needed.

The different areas of production are primarily carried out by

family labor, with the exception of soil preparation, which isusually a service provided for by the municipality or anexternal hire. The funds allocated towards soil preparationand the purchase of seed are usually generated by the

wholesales of the harvest, although when these funds are


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count on this money or were able to obtain it through loans,they would hire a tractor or purchase high yield seed. Nowthen, since many peasants have ox to prepare the land andthe government provides them with sufficient amounts ofseeds, is it really profitable for them to hire a tractor for soilpreparation or to buy better quality seed? Incredibly enough,the peasants do not seem to ask themselves thisfundamental question; on the contrary, they tend to makethese decisions based on a firm belief that this is the bestand most profitable use for their money, as if any productionexpense were to necessarily introduce an added value greaterthan its cost.

It becomes clear, then, that here, as in many othercircumstances, if there is available cash, it tends to be spentrather than saved, without any economic evaluation of thepotential benefits. This situation stands in stark contrast toa common idea held by various authors that peasants seekto minimize expenses as well as investment in production (e.g. Cittadini, 1995; Cittadini & Prez, 1996). On the contrary,in this case, one could use the term liquid money todescribe a process in which money made available in periodsof relative abundance is spent in a rather thoughtlessmanner, slipping away quite easily, rather than being usedtowards a strategy of minimal spending. Given itsimportance, more attention will be paid to this point furtheron in this paper.

5. Surplus, Accumulation and Use of Money

5.1 Evaluation of the economic outcome of thefarming

When peasants evaluate the economic results of theirfarming of vegetables or cotton, they can arrive at thefollowing conclusions: that they won, tied or lost. When apeasant states that his product provided profit, it means thathis income was substantially higher than the expenses he

paid off with cash throughout the season. In practical terms,this means that the money he received from his landlord,once he deducted any advances he may have obtained, stillleaves enough income left over to allow him to spend towards


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objective is to gain enough farm income to allow for theirsubsistence and, additionally, to improve their livingconditions. Unlike businessman, peasants evaluate only

whether they can subsist or improve; consequently, keepinga precise calculation of his expenses, his income or net

benefits is neither a determining factor nor a main source ofconcern.

5.2 Good use of money and the possibilities ofaccumulation

Evidently, a level of income that is able to comfortablycover the cost of a familys needs (as determined by a

particular culture) is a necessary condition towardsgenerating capitalization processes. However, given thatmany psychosocial processes mediate this potentiality, thisis a necessary but not sufficient condition. Consequently, itis of interest to explore those factors, identified by thisinvestigation, that are related to accumulation processes.

When speaking about how to make their money last,or even how to progress, the interviewees highlight the factthat it is necessary to know how to administer ones income,

without being wasteful. In this manner, they distinguishthree types of expenditures. First are those destined towardsproviding food and clothes for their families. The second type

is investments, which include the purchase of cattle,renovations made to their farms or homes and the purchaseof tools and household appliances. Finally, a third type ofexpense is that which is rejected on the basis of it being

wasteful, which includes the purchase of knickknacks, inother words, money spent on alcohol or gambling, as well asthe purchase of what is considered to be a luxurygood.

Excluding those expenses used for materialsubsistence (nourishment and clothing), it is interesting tocompare the remaining two categories so as to comprehendtheir particularities. In the case of the investments, one canobserve that they are expenditures geared towards those

goods that have long-term permanence and offer some sortof benefit to those who possess them (for example:improvements made to the home as well as the purchase ofcattle and production tools). On the contrary, all the imagesutilized to describe those expenses that are rejected, speak of


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short-lived experiences, or unnecessary goods that areconsumed without leaving lasting benefits. In this manner,one can comprehend the depth of the comparison. From theperspective of the interviewees, in order to get ahead it

becomes necessary to administer and conduct a proper useof money, using their income towards ends that can have alasting effect on their families rather than spending onunnecessary purchases that run out in an inconsequentialmanner. Summarizing, there are three categories ofexpenditures: superfluous expenses, which are fleeting andthus undesired, those that are destined towards coveringfamilies basic needs, which are necessary but do notgenerate progress for the home and, finally, investmentexpenditures, which are the most valued given thatreallocate income from current consumption to durablegoods that will allow to improve living conditions in thefuture in a sustainable way.

