Identifying investment opportunities for the poor: Evidence from the livestock market in South India

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Abstract
Public action that seeks to alleviate poverty by providing subsidised credit to target groups of borrowers must rely on the ability of those borrowers to identify productive investments. This article presents evidence, from two villages in Southern India, that participants in the Integrated Rural Development Programme have made substantially less productive livestock investments than a control group of privately funded livestock farmers. The main reason appears to be price discrimination against participants in the purchase of livestock, though increasing returns at low levels of production may be partly to blame. The article discusses implications for development policy.

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