Can the barter system work in India today?

Asia Pacific, Economy and Trade, Headlines, Poverty and the Sustainable Development Goals

Economy and Trade

Barter opens avenues for rural women who often do not have access to cash and markets. | Credit: Wikimedia Commons.

Mumbai, India, January 12, 2022 (IPS) When COVID-19 appeared in early 2020, it affected every aspect of people’s lives. For many of the most marginalized groups in society, this has meant losing jobs and no access to education, food, and the market, among other things.

Farmers in rural India were dealing with a strange problem. They had their produce, but since the markets closed during lockdown, there was nowhere to sell. Moreover, many bank branches were closed and ATMs were far away. With travel restrictions, cash was practically out of reach, which limited people’s purchasing power.

Societies had to look for alternative ways to survive. One approach some of them took was to go back to the barter system – a solution they were familiar with. People bartered perishable goods such as vegetables, kirana shops in villages provided necessities in exchange for wheat, and food grains became currency to pay children’s tuition fees. Those without goods offered physical labor in return.

How did the transformation happen?

Communities in rural India have practiced barter for centuries. In states like Assam, where bartering was very common during the epidemic, it has been celebrated in the form of a fair called the gonpil mela for more than five centuries now.

Markets have developed, and there have been many changes in the way business transactions work, but barter still thrives in tight-knit communities in villages. This is because villages as opposed to cities are led by producers as much as consumers and rural communities live on trust.

In the midst of a liquidity crunch and market shutdown during COVID-19, many rural communities in India have used barter to meet their needs – showing us why this form of exchange continues.

The close relationships that people share also allows for easier assembly and mobilization. This was evident during the pandemic when people moved to different COVID-19 safety standards to meet individual and societal needs.

Beauty Dutta Pura, a farmer and owner of a grocery store in Kawimari, Sivasagar District, Assam, says that during the pandemic she not only bartered goods but also services such as getting people to harvest and thresh the rice crop. “In most cases, I just had to call a neighbor for this,” she explains. Dutta Borah adds that merchandise from various wholesalers like hers was moved across regions often in one van from the village. “A car from our village goes through Sivasagar district twice a week. It can be my car or someone else from the district. We collect goods from different local stores and sell them to people simultaneously.”

A resident of Chetti Thirukonam in Ariyalur district of Tamil Nadu, R Raja compares bartering to debit and credit card payments that people use in cities. He calls it “an ancient method of cashless payment” that rural communities are returning to.

New meanings for an old concept

Non-profit organizations working in the rural livelihoods sector of India are aware of this well-oiled barter mechanism. This has allowed them to work with communities for their livelihood – especially in places where income is not enough to survive. However, since barter is a localized form of exchange, organizations have also had to develop an accurate understanding of cultural contexts and history.

When Drishtee, a nonprofit organization that works with rural entrepreneurs, developed a mobile barter app during the pandemic, they chose Sivasagar County to start with. It’s a conscious decision given the region’s history, said the regional head of the non-profit Northeast District, Paragdar Kunwar. Sivasagar was the capital of the Ahom dynasty, which ruled Assam for six centuries. The people here have followed the same ancient practices, including bartering, for a long time now.”

As a result, there was pre-existing societal knowledge waiting to be harvested. Konwar adds, “We told people that you would continue to binimoy protha (Traditions exchange) before explaining the renewed importance of barter during the pandemic.” People in Assam used a mobile app to exchange rice for oil, ducks for chicken eggs and take advantage of the services of tractor-operated rice mills when nearby mills were closed.

For Goonj, a community development nonprofit, bartering is at the heart of their work, a philosophy they adopted even before the pandemic. The names of its initiatives such as Vaapsi (Give Back) and ideas such as “Canvas for Action” – which aims to build sustainable livelihoods – are borrowed from the cultural vocabulary of India. Thus, in times of crisis when Goonj mobilizes people, he does so from a place of desire to revive existing concepts rather than introducing terms that societies may find difficult to understand.

Anshu Gupta, Founding Director at Goonj says, “I believe we are not doing anything new. We value what is already there. Village wisdom has always been appreciated in villages, perhaps not by people like us. We only work with that community knowledge and acknowledge it out”.

What does barter do to communities?

Aside from facilitating local markets during emergencies, bartering also has other benefits for communities. Nonprofits using bartering during the pandemic have found it was particularly popular among low-income families and women in rural India.

In cash-poor areas, bartering helps people meet their needs locally – whether it’s for urgent needs, such as food grains or a used smartphone. In addition, barter is a viable way for local producers to sell their products. These are producers who cannot take advantage of e-commerce platforms or access urban markets, which are driven by large production volumes, standard packaging and homogeneous aesthetics.

People also used barter to work on community issues such as lack of water, sanitation, and infrastructure. Goonj, for example, use barter as a reward for work. Villagers solve local problems themselves, and they are rewarded in the form of goods often carried from the cities to them. “Usually people are waiting for a government scheme to address their problems at the local level,” says Gupta. “At the same time, there are unused materials in the city, and there is demand for them in the villages.”

The nonprofit connects these two. Gupta adds, “Imagine a situation: you give someone a shirt and the next day you say, ‘This is mine,’ he will say, ‘Yes, it is yours.’ But if someone is building a road or working on an aquarium for their village and you give them a shirt as a reward, they will say, ‘May be yours, but I earned it.”

Barter opens avenues for rural women who often do not have access to cash and markets. “Women who earlier only made things for themselves saw barter as a huge opportunity,” says Satian Mishra, co-founder and managing director at Drishtee. They began exchanging handmade products for goods that they or their families wanted.

In Varanasi, women are found bartering hair for goods. Monixa Bordoloi, who is based in Dhekeria Gaon, Sonitpur District, Assam, confirms that she will continue to trade-off as to whether or not there is a pandemic. She says, “Women barter the things they need, not what they already have.”

Can barter replace cash?

Despite the many innovative ways in which people use barter, cash is still essential for many people’s needs. For example, while parents of students in Begusarai district, Bihar, were able to use bartering to educate their children, they were not able to pay their medical bills using the same method.

It is therefore unlikely that overnight the world will switch to a system of social exchange. Most aspects of our lives will continue to be defined by bare coins. There will also be aspirations for people that can only be satisfied with money.

For this we will need jobs, job guarantees, equal opportunities for education, affordable health care, and more. But as many rural societies that use barter assure, it will coexist as a parallel economy that embodies many intangibles of human society, such as trust, goodwill, and resistance.

Debugite Dutta She is Associate Editor of India Development Review

This story was originally published by India Development Review (IDR)

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