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.

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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.

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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).

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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

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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

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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

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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

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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”.

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“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.

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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.

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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.

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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.

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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

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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.

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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

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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

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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.

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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).

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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.

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