Given the comments made by different rural extensionworkers concerning the peasants interest in receivingconcentrated incomes, rather than dispersed over time, as

well as the preference, indicated by Waithakaet al. (2006), infarming crops that produce income in the form of onepayment, interviewees were asked if it was better to sell allthe production at once or whether it should be fractioned(meaning retailed). Despite the fact that the question wasperceived as a strange one, 18 out of 20 intervieweesanswered it, 14 (which is 78%) preferring to sell all together,

versus 4 who chose to do this separately. In order tounderstand the reach of this desire to concentrate theamounts of money received, a new question was formulatedto find out if they preferred a government subsidy of 1,500pesos in the form of a single payment or if it was better toreceive a 2,000 pesos subsidy, in the form of 4 monthlypayments of 500 pesos (in other words, paid in separateincrements). Although this was not mentioned during theinterviews, the implicit monthly interest rate of thisoperation was of 23% and the annual interest rate was1,243% (assuming a monthly capitalization and that the firstpayment of 500 pesos would be made in the same momentthat they would receive the single payment). In this case, 17of those interviewed answered the question, 11 (65%)


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preferring the payment of 1,500 pesos and 6 preferring the2,000 pesos made in the form of several payments.Interestingly enough, none of those who preferred thesubsidy to be paid in increments stated the difference inamount as being the reason for their decision.

Two conclusions can be deduced from the informationobtained. The first is that peasants tend to not take intoconsideration the interest rate implicit in this type ofoperations, because if it had been taken into account, theiranswers would have been different. Secondly, it seems thatthe peasants prefer to receive income in the form of a singlepayment rather than fractioned into parts, for reasons that

will be clarified in the following section. Inversely, it wasobserved on different occasions, that peasants preferred topay back their debts in the form of installments rather thanin a single payment, even in cases of high interest rates.

The preference for income that comes in oneconcentrated amount (even in the face of possibilities toobtain significantly larger amounts if they accepted to receiveit in the form of installments), once again brings up the issueof the use of money and the possibilities for accumulation.Several interviewees highlighted that, when faced with thealternative to receive either their income all together or ininstallments, their choice depended on the circumstancesand objectives of each situation. Consequently, theypreferred income in installments when the objective was tocover their familys basic needs, so as to ensure adequateand continuous nourishment. However, in order to make aninvestment such as the purchase of a freezer, for example,they preferred to receive the amount in one payment. Those

who chose the income in the form of installments tended tohighlight that, in this way, they were going to administertheir money more efficiently, versus if they were to receive itall together. In the case of the latter, they stated, they couldend up spending it on an unspecified end, which would leadthem to lose it rather than invest in something that could beuseful down the line. As stated by one interviewee, becausesometimes you grab all the money together and then also,because you have a lot, you tend to misspend it.

In the case of those who preferred the money in onepayment, they insisted in an almost unanimous manner


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that when received in one large amount it could be puttowards investing in improvements for their homes or usedtowards the purchase of cattle or soil preparation. If they

were to opt for the installments, on the other hand, theycould end up not having enough to achieve the desiredoperation. As one interviewee stated, it is better to charge allin one payment so you can do something, if not, little by littleyou do nothing. Why is it that in this case profit becomesinvisible, even if they are dealing with equal amounts ofmoney?

The interviewees were then asked if they could savesome money every month so as to then have a largeramount, to which they responded that it was impossible tosave because, when there is need you cant save anything.In this sense, opting to receive the full payment at once hasthe objective of trying to capitalize and progress with themoney obtained, as well as looking to avoid spending thesubsidy superfluously. Consequently, unnecessary spendingis avoided if the money is received in the form of oneconcentrated payment and is invested after receiving thepayment. This is because money, when one has it, seems tospenditself.

