Question

You have already seen that the modern farming methods required a great deal of capital, so that the farmer now needs more money than before.
1) Most small farmers have to borrow money to arrange for the capital. They borrow from large farmers or the village money lenders or the trades who supply various inputs for cultivation. The rate of interest on such loans is very high. The are put to great distress to repay the loan.
2) In contrast to the small farmers, the medium and large farmers have their own savings from farming. They are thus able to arrange for the capital needed.

Answer 1

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