The same pattern is the FOUNDATION of the modern world!

The beauty of the current system is that because everyone has been told they are free, it is their own fault when they get trapped in a debt cycle.

Thus their own moral sense is the jailor.

Getting a bad rate doesn't mean you also accept it.

Having only cheese to create leverage limits your options

Sounded to me like they didn't even have the milk, and like they're in rural areas of developing nations.

Isn’t this the classic use case for debt? Upfront funding to fund an investment?

Hmmm... It's a two party system right? Borrow and lend. Your example is the borrower's half. The lender [supposedly] assumes risk, and presumes the money could be invested in other profitable ventures (opportunity cost), therefore they charge the borrower interest - I think the paradigm goes something like that... Viola double coincidence of needs, deal accepted.

If the farmer has a shit year, the lender has a variety of options for recourse. Including dispossessing the farmer of land. Historically there were other options like selling one's family. You could castrate yourself and hope to God you'll be accepted into court. Debtor's prison I imagine is also a probable consequence. This is doubly offensive when we consider interest, which can often result in multiples of the initial investment, and that many large scale first world lenders have developed world and the IMF backing them basically indicating they're not allowed default.

Hard to say with the information provided, but it seems typical of the trend.