Question

How do small farmers arrange for working capital?

Answer 1

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Raw materials and money in hand production requires a variety of raw material such as the yarn used by the Weaver and the clay used by the Potter . Also some money is always required during production to make payments and by other necessary items .Raw materials and money in hand are called walking capitals unlike tools , machines and buildings these are used up in production , and all these things are included in factors of production .

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The small farmers , arrange the working capital , by :

◾ Working in the fields or other works for rich or large farmer / person .

◼ By borrowing money from large farmers .

⬛ By borrowing from money lenders in the city [ Including certain amount of interest ]

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