How do social farmers obtain capital for farming? What is the consequence ? Explain
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Explanation:
Small farmers obtain capital for farming by borrowing capital or money from big farmers or money lenders to obtain capital for farming who supply various inputs and money for cultivation. Consequences- The rate of interest on such loans is very high, which put the small farmers into great distress to repay the loan.
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method of obtaining capital
small and middle farmers(who own less amount of land ) : loans from either banks or large farmers
large farmers : saving generated by last year's sale .
consequence : small farmers are not able to earn enough to pay back the loan so take loan from another farmer . hence . they are always caught up in debt trap.
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