Social Scientist. v 8, no. 92 (March 1980) p. 66.


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66 SOCIAL SCIENTIST

consumes. At any given point of time, the content of what wage-labour receives is determined by the terms of trade between wage-labour and wage-goods, that is to say, by movements in the relative price of wage-labour and wage-goods. In common parlance, this is the real wage rate. This real wage rate is only a reflection of the shifting relationship between two market prices, the price of wage-labour and the price of wage-goods. If the price index for wage-labour, namely, money-wages, moves ahead of that for wage-goods, the relative position of the workers improves; if it is the other way round, it declines.

It is in this context that some of the prevalent notions about how to advance the cause of farm workers, sharecroppers and farmers deserve to be re-examined. One of the commonest of such notions concerns the consequences of a shift in the terms of trade between agriculture and industry on the economic conditions of the peasantry. In at least some populist versions, any shift in the terms of trade in favour of agriculture and against industry implies an improvement in the real content of what the agrarian community obtains, and whatever raises the income of the latter community as a whole benefits farm workers loo. From this it is only a short haul to the other proposition that an increase in the prices of farm products across-the-board leads to a rise in the level of income of the peasant community as a whole, and such an improvement could not leave untouched the working peasantry either.

The proposition involves a complete identification between the products of agriculture and the people involved in agriculture, and a complete obliteration of the fact of the heterogeneity of classes within the agrarian community. The terms-of-trade proposition also implicitly assumes that the agrarian community buys only industrial goods, or, at least in the representative basket of wage-goods, the weightage of industrial goods exceeds that of farm goods. Should we not however consider some of the important realities? Despite regional variations, the overwhelming mass of agrarian workers are heavily dependent on market purchases. This is true even in the case of foodgrains, the most important of wage-goods. This too is the reality with respect to a majority of small farmers and sharecroppers; their retained stock of grains is more often than not inadequate to cover their own needs of consumption, and, for the bulk of the supplies, they have to take recourse to the market. Those sections of small farmers and sharecroppers too, whose marketed surplus emerges through the sale of commer-



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