5.3 Liquid money

The peasants interviewed argued that only if theyreceive money in the form of one concentrated payment arethey then able to invest this sum. This is because theyconsider it to be extremely difficult to save money if theyreceive it in small sums, over a period of time. Obviously,this finding is not exclusive of peasants. In fact, people whoare not very well off usually do not find it easy to save.However, the particularities of the peasants situation,characterized by different types of income, by the constantneed to invest in order to maintain a functioning level ofproduction, as well as the implications all of this has onrural development processes, make it so that it would be

advisable to further explore how this process functions inpeasant economies and how they make sense of it.The peasants interviewed gave diverse reasons to

explain why it is difficult for them to save money obtained insmall amounts. Some of them claimed that this is due to not


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knowing what to invest their money in and, consequently,end up spending it little by little superfluously withoutmaximizing their return. Other peasants stated that whenthey had cash, they wanted to spend it on anything they sawsince, money is kind of a temptation. Nonetheless, themajority of those interviewed highlighted the fact that they

were not able to save cash because different needs orproblems came up constantly, requiring that their money bespent to resolve these issues, for example the need to: fix a

bicycle, buy a spare part needed for a tool or purchaseschool supplies. In summary, the problem lies in that, whenmoney is had, it gets spent on daily expenses. Consequently,the peasants prefer to receive their payments at one time, alltogether, so as to then be able to spend it on something thatallows for some form of permanent improvement.

However, an important question arises: how do thepeasants satisfy their needs when they have already spentall of their income on some small investment, such as buyingtools or bricks for their house? The first answer to thisquestion states that in the case of not having the moneyneeded, they must simply live with the need because, if Idont have the money I will have to put up with it.Nevertheless, there is a second answer to this problem whichfocuses on the fact that something, whatever that may be,needs to be done in order to come up with that money. Thissomething can include asking a landlord or politician forhelp, taking on odd-jobs, or, in the worst-case scenario,selling something, like cattle, for example. From anoutsiders perspective, one could think that, when faced withthe risk of not having enough money to survive, it becomesunadvisable to spend on the small investments mentionedabove. However, from the peasants perspective, based ontheir life experience, this is the only way that allows them tocapitalize and achieve long-term improvements for theirfamilies. This is because the peasants interviewed seem tohave the resources and skills to face situations characterized

by scarcity, while they lack those needed to operatesatisfactorily in contexts of relative abundance, which meansperiods of time where they have more money than thatneeded merely for subsistence.

Two arguments developed in this paper led to the


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conclusion that money in the form of cash is considered tobe something that slips through ones fingers, that is losteasily and cannot be retained, a situation which can besummarized by using the terms that are also title of thissection: liquid money. As mentioned previously, in-kindcredit (in the form of seed or food, for example) tends to allowfor better management of their resources and helps them toavoid spending their money in an unproductive manner.

Thus, the peasants avoid having to manage cash and dealonly with the good and the compromise to pay, neither of

which is subject to the liquidity that characterizes cash,which has a tendency towards unnecessary expenses.Similarly, it was previously shown how peasants, when theyhad sufficient funds, tended to buy better seeds or hire soilpreparation services, when they could do it themselves withtheir own ox, all of this without conducting a real evaluationof the potential benefit to be received from this investment.Both cases described in this paragraph are particularlyinteresting because they are evidence of the peasantstendency to use money when it is available, not only for theirconsumption but for small investments too, withoutconsidering the possibility of saving it.

