Markets in Palanpur
Having described the village in Chapter 2 and discussed some general theoretical issues concerning the economics of agriculture and development in Chapter 3, we are ready to embark upon our empirical investigations from the data that we collected in Palanpur. We shall attempt to formulate hypotheses from the theoretical models which can be confronted with our data. These exercises will be the subject matter of this chapter and of Chapters 5, 6, 7, and 8. We shall here consider in detail the operation of the major markets of Palanpur and we shall be discussing various hypotheses about these markets. A knowledge of how these operate will be important for our design of models later on and for the assessment of many of our findings.
It must be understood at the outset that we are using the term 'market' in a general, imprecise, and all-embracing sense. We intend to refer simply to the conditions under which exchange of the services of factors take place and the arrangements in force for organizing that exchange. There is no implication that the market is in any sense a formal one with a specific location; still less is there any suggestion that the market is perfect or competitive or has any other feature of markets to be found elsewhere in the world (or in the pages of economics textbooks). Indeed in one case the important thing that we shall have to describe and discuss is the near absence of a market where one might perhaps expect to find one.
In § 4.1 we examine the labour market in Palanpur. The hiring of wage labour to undertake agricultural work is widespread although there are no labour households in the village which derive all their income from agricultural labour. We shall look at the seasonal variation in the demand for labour, how easily it is obtainable, and the variation in wage rates from times of high demand to times of low demand. We shall also discuss the question of whether the wage rate can be considered as a useful measure of the opportunity cost of family labour.
In § 4.2 we shall examine the market for the services of bullocks where, as was remarked already in Chapter 2, we shall find that there is no market in the sense that the services of bullocks are not usually exchanged for cash. This fact will be of importance later on, particularly when we come to examine, in Chapter 5, the farmer's decision to lease-in land or lease it out. We shall examine some possible explanations for the absence of active trading in what might be thought to be an obvious and useful market. Since bullocks are essential for cultivation and as one cannot reliably purchase the use of bullocks for cash it might seem that a man cannot cultivate land unless he owns bullocks. However there are a few farmers in Palanpur who are cultivating (usually small) parcels of land without the benefit of owning bullocks. This they achieve by exchange of services for the use of bullocks, in most cases with relatives. So, for example, a man may work on his brother's land in exchange for the use of his brother's