Social Scientist. v 25, no. 284-285 (Jan-Feb 1997) p. 62.

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Credit and. Marketing of Sugarcane: A Field Study of Two Villages in Western Uttar Pradesh

The aim of this study is to examine sugarcane cultivating peasants from two villages1 in Muzaffarnagar in western Uttar Pradesh, India, in order to investigate the access to credit and markets. This is an attempt to analyse the impact of new technology and the development of capitalist relations in Indian agriculture. On the basis of a differentiated peasantry we have noted what the differential dynamics of commercialisation entails for different section of peasantry and its overall macro-economics consequences (Byres, 1981).

Our hypothesis is that new technology on sugarcane production has differential impact on different classes of peasantry and access to credit and markets which has created an advantageous position for peasants with resources and, therefore, they are in a better position to accumulate and diversify. Our study covers the sources of credit for the sample households and various aspects of marketing of sugarcane. We show that the large landholders (see Appendix) enjoy greater access to formal or institutional credit provided by the government, while the small landholders largely rely on informal credit. We also show that in the Advanced* village, the landlords are a major source of private credit, while in the less-developed' village the shopkeepers are still the major source of credit. The important questions asked, were: From whom do these households obtain informal credit, and what are the mechanisms of their indebtedness? The answers to these questions are fundamentally important for our understanding of the local economy. We also show that the large landholders sell a bigger proportion of their cultivated cane to the mill, while the small peasants sell a smaller proportion to the mill.

It seems important for our analysis to take into account marketing of the cane and how different outlet^ of marketing can bring different returns to the peasants. The greater part of the cane cultivated by the peasants in both the villages studied is sold. There are three major buyers of the cane: sugar mills, sulphurs, and kolhos. Sugar is processed in mills by private capital in the region (Baru, 1990). The

Development and Project Planning Centre, University of Bradford, UK.

Social Scientist, Vol. 25, Nos. 1-2, January-February 1997

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