Question

Who provides capital to the small farmers at high rate of interest? one word

Answer 1

Medium and big farmers retain a part of their produce and sell the surplus in the market. They put this money into their bank account which is received from selling the surplus. Out of their saved money, they provide loans to poor and small farmers. Medium and big farmers also use their savings to arrange the working capital for farming in the next agricultural season. They use this money to buy machinery, cattle, or set up shops. Very high interest is charged on the loans, which they provide to small and poor farmers. They charge high interest rate like 24 % for 4 month. Small and poor farmers also borrow money from village money lenders.
Because of this, the small and poor farmers' situation become worse day by day. They begin an agricultural season with no working capital and end the season with more or less same situation. To begin working on their farms, they take loans at very high interest rates. Due to the small sizes of their plots, their total production is small. Hence they don't have surplus production to sell in the market. They keep most of their production for their own family needs. 

Answer 2

Medium and substantial agriculturists hold a piece of their deliver and offer the surplus in the market. This furnishes them with the required capital for cultivating. The greater part of them even utilizes these profit to give advances to little agriculturists. By changing high rates of enthusiasm on these credits, they prevail with regards to facilitating their income. In this way, medium and extensive farmers have prepared capital with them starting with one rural season then onto the next.

The circumstance of little agriculturists glaring difference a conspicuous difference. They start a rural season with no working capital and end the season on pretty much a similar note. To start dealing with their farms, they take credits at high rates of interest. Because of little sizes of their farms, their aggregate generation is little. Their delivery is kept for their necessities or for reimbursing their moneylenders. Therefore, they have no surplus to offer in the market and along these lines have no investment funds.