INDIAN SCHOOL AL WADI AL KABIR

QUESTION BANK

Subject: ECONOMICS

CLASS: IX

Chapter 1: THE STORY OF PALAMPUR

1.  How do some farmers, such as those in Palampur accumulate savings?

A: i. The large farmers sell their surplus in the market and earn money.

ii. They use the money to buy capital and increase their production without depending on the money lenders.

iii. They engage in non-farm activities like dairy farming. The products are sold in the market to earn money.

2. Explain the difficulties faced by the small farmers due to lack of capital.

A: The small farmers find it difficult to obtain capital from their own earning since their farm production is not enough.

i.  They have to borrow money at high rate of interest for arranging capital.

ii.  To pay off the debt they have to do additional work as farm labourers.

iii.  Low savings and lack of capital lead to extreme poverty for these farmers.

3. How do the medium and large farmers obtain capital? How is it different from the small farmers?

A:i. The medium and large farmers sell their surplus farm production in the market. Part of their earning is saved and kept for buying capital for the next season.

ii. Small farmers have low farm production and do not have sufficient earnings. They have to borrow money to arrange for capital. They borrow from large farmers or the local money lenders or traders supplying various inputs.

4. Explain the changes that took place in agriculture following the Green Revolution in the 60s.

A:iThe use of modern technology in agriculture implying the use of HYV seeds, chemical fertilizers and pesticides and well developed system of irrigation led to substantial increase in food grains, mainly wheat and rice.

ii. It led to growth of income and reduction of poverty among the farmers who used the modern technology.

iii. It led to commercialization of agriculture.

5. Both land and capital are scarce factors of production. But these two factors have a basic difference. What is this difference?

A: i. Land is a natural gift of nature. It is limited in supply and it is impossible to increase the supply of land. Land is a passive factor of production as it cannot produce anything by itself. Land is permanent, indestructible and immovable.

ii. Capital on the other hand is man-made. It is limited and can be increased according to demands of higher production. It is movable and non-permanent.

6. Name some non-farming activities taking place in Palampur.

A: Dairy farming, small scale manufacturing, exchange of goods on small scale and transportation of goods and people.

7. The farmers using modern methods of farming needs more cash than before. Why?

A: i. Continuous use of chemical fertilizers due to the use of modern methods of farming has led to the degradation of soil. Farmers are now forced to use chemical fertilizers more and more and also other inputs to retain the same level of production. Thus the cost of cultivation has risen very fast for which the farmers need more cash.

8. How is land distributed between farmers of Palampur? Do you find the same inequality in distribution of agricultural land in Indian villages?

A: i. The economic well being of farmers is judged by the amount of land they own. However not all farmers have sufficient land for cultivation in Palampur. One third of the 450 families of Palampur i.e. 150 families are landless. Of the remaining families who own land240 families cultivate very small plots of land which do not bring adequate income to their families. Only 60 families cultivate more than 2 hectares of land and only a few farmers have land more than 10 hectares.

ii. This uneven distribution of land is observed in the context of Indian villages as well. About one third of the farmers are landless. The top 20% of farmers own about 64% of cultivable land while the other small and medium farmers own 36% of arable land. Very few farmers are able to meet their family needs.

9. Suggest two measures to increase non-farming activities in villages.

A: Non-farming activities in villages can be increased by:

i.  Opening rural banks to provide loans at low rate of interest.

ii.  More markets to sell goods which are produced.

iii.  Develop a good transport and communication system.

10. Who are agricultural labourers?

A: They are the landless farmers or those who do not own sufficient land for cultivation. They are hired by medium and large farmers to do activities related to agricultural sector.

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