34 SOCIAL SCIENTIST it has to be used for specific inputs and labour processes, which are fixed beforehand. In addition, the credit recipients are obligated to sell to a specific wholesale buyer at a price which is usually fixed in advance. These additional conditions are introduced because with the small producers there exists the danger of their using up the credit for subsistence goods and not for realizing the aimed for surplus product. Because of a minimum investment, which the producer himself bears additionally, capital is in a position to determine the course of the production process and to dictate the quality criteria since the credits are deducted from the returns from the products. In this form of subordination under capital, market mechanisms, such as the exchange of commodity against money, orientation to market prices and so on are used. However^ this is more apparent than real. Hence the differentiation towards market subsumption is necessary. The exchange which consequently emerges is more a hidden form of wages, comparable to piece-rate wages, since payment takes place through the product. Yet, it is not the producer but the production process for which he is responsible. Hence we speak not of real but of formal subsumption.2 The investment in the formally subsumed production process is subjected to less risks than that under real subsumption. At the same time the entire course is more controllable than in market subsumption. Thus fluctuations in market prices can be used to benefit the credit-givers, while the costs of production mistakes and crop failures are put on the producers. Through credits and contracts, national and international organizations increasingly bring the small producers under formal subsumption. This tendency arises not only because it offers these organizations better control and lower risks, but also because of historical reasons. A central element of tlie modernization theories is the criticism of the so-called lack of market integration ©f the "small farmers". Thus the modernization policy is aimed explicitly at an increased linking of the agricultural sector with market to expand the internal markets. This is especially true of the policy followed in Latin America, which seems always to map development paths which are subsequently adopted by the rest of the Third World. As already mentioned, the generalization of commodity production took place spontaneously because, with the import substitution phases, the destruction of handicraft productions was accelerated. This process was accompanied by agrarian reforms which aim to create national markets. A clear example of this was the early agrarian reform in Mexico which was promoted by a