Question

From where do poor farmer get capital needed for farming? How does it effect on it?

Answer 1

small farmers have to take loans from larg farmers or village lenders small farmers face a lot of problem because large farmer fix high interest in there loan and it will be defficult for small farmers to pay back the money.

Answer 2

Not every farmer is poor. And they get their capital for farming from their previous profits or ancestral sources.

But there are poor farmers. They choose to finance their trade from either of these sources-
1. Loans from Banks subsidized by Govt.
2. From mahajans

Govt. subsidized loans have lesser interest rate and flexible rules. Which are good for the farmers.
Mahajans, on the other hand, suck the life out of a farmer. Interest rate is very high from 20% - 150%. When the farmers cannot return the money, their land is illegally seized and thus making them landless workers which is a demotion in economic scale and the quality of life drops manifold.