Sources of Capital

Throughout the postwar period, most young couples have been strained to purchase the seeds, fertilizers, and biocides needed for a successful farming venture. Many turn to their wealthier neighbors and relatives, or to vegetable traders, to acquire a stake. In the usual arrangement, called "supply," the backer purchases all inputs and the borrower provides all labor with net profits divided equally. A typical supply contract covers only a single crop cycle; the financing of the next planting depends on the success of the first. A single highly profitable harvest can often cover the expenses of the subsequent crop, provided the increase is not set aside for a feast. A low price at harvest, however, can force the laboring couple to negotiate a new supply agreement, and perhaps even to borrow extra money to purchase necessities before the next crop is due.

Caught between price fluctuations and religious obligations, most farmers have fallen deeply into debt. If desperate, they can "mortgage" their land in a salda arrangement. As Davis (1973:60) explains, salda differs from the Western mortgage in that the borrower theoretically loses claim to the land until he or she repays the principal. In actuality, the original holder usually retains control in exchange for a share, often one-fifth, of the harvest. After a stipulated period elapses, the borrowing couple can retain ownership only if they pay off the interest and the principal. If they default, as was not uncommon during the early vegetable-growing years, the land passes permanently to the creditor. Again, the original owners may still cultivate it, but now as outright sharecroppers. A "bankrupt" couple wishing to avoid sharecropping can declare and clear new lands, but this is an expensive, labor-consuming ordeal—and increasingly so as the more accessible lands have been progressively claimed.

As virgin land grew scarce in the 1960s and 1970s, the practice of salda declined; few farmers now wished to risk their properties. Still, during emergencies (often religious), this could be a poor

couple's sole recourse. On a ritual occasion, a parcel might be mortgaged, not for money but for sacrificial livestock.

Most vegetable dealers have long doubled as agricultural input suppliers, advancing fertilizers and biocides to cash-short farmers in exchange for a guaranteed sale of the prospective crop at a discount. Such deals are often extended, since a poor market at harvest time can quickly send the farmer deeper into debt. Dealers find this consistent with their own interests as well; it ensures them a steady supply of vegetables, and they can always recoup some of their losses through the discounts they receive. The farmers also benefit from the perennial refinancing that does not jeopardize their lands. Davis (1973:208, 209) finds this system mutualistic, as it provides both parties with a measure of security in a capricious business, while Russell (1987) counters that it allows the trader to control the relationship to his or her own benefit. Vigorous disputes do arise when a farmer, encumbered with years of outstanding debt, suddenly dies. In this eventuality, the vegetable dealer might try to collect from the heirs, who in turn may argue that these matters should have been settled years earlier and that the dealer deserves a loss for letting the debt persist indefinitely. Such arguments can only be settled on an individual basis in tong tongan deliberations.

Two additional sources of capital emerged in the late 1960s. The first, local credit cooperatives, played a relatively minor role. The second, a government-backed program of bank loans, proved almost revolutionary. The land boom it precipitated, as well as the subsequent vegetable bust, will be discussed in chapter 8.