This liquid property of money can be helpful whentrying to understand a series of factors. Firstly, and in thiscontext, it makes perfect sense to save in the form of goodsrather than in cash, be it either through the purchase ofcattle, construction materials for their homes or even seeds.It is in this manner that the peasants can engage in a formof saving, by solidifying their savings into tangible goods.Likewise, this also helps to comprehend the farming ofcotton and vegetables as a capitalization and savingsstrategy, being that it allows for the process of investingresources (such as money and family labor) in small butsteady amounts. In this way, by the seasons end, thepeasants accumulate in one payment everything theycontributed to in separate instances, which favorscapitalization processes.

Thirdly, the existence of this conceptualization ofmoney as liquid is also useful when trying to explain(although tangentially) why peasants prefer to improve theirliving conditions instead of looking to expand their


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practice that provides income in small amounts throughoutthe entire year, it is a strategy that cannot easily replacecotton and vegetable production, which in turn providesthem with a concentrated income, thus stimulatingcapitalization processes.

Another interesting contribution is the finding,description and analysis of the peasants preference forreceiving their income in the form of one payment instead ofin the form of installments paid over a period time, which isa result of the common perception that money dilutesitselfif obtained in small increments. The importance of thiscontribution lies in that there are important practicalconsequences resulting from this way of conceptualizingmoney. This is because this conclusion helps to comprehenda wide range of different forms of conduct and strategiesemployed by peasants, including how difficult it is for themto save money, their tendency towards quick spendingfollowing the reception of a sum of cash from an importantsale or, finally, the desire to continue to farm certain cropsthat allow them to obtain payments in large amounts whenthey are not necessarily the most profitable.

Furthermore, the fact that money in the form of cashpossesses certain characteristics that makes the peasantsperceive it as being liquid results in the importantconclusion that these small farmers have the knowledge, themethodologies and the necessary connections to deal withcontexts of scarcity in terms of material and monetaryresources, but not those needed to deal with situationscharacterized by abundance. Consequently, when the needarises to retain income in the form of cash rather than inconcrete goods, they are unable to appeal to a large part oftheir know-how and instead end up spending it in a mannerthat is not the most desirable from their point of view. In this

way, the role that in-kind finance fulfills in the peasantseconomy becomes clear, being that this type of credit helpsthem to ensure that their money is spent efficiently.

Many of these conclusions can become useful whendesigning and executing rural development projects. One ofthe findings worth highlighting is the importance ofsupporting concentrated forms of income in order toencourage capitalization processes. Furthermore, it would be


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useful to think about developing in-kind credit related to theseasonal distribution of the peasants income, being that themanagement of money is a particularly problematic issue forthem. Finally, the fact that these peasants do not intuitivelyconceive their production activity as a business makes itadvisable for agents of development to try to avoid imposingon them their own economic logic. Instead, developmentinitiatives should try to come up with alternatives that arecoherent with the peasants view of their work and economy.In conclusion, it becomes clear that a better comprehensionof peasants economic rationality constitutes an invaluabletool towards generating intervention strategies gearedtowards real rural development processes.

In conclusion, it is important to highlight theimportant role that psychology, as a social science, has toplay in the study of the psychosocial factors and processesthat influence initiatives for rural development carried out inpeasant communities. However, it is important that thisscience do so from a perspective that recognizes that socialphenomena are determined by multiple factors, thusavoiding a reductionism that explains all social inequalitiesthrough psychological factors and thus analyzes them from asingle point of view. In any case, the specifics of how the fieldof psychology should contribute to this area of study are stillunder discussion due to the fact that the possibilities are

varied, as are the approaches and the theoretical frameworksavailable. This article utilized an exploratory-descriptiveapproach, one with predominantly ethnographic content,

which was geared towards the reconstruction of the practicesand representations linked to the use and management ofmoney in peasant economies. This, in turn, generateddifferent conclusions that are of interest to this area ofstudy, despite the fact that they do not differ greatly from thetype of research that could be carried out by other socialsciences. In any case, the field of community psychologyshould not avoid a potential area of study that is composedof the psychosocial factors linked to rural developmentprocesses in peasant communities, but instead recognize itas an opportunity and even a challenge.


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