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Agriculture-Industry Relation and the Question of ‘Home Market’: Towards Closing a Century’s Old Debate

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  • Chakrabarti, Saumya

Abstract

In our journey through the literature on ‘home market’ for industry we find that, time and again, agriculture has been identified as the potential sector. However, our basic point is that, it is rather the appropriate government intervention creating scope for Kaleckian ‘domestic exports’ that can mitigate the short-run problem of ‘effective demand’ faced by industry. But, we also propose that agriculture must provide industry with sufficient quantity of food – the critical ‘wage-good’. Furthermore, our Kaleckian framework shows: consistency requires complementarities between demand and supply-side supports for industrial expansion. Thus, domestic-exports/home-market and adequate food-supply should simultaneously act on industry and only under such a situation ‘realisation crises’ of both agriculture and industry could be mitigated. However, by extending our macro-framework we show, under the possibilities of international food-outflow and especially of finance-capital inflow leading to ‘commodity speculation’ the ‘autonomy’ of ‘domestic exports’ as the home market for industry reduces significantly, even becoming counter-productive.

Suggested Citation

  • Chakrabarti, Saumya, 2014. "Agriculture-Industry Relation and the Question of ‘Home Market’: Towards Closing a Century’s Old Debate," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 69(2), pages 1-28.
    • Handle: RePEc:ags:inijae:206376
    DOI: 10.22004/ag.econ.206376
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