Agrarian Crises

capitalist crises of agricultural overproduction. They are reflected in the increase of unmarketable reserves of agricultural commodities, the decline of prices paid to farmers for them, the destruction of a portion of agricultural produce for which there is no demand, a decline in the net profit of farmers, the acceleration of the processes of ruin and expropriation of small and middle agricultural producers, the worsening of agrarian overpopulation—the growth of hidden unemployment—and the decline of wages of agricultural workers.

With the development of capitalism, the process of agricultural reproduction became closely bound up with the process of reproduction in industry. Thus, agriculture—just as other branches of the economy—feels the blows of general economic crises. In addition, capitalist agriculture is subject to specifically agrarian crises. They last for decades at a time and exist as an independent phenomenon along with economic crises of overproduction, which are periodic in nature. For example, the agrarian crisis which arose along with the industrial crisis of 1873 and involved Western Europe, Russia, and later the USA lasted until the mid-1890’s, with fluctuations in intensity. The agrarian crises between the world wars and post-World War II were similarly protracted.

Agrarian crises influence the course of the capitalist cycle, deepening and extending industrial crises and depressions, weakening and shortening upsurges and phases of revival. In turn, industrial crises intensify agrarian crises, which, like the industrial ones, are engendered by the basic contradiction of capitalism: the contradiction between the social nature of production and its private appropriation. In the context of the historical backwardness of agriculture, agrarian crises mean the sharpening and explosion of the specific contradiction of reproduction of capital in agriculture—the results of profound displacements in agricultural production and investment. The adjustment of agricultural producers to new conditions of production and the sale of agricultural products takes place over long periods of time.

The monopoly of private property in land gives rise to the necessity of payments of land rent, set in prices for land, rental payments, and interest on mortgages. Structural changes in the conditions of production and of the sale of agricultural produce lead to a “revolution in value,” a considerable decrease in market value, and consequently, in the regulation of prices of agricultural commodities. In this case, a conflict between the new level of value and prices for agricultural goods and the old rent relations arises, not to be soon resolved. During agrarian crises, as prices for agricultural commodities decline, the usual source for the payment of rent—a supplemental profit—disappears.

Under these conditions, rental payments may be realized through further decrease in the wages of agricultural workers or may come at the expense of the average profit and may even involve the failure to repay part of the capital advanced for the enterprise. This leads to a pronounced sharpening of class contradictions and a protracted disruption of the conditions of reproduction in agriculture; it means the prolongation of the agrarian crisis. The decline in the market value of agricultural goods during the long agrarian crisis of the last quarter of the 19th century was basically connected with the extensive development of fertile new rent-free lands. To a considerable degree, this was facilitated by a technological revolution in the means of transport and by technical progress in agriculture. In the world agrarian crisis of the 1920’s and 1930’s and still more in the post-World War II agrarian crisis, the change in the regulating price was tied to the introduction of new production techniques and technology, which sharply lowered the value of agricultural commodities.

The protracted nature of agrarian crises has not been due to rent relations alone but also to such aspects of agricultural production as natural conditions; the high proportion of fixed payments which do not depend on the volume of production; the existence of large-scale agricultural enterprises with low production expenses that can sell their produce at a profit even when prices are considerably depressed; and the existence of a mass of small farmers who cannot have recourse to a curtailment of production. For these reasons, when a crisis lowers prices, the volume of agricultural production is curtailed more slowly than in industry; in many cases, it is not curtailed at all. Another factor makes agrarian crises still more profound and escape from them still more difficult: the intensification, under imperialism, of the various forms of exploitation of agricultural producers by large-scale city capital and by the bourgeois state through control of prices and credit, the trading and middle-man network, and the system of taxation.

With the development of state monopolistic capitalism, the bourgeois states’ anticrisis measures—the goal of which is to limit agricultural production and support a certain level of agricultural prices despite their tendency to fall—have come to be a manifestation of agrarian crises. For example, with the onset of new, protracted agrarian crisis in 1948 in the USA, agrarian legislation was revived. The legislation tried to curtail cultivated area, to support agricultural prices at their previous level, and to subsidize the export of produce at dumping prices, which sharpened the contradictions between capitalist exporting countries.

The policy of maintaining the previously existing level for agricultural prices checked the curtailment of agricultural production and contradicted the measures aimed at limiting it. Large farms, which received the overwhelming share of government money, used it to intensify their agriculture. While the area under cultivation decreased by 11 percent between 1950 and 1965, the yield per hectare rose by 46 percent. The accumulation of surpluses continued. For example, the carry-over wheat supplies of the four main exporters—the USA, Canada, Australia, and Argentina—rose enormously from 5.9 million tons in 1947 to 29.9 million tons in 1953 and 56.4 million tons in 1961. The figure declined to 30.9 million tons—still a high crisis level—only by 1966 as a result of a slight easing of the agrarian crisis.

As the profits of the monopolies which processed agricultural produce and supplied agriculture with the means of production grew enormously, the net profit of farmers in the USA declined from $17.8 billion in 1947 to $14.2 billion in 1965, while the mortgage debt of farmers more than doubled. The expropriation of farmers’ properties and the expulsion of small farmers and renters from the land assumed enormous dimensions. For the period 1954–59 alone, according to the data of agricultural censuses, the number of farms in the USA decreased by 1,072,000. Between 1959 and 1964 another 554,000 farms, that is, 15 percent of all farms, disappeared. State-monopolistic regulation of agriculture facilitates the process of concentration of large-scale capitalist agriculture at the expense of the ruin and proletarianization of the working masses of farmers and peasants.

In the context of state-monopolistic regulation of agriculture, the postwar agrarian crisis has been reflected not so much in the decline in the absolute level of agricultural prices as in their deterioration in comparison with prices for industrial goods—for instance, between 1947 and 1965 the index of farmers’ prices declined from 276 to 246 (1910–14 = 100), while the index of prices paid by farmers for industrial goods over the same period rose from 240 to 320—as well as the increase of unsold reserves of agricultural goods and decline of the net profit of farmers and peasants. With the purchasing power of the masses at a low level, the technical revolution in agricultural production that has taken place in developed capitalist countries, involving a sharp break with the old technical base and the transition to the stage of machine production, engenders a tendency toward protracted relative overproduction in agriculture. In this regard, the crisis of overproduction affecting the world market most hurts the underdeveloped countries whose economy has developed in one direction, to the degree that these countries often depend on the export of a single agricultural crop and are forced to sell it amid the sharp decline of export prices. For example, coffee prices fell from $1,075 per ton in 1951 to $734 in 1966; similarly, cocoa fell from $711 to $440; cotton, from $1,169 to $601. At the same time, a large deficit of basic foodstuffs is evident in many developing countries; the food question becomes extremely acute. This contradiction is insoluble within the limits of capitalism.