Facilitating the provision of farm credit: the role of interlocking transactions between traders and zamindars in crop marketing systems in Sindh

摘要

Formal credit institutions in Pakistan have largely failed to provide access to farm credit to small and medium-scale landowners, or zamindars. The paper examines interlocked transactions between traders and landowners in the cotton and wheat markets in Sind that facilitate the provision of credit by traders. Data are presented from interviews with: 20 padhys; six input dealerships; 70 growers (60 zamindars and 10 haris); four cotton ginners; three flour millers; and two transport agencies. [No year given]. It is concluded that the case examined provides an example where traders lend to landowners in a segment of the credit market that approximates competitive behaviour, without surplus extraction by traders. Key conditions resulting in this favourable outcome are the existence of both competition for market share and information sharing on borrowers between traders. Whether this outcome is also beneficial for other rural groups who may borrow from landowners, in particular sharecropping tenants,is independent of market relations between landowners and traders and is not determined here.