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How do the medium and large farmers obtain capital for farming? How is it different from the small farmers?

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Palampur is well-connected with adjacent villages and towns. The large village of Raiganj is 3 kilometres away from Palampur. The village is connected to Raiganj by an all-weather road, and Shahpur, the closest small town, is reached after that. Numerous modes of transportation, including bullock carts, tongas, and bogeys (wooden carts driven by buffalos) filled with jaggery (gur) and other goods, are evident on this road, in addition to motorcycles, jeeps, tractors, and trucks. About 450 families from various castes make up this village. The 80 upper-caste families own most of the land in the village. SCs (Dalits), who make up one-third of the population, live in a section of the hamlet in significantly smaller dwellings, some of which are made of mud and straw. Most of the houses have electric connections.

Production organization

Producing the things and services we want is the goal of production. The primary prerequisite for producing goods and services is land, as well as other natural resources like water, forests, and minerals.

Labour, or the actual individuals who perform the labour, is the second necessity. To complete the necessary responsibilities for some production processes, highly educated people are needed. Workers that can perform manual labour are needed for additional tasks. Each employee contributes the labour required for production.

Physical capital, or the variety of inputs needed at each stage of manufacturing, is the third criterion. The following things fall under physical capital:

  • From very basic equipment like a farmer’s plough to complex machines like generators, turbines, computers, etc., tools and machinery come in many shapes and sizes. Fixed capital includes things like buildings, machines, and tools that can be employed in production for many years.
  • A number of raw materials are needed for production, including the yarn the potter uses.Additionally, it costs money to make payments and purchase other necessities throughout production.Working capital is defined as cash on hand and raw commodities. Unlike equipment, structures, and tools, these are used up throughout production.

There is also a fourth prerequisite. To combine land, labour, and physical capital and produce an output for your own use or to sell on the market, you will need knowledge and initiative. These days, this is referred to as human capital.

The “factors of production”—land, labour, physical capital, and human capital—are integrated to organize every output.

How do medium and large farmers obtain capital for farming? How is it different from the small farmers?

  • Capital Needed by Large and Medium Farmers- Working capital includes cash on hand and raw materials. Due to their own farm savings, large and medium farmers are arranging their own capital. Large and medium-sized farmers keep some of their farm products for personal use, and they sell the excess goods at a profit in the market. Farmers who operate on a large and medium scale save their profits in banks. These large and medium-sized farmers occasionally lend their savings to small farmers at high interest rates in order to increase their income. Large and medium-sized farmers will occasionally use their funds to buy tractors to enhance their fixed capital when needed. As a result, the money saved from selling farm products from the previous season is used to purchase the capital for the next one. Some large- and medium-sized farmers utilize their funds to create businesses, buy vehicles or cattle, or all three.
  • Capital Needed by Small Farmers-Small farmers borrow money to fund their operations. Small farmers are compelled to take out loans from local moneylenders, businessmen, or major farmers at exorbitant interest rates. Due to exorbitant interest rates, many small farmers frequently find themselves in debt traps and unable to repay their debts.

Frequently Asked Questions

Que 1. Describe the purpose and meaning of the production.

Ans- Production is the process of adding value to a commodity, such as when steel is used to manufacture an automobile. Production’s primary goal is to deliver the goods and services that consumers demand. Production of commodities and services requires four factors: land, labour, physical capital, and human capital.

Que 2. Describe the issues that result from the uneven allocation of land.

Ans- The issues are-

  • Economic Inequality: Inequality in the distribution of land results in inequality in the economy.
  • Joblessness: It causes joblessness.
  • Hunger and Poverty: These two problems are caused by a lack of economic opportunity.

Que 3. List any three distinctions between land and money.

Ans-

Land

Money

It is a constant manufacturing factor.

It is an artificial production element.

Nature gave it to us for free.

It is a manufactured source of supply.

Fertility of land varies.

It comes in two varieties: fixed capital and operating capital.

Que 4. Mention any four entrepreneurship traits or human capital as a production element.

Ans-

  • It is a production factor that integrates or arranges all other production factors to generate.
  • It is a producing factor that is active.
  • It creates products and services for either internal consumption or external sale.
  • It is the most significant production factor.

Que 5. What events caused the water level in Palampur to drop?

Ans- The underground water table has decreased as a result of ongoing groundwater consumption for irrigation of tub wells, But environmental resources like groundwater and soil fertility are accumulated over time. Thus, it is highly challenging to repair them after they have been damaged. Misuse of groundwater contributes significantly to the decline of the water table.


Last Updated : 25 May, 2023
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