Economics

(i) Distinction between fixed capital and working capital :
Fixed Capital : Tools, machines and building are called fixed capital because they can be used in production over years.
Working Capital : Raw material and money from the part of working capital because unlike tools, buildings and machines they are used up in production.
(ii) Difference between (a) Multiple Cropping and (b) Modern farming methods.
(a) Multiple Cropping : To grow more than one crop on a piece of land during the same years is called multiple cropping. With the improvement of irrigational facilities, as a result of the coming of electricity farmers are above to grow two main crops - kharif crops (like rice, millets, maize etc.) and rabi crops (wheat, barely, grain etc.). Many farmers are also able to grow potatoes as the third crop.
(b) Modern Farming Methods : Some other farmers, like in Punjab and Haryana, have increased their production by using latest scientific methods - like using fertilizers, improved varieties of seeds, use of latest machinery, improvement of irrigational facilities etc. As a result of these modern farming methods, the farmers of Punjab and Haryana heralded the Green Revolution and improved their production many folds.
(iii) How do the medium and large farmers obtain capital for farming ? How is it different from the small farmers ?
It is a fact that the small farmers with less than 2 hectares of land, have to face much more problems than the medium and large farmers. As compared to small farmers, medium and large farmers can quite easily obtain capital for farming.
1. Especially large farmers have their own savings from farming which they had accumulated year after year so they don’t have any need of taking any debt from any bank money lender or any other agency.
2. Mostly medium farmers also have their own savings to spend on the betterment of their farms. But if they stand in need of any borrowing, such an amount is not quite much because they have about 50 to 75 % of the amount already with them. Such farmers can go to the bank direct and get the loan at quite a reasonable rate. The bank shall be quite happy in advancing loan to such good pay-masters. There is no risk in advancing loans to medium farmers because of their better economic condition. As compared to him a small farmer is bound to face much questioning by the bank staff, any money lender or trader.