Ricardo continues,
““I must again observe, that the rate of profits would fall much more rapidly … for the value of the produce being what I have stated it under the circumstances supposed, the value of the farmer’s stock would be greatly increased from its necessarily consisting of many of the commodities which had risen in value. Before corn could rise from £4 to £12, his capital would probably be doubled in exchangeable value, and be worth £6,000 instead of £3,000. If then his profit were £180, or 6 per cent on his original capital, profits would not at that time be really at a higher rate than 3 per cent; for £6,000 at 3 per cent gives £180; and on those terms only could a new farmer with £6,000 money in his pocket enter into the farming business” (l.c., p. 124).” (p 544)
But, this is also wrong for all the reasons previously outlined. In fact, the value of agricultural products falls, as with other commodities, as productivity rises, and this applies equally to other primary products, such as minerals. The value of each element of constant capital, for the farmer, therefore, falls, rather than rises, as Ricardo presumes. The value of livestock, of seed, and so on falls per unit. The only reason the total value of this constant capital rises is that the mass of it employed increases at a faster pace than the fall in its unit value. In other words, livestock herds increase substantially, the amount of seed planted increases significantly, and so on. However, even here, the same process seen in industry can also be seen. For example, in livestock rearing less livestock is required, as constant capital, i.e. as breeding stock, as selective breeding techniques are developed, and as better veterinary care ensures more live births. That is increased even further with artificial insemination techniques, where, for example, one prize bull can inseminate thousands of cows across the globe.
The same thing applies with arable farming where seed selection means that less seed is required for any given amount of output. That is further enhanced with the use of fertilisers and pest and disease control, as well as with genetically modified crops. Moreover, as agriculture develops these other industrially produced elements of constant capital take on a more significant role. Not only does their value fall, as with other industrial commodities, but, as with other industrial commodities, technological development means that their mass may also fall. For example, a combine harvester replaced several separate pieces of agricultural equipment. This applies also to mineral extraction.
Instead of those values rising, therefore, they fall, leading to a rise rather than fall in the rate of profit. Only to the extent that this process is also labour-saving, on the land, as productivity rises, and the mass of constant capital rises relative to the mass of labour, does it create a tendency for the rate of profit to fall. Even here, this same process can lead to a rising annual rate of profit. In mineral extraction, the vast strides in technology that have been made, have brought about a significant rise in productivity and increase in the rate of turnover of capital, thereby raising the annual rate of profit. Even in agriculture that is true, because improvements mean that animals are fattened more quickly, and various crops can be harvested several times a year.
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