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Agri Notes

This document discusses different classifications of capital in agriculture and Marx's theory of the circuit of capital. It defines fixed and working capital in agriculture, as well as public and private capital. It also distinguishes between tangible and intangible capital. The theory of the circuit of capital outlines four stages: money is used to purchase commodities and means of production; production occurs using labor; commodities are sold for more money than originally invested as surplus value; and the process repeats through reinvestment. The theory emphasizes how capitalism exploits workers by extracting surplus value.

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21BEC153Subiksha Merin
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17 views

Agri Notes

This document discusses different classifications of capital in agriculture and Marx's theory of the circuit of capital. It defines fixed and working capital in agriculture, as well as public and private capital. It also distinguishes between tangible and intangible capital. The theory of the circuit of capital outlines four stages: money is used to purchase commodities and means of production; production occurs using labor; commodities are sold for more money than originally invested as surplus value; and the process repeats through reinvestment. The theory emphasizes how capitalism exploits workers by extracting surplus value.

Uploaded by

21BEC153Subiksha Merin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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# Classification of capital in agriculture:

1. Fixed capital and Working capital- Fixed capital is that capital which lasts for more
than one year. It includes the investment in farm machines such as tractor, pump-
sets, and other assets like tube wells, land development, farm building, etc. Working
capital refers those capitals which lasts for less than one year such as expenses on
seeds, fertilizers, wages to the workers, etc.
2. Public and private capital- Capital owned by local, state and central governments
such as municipal sewage lines, dams, power projects, roads, canals, warehouse,
market-sheds, etc. are public capital. While any capital owned by private
individuals/companies, such as farm machinery and equipment is termed as private
capital. Both public and private capital is necessary for the development of
agriculture sector.
3. Tangible and non- tangible capital- tangible capital in agriculture refers to productive
physical assets like tractor, irrigation pump-sets, farmhouse buildings, inventories of
inputs, etc. While intangible capital in agriculture refers to investment made in
health, education and training of farm workers. Expenditure on intangible aspects
increases human capital which help the farmers to raise their productivity.

# Theory of circuit of capital:

This theory was outlined by Karl Marx in his work “Capital, Volume I”. It is part of Marx’s
analysis of the capitalist mode of production, focusing on the movement and transformation
of capital within the capitalist system.

The circuit of capital is often expressed in four stages: M-C-M’.

1. Stage 1: M- Money: in this initial stage, capitalists use money (M) to purchase
commodities including raw materials, labour and means of production. The goal is to
invest money in the production process.
2. Stage 2: C- Commodity Production: In this stage, capitalists use the purchased
commodities to produce goods or services. Labor power, machinery, and raw materials are
combined in the production process to create new commodities.
3. Stage 3: M' - Increased Money: After the production process, the goal of the capitalist is to
sell the produced commodities in the market for more money (M') than was originally
invested. This increase in money represents surplus value, which is the difference between the
value of the commodities produced and the value of the labor power used in their production.
4. Stage 4: Repeat the Circuit: The capitalist then takes the increased amount of money (M')
and reinvests it into the production process, repeating the cycle. This process of continuous
reinvestment and accumulation of capital is central to the capitalist system.

It emphasizes the exploitative nature of capitalism, where capitalists aim to extract surplus
value from the labour of workers. The surplus value is realized through the sale of
commodities at a higher value than the cost of production, primarily due to the difference
between the value of labour power and the value of the commodities produced.

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