The Unequal Exchange Model of Peasantry

Abstract

A common view holds that peasants are slow to appreciate either that there is a shortage of some product for which there is a clear demand or that there is a glut from overproduction. In the short term, peasants may not be quick to adjust to price changes, and the inflexibilities built into the household and labour force and the narrow range of choice imposed by their meagre resources do not permit rapid or drastic changes in strategy. However, in the medium term, macro-economic data suggest that considerable change does occur in the peasant economy. This chapter investigates the hypothesis that, over the couple of decades before 1979, external forces outside the peasant community tended to constrain any economic growth which may have been possible in peasant areas of the Southern Sierra of Peru. The evidence examined is the evolution of average prices received for peasant crops sold at the market. The rate of increase in the cost of key inputs such as artificial fertilizers needed for commercial production is examined in relation to returns from peasant harvests. The changes in peasant crops in this area compared with other regions of Peru are also presented, and the growth and change in the pattern of agricultural credit extended to peasants and other rural producers in the 1960s and 1970s is examined. A final comment is made on the provision of agricultural extension and advisory services.