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Small Farmers, Moneylenders and Trading Activity

Author

Listed:
  • Gangopadhyay, Shubhashis
  • Sengupta, Kunal

Abstract

In this paper, the authors show how an interlinkage between the credit and output markets is an endogenous outcome of credit market imperfections. Also, such interlinkages are Pareto optimal. This is worked out under the assumption of infinite availability of funds with the money lender. If, however, the lender faces a loanable funds constraint, it is not optimal for him to interlink, and he charges monopoly rates of interest. The paper, therefore, endogenously develops various forms of trading and lending activities. Copyright 1987 by Royal Economic Society.

Suggested Citation

  • Gangopadhyay, Shubhashis & Sengupta, Kunal, 1987. "Small Farmers, Moneylenders and Trading Activity," Oxford Economic Papers, Oxford University Press, vol. 39(2), pages 333-342, June.
  • Handle: RePEc:oup:oxecpp:v:39:y:1987:i:2:p:333-42
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    Cited by:

    1. Benfica, Rui M.S., 2007. "Income Poverty Effects of Expansion and Policies in Cash Cropping Economies in Rural Mozambique: An Economy-wide Approach," Food Security Collaborative Working Papers 56070, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    2. Sen, Debapriya, 2011. "A theory of sharecropping: The role of price behavior and imperfect competition," Journal of Economic Behavior & Organization, Elsevier, vol. 80(1), pages 181-199.
    3. Jayne, T.S. & Yamano, Takashi & Nyoro, James, 2004. "Interlinked credit and farm intensification: evidence from Kenya," Agricultural Economics, Blackwell, vol. 31(2-3), pages 209-218, December.
    4. Debapriya Sen, 2005. "Sharecropping, interlinkage, and price variation," Department of Economics Working Papers 05-10, Stony Brook University, Department of Economics.
    5. Bibhas Saha & Tridib Sharma, 2011. "Interest rate discrimination, tenancy and cost sharing," Indian Growth and Development Review, Emerald Group Publishing, vol. 4(2), pages 153-165, September.
    6. Chaudhuri, Sarbajit & Gupta, Manash Ranjan, 1996. "Delayed formal credit, bribing and the informal credit market in agriculture: A theoretical analysis," Journal of Development Economics, Elsevier, vol. 51(2), pages 433-449, December.
    7. Aggarwal, Rimjhim M., 2006. "Resource-Poor Farmers in South India: On the Margins or Frontiers of Globalization?," WIDER Working Paper Series 097, World Institute for Development Economic Research (UNU-WIDER).
    8. Lefèvre, Mélanie & Tharakan, Joe, 2011. "Intermediaries, transport costs and interlinked transactions," CEPR Discussion Papers 8615, C.E.P.R. Discussion Papers.
    9. Sarbajit Chaudhuri, 2000. "Interactions Between Two Informal Sector Lenders and Interest Rate Determination in The Informal Credit Market: A Theoretical Analysis," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 35(2), pages 155-174, July.
    10. Chakrabarty, Debajyoti & Chaudhuri, Ananish, 2001. "Formal and informal sector credit institutions and interlinkage," Journal of Economic Behavior & Organization, Elsevier, vol. 46(3), pages 313-325, November.
    11. Ananish Chaudhuri & Pushkar Maitra, 1997. "Determinants of Land Tenure Contracts; Theory and Evidence from Rural India," Departmental Working Papers 199710, Rutgers University, Department of Economics.
    12. Sarbajit Chaudhuri, 2005. "Interaction Of Formal And Informal Credit Markets In Backward," Game Theory and Information 0511001, EconWPA.
    13. Sarbajit Chaudhuri & Asis Kumar Banerjee, 2005. "Credit-Product Interlinkage, Captive Markets And Trade Liberalization In Agriculture: A Theoretical Analysis In Agriculture: A Theoretical Analysis," Game Theory and Information 0510011, EconWPA.
    14. Sripad Motiram & James A. Robinson, 2010. "Interlinking and Collusion," Review of Development Economics, Wiley Blackwell, vol. 14(2), pages 282-301, May.

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