How do the medium and large farmers obtain capital for farming? How is it different from the Small farmers?
Medium and large farmers obtain capital for farming from their past savings. The production of medium and large farmers is usually more than their consumption; this is how they save for their next round of farming. They sell the extra output in market and earn money. But small farmers do not have savings because in the very first round of farming, they don’t have sufficient land to cultivate, thus extra yielding and savings are not quite possible for them. Their arrangement of capital is done by taking loans from moneylenders or large farmers.
On what terms did Savita get a loan from Tejpal Singh? Would Savita's condition would be different if she could get a loan from the bank at a low rate of interest?(view answer)