Living Under Value Chains: The New Distributive Contract and Arguments About Unequal Bargaining Power

Abstract

In the 1980s and 1990s, during the high-water mark of Washington Consensus development, rural sociologists and geographers critical of contract farming described contract as a legal fiction—one that imagines formally equal and voluntary relations between large firms and small farmers and hence that functions purposefully to obscure unequal social relations. Today, however, development planners, who argue for contract farming as an integral part of value chain agriculture, describe unequal bargaining power as a problem for rural development to solve. Our article analyzes how proponents have domesticated what was once a radical critique of contract farming—a phenomenon that we suggest tells of value chain development more broadly. Via a qualitative case study of India, we describe how a range of actors—development planners, state officials, and farmers—now all make arguments about unequal bargaining power and yet hold disparate understandings of what bargaining inequalities mean and what reforms should therefore follow. More specifically, we show how and why common reform proposals—for contract regulation and farmer aggregation—remain constrained by the inequalities they would challenge and thus why farmers themselves speak different possibilities to the problem of unequal bargaining power.

Keywords: Contract farming; India; bargaining power; agrarian change; inequality