How are medium or large farmers obtained capital for farming how is it different from small farmers?
Answers
Modern farming methods such as use of HYV insecticides pesticides etc require a great deal of capital so the farmer needs more money than before.
(i) The medium and large farmers have their own savings from farming. They are thus able to arrange for the capital needed.
(ii) In contrast, the small farmers have to borrow money to arrange for the capital. They borrow from large farmers or the village moneylenders or the traders who supply various inputs for cultivation.
(iii) The rate of interest on such loans is very high. They are put to great distress to repay the loan, which is not so in .the case of medium and large farmers.
The medium and large farmers ave their own savings from farming .they are thus able to arrange for the capital needed.
In contrast the small farmers have to borrow from large farmers or the village money lenders or the traders who supply various inputs for cultivation.