Differentiate between large/ medium farmers and marginal farmers in terms of using surplus and arranging capital.
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Most small farmers borrow money for the requirement of capital. They borrow money from large farmers or traders that they supply various raw materials for cultivation of land or moneylenders within the village. These moneylenders charge a high rate of interest on the amount borrowed. On the other hand, medium and large farmers are able to manage the required capital with their own savings from farming.
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The medium and large farmers have their own savings from farming or the produce they would have done to meet the requirements of the future farming. On the other hand, small farmers have to borrow money from the lenders or banks or the large farmers to obtain capital required for farming.
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