Question

The sale of surplus farm produce helps in increasing fixed capital. Explain

Answer 1

Answer:

Surplus products are sold by the big and medium farmers. The small farmers keep a substantial share of their output for family needs because their total production is small.

Explanation:

Most small farmers have to borrow money to arrange for the capital. They borrow from large farmers or the village money lenders or the traders who supply various inputs for cultivation.

Incase of small farmers though they have small piece of land the production will be enough for their family needs.

Medium and large farmers only supply wheat to the market.

By selling the surplus grains the large farmers earn more income and deposit money in their bank account.It will be used during their next cultivation.

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