Q2. Savita is a small farmer. She plans to cultivate wheat on her 1 hectare of land. Besides seeds,
fertilizers and pesticides, she needs cash to buy water and repair her farm instruments. She doesn’t have the money, so she decides to borrow from Tejpal Singh, a large Tejpal Singh agrees to give Savita the loan.
With reference to the above paragraph, answer the questions: (1+2=3) (a) List out any one working capital and one fixed capital needed by Savita.
(b) Do you think small farmer like Savita would be in a better position after borrowing money from the large farmer like Tejpal Singh? Justify your answer giving two points.
Answers
To buy water seeds, fertilizers, pesticides and repair her farm instruments small farmers needs cash.So to buy these they need little surplus money.
The live example is savita given in the story
Answer:
Read the source given below and answer any 5 of the 6 questions that follow
by choosing the most appropriate option:
Savita is a small farmer. She plans to cultivate wheat on her 1 hectare of land.
Besides seeds, fertilizers and pesticides, she needs cash to buy water and repair her
farm instruments. With an estimate of her working capital requirement, she decides to
borrow money from Tejpal Singh, a large farmer. He agrees to give Savita the loan at
an interest rate of 24 per cent for four months, which is a very high rate. Savita also
has to promise to work on his field as a farm labourer during the harvest season at
Rs 35 per day. She knows that it’s highly difficult for a small farmer to get loans and
so she agrees as to the terms whatsoever. As large farmers often have their own
savings from farming, they can easily arrange the required capital and therefore lend
money to small farmers at a higher rate of interest. Considering all factors of
production, labour is the one available in abundance. Though both land and capital
are scarce, there is a basic difference between the two factors of production. Land is
a natural resource, whereas capital is man-made. It is possible to increase capital,
whereas land is fixed. After the harvest, a part of the crop is retained for personal
consumption and the surplus is sold. However, small farmers do not have the
privilege of this. Large and medium farmers sell it to the traders in the market who
buy the wheat and sell it further to shopkeepers in the towns and cities.
47. Which one of the following is a man made resource?
A) Land b) water c) soil d) chair
48. Where do most of the small farmers borrow money to arrange for the capital in
Palampur?
(a) Banks (b) Co-operative Societies (c) Village money lenders (d) Friends
and relatives
49. Who is a person who puts together land, labour and capital?
(a) Moneylender (b) Entrepreneur (c) Zamindar (d) Manager
50. Which factor of production is fixed ?
(A)land (B)capital (C)labour (D) none
51. Savita is a ………….farmer?
(a)small farmer ( b)medium farmer (c) large farmer (d)none.
52. Which one of the following is factor of production ?
(a)land (b) labour (c) capital (d)all of these
Explanation: