CBSE NCERT Class IX (9th) | Social Studies | Economics

CHAPTER -1 The Story of Village Palampur

Production is the key to the economic development of a country. Production can be agricultural, like cultivation of crops, or industrial, like manufacturing of goods. Palampur is an imaginary village and could be in any part of India.
Palampur is well connected by road to bigger neighbouring village called Raiganj and to the nearest town of Shahpur. Tongas, bullock carts, bogeys, motorcycles, jeeps, truck and tractors are all used to transport people and goods on this road.

Palampur is a small village inhabited by about 450 families. The 80 upper caste families in Palampur have pucca houses made of brick and cement plaster. The Dalits account for about 1/3rd of the total population of Palampur and live in a corner of the village in small houses made of mud and straw. Most houses in Palampur have electricity connections and is used to run tube wells in the fields and support local businesses.

Palampur has two primary schools and one high school where the children can study. The residents of Palampur also have access to good health care services. Agriculture is the main occupation in Palampur.

The upper caste families own a majority of the cultivated land in Palampur. The other farmers either own small plots of land or are landless, and work as labourers in the fields of the wealthy land owners. People in Palampur are engaged in several non-farming activities as well like shop-keeping, dairy, small-scale manufacturing and transport services. Production activities require natural resources like land and water, man-made resources like raw material, human effort and intelligence, and, of course, money. 

Factors of Production
Goods and services we use are made available to us through production. There are four factors of production i.e. land, labour, physical capital and human capital.

The first requirement for production is land. Land as a production factor also includes other natural resources like water, forests and minerals found in the earth’s crust.

The second requirement for production is labour or workforce. These are the people who do the different tasks involved in production.

The third requirement for production is the inputs required for the different stages of production. These inputs are called physical capital or simply capital. The most important factor here is the entrepreneur, who is willing to risk his capital to start a production activity.

Physical capital includes inputs like machinery and tools, money and raw material required for production. Some inputs like the building of a factory and the tools and machinery installed in it can be repeatedly used for production year after year. They do not get used up in production. Such inputs are called fixed capital.

Inputs like raw material and the money used for buying it, paying electricity bills and the wages of workers, etc. get used up in the production activity. These inputs are called working capital. The fourth requirement of production is human capital. Human capital is the knowledge and effort that is put in to arrange for the other factors like land, labour and physical capital to start the production of goods or services.

How should land be used
Hectare is the standard unit for measuring land, and is equal to 10,000 square metres. Farm production is measured as yield, which is the total quantity of crop produced on a piece of land in one year. There are two ways of increasing farm production. One way to increase farm production is to increase the land area under cultivation. The other way is to adopt methods that allow you to grow more crops on the same land.

Land is a limited resource. The only way to increase land under cultivation is to convert wastelands into cultivable land. As wasteland is also limited, so this method can only increase the farmland marginally.

Hectare is the standard unit of measuring land area, and is equal to the area of a square having a side of one hundred metres. Thus, one hectare is equal to ten thousand square metres. The two ways grow more crops on the same land to increase farm production are: multiple cropping and use modern farming methods.

The method of growing two or more crops on the same land in a year is called multiple cropping. Farmers in villages grow jowar and bajra during the monsoon or kharif season. These crops are used as cattle feed.

Farmers can grow multiple crops in a year as they have access to electric-powered tube wells to irrigate their fields. Less than 40% of the cultivated area in India is irrigated, and is primarily in the northern and coastal plains. Traditional farming is less expensive, but produces lower crop yield. Farm production is measured as yield, which is the total quantity of crop produced on a piece of land in one year.

Till the 1960s, crops were grown using traditional seeds that required less irrigation and grew well with natural manure made from cattle dung. Traditional farming is less expensive as the farmer does not have to buy too many things, but it produces a lower yield of crop.

The Green Revolution in the 1960s introduced modern farming methods that used high yielding varieties (HYV) of seeds that required a lot of water, and the application of chemical fertilisers and pesticides. Modern farming is expensive as the farmer has to purchase HYV seeds, fertilisers and pesticides, and has to pay for electricity and for the installation of tube wells for irrigation. However, the crop yield is very high as compared to traditional farming.

Farmers in Punjab, Haryana and western Uttar Pradesh were the first to adopt modern farming methods in India, and their yield got more than doubled.

The Green Revolution in India was more successful for some crops than the others. However, the adverse effects of modern farming include: Prolonged use of large quantities of chemical fertilisers and pesticides kills useful bacteria in the soil, leading to soil degradation and a decrease in the natural fertility of soil.

Chemical fertilisers and pesticides percolate through the ground to pollute the precious groundwater resources. Excessive use of groundwater for irrigation through tube wells has reduced the water table in many areas.

With decreasing soil fertility, farmers are forced to use more and more fertilisers to maintain their production levels. This is increasing the cost of production for farmers and decreasing their income. Across India, 80% of the farmers are small farmers who cultivate only 36% of the total cultivable land in the country. In comparison, 20% of medium and large farmers own 64% of the total cultivable land in India.

Division of land through succession and inheritance is another reason for many farmers having smaller fields. Small farmers work in their own fields with the help of their families. Medium and large farmers hire landless workers or small farmers to work in their fields in exchange for small wages or a small share of the crop. They may be employed on daily wages or for a whole year. With farm machines taking over most of the manual work done in the fields, farm labourers find increasingly difficult to find jobs.

Small farmers are forced to borrow money from big farmers or local money lenders to arrange for farming capital. The large farmers produce a lot more than their own requirement and sell their surplus at a good profit, lend money to small farmers.

Non-Farming Activities
One-fourth of the population of Palampur is engaged in non-farming activities like shop-keeping, dairy, manufacturing and transport.

Shop-keepers buy goods from wholesalers in Shahpur and sell them in Palampur. Milk from the dairies in Palampur is transported daily to Raiganj. Some traders from Shahpur have set up collection centres and chilling plants at Raiganj, from where milk is supplied to other towns and cities.

In villages manufacturing happens at a much smaller scale using simple and often traditional methods. All members of the family contribute to the manufacturing activity and outside labour is rarely hired. Palampur is connected by an all-weather road to Raiganj and Shahpur. A number of people in Palampur are engaged in transporting goods and people along this route, using a variety of vehicles like cycle rickshaws, tongas, bullock carts, jeeps, tractors and trucks.

Kareem opened a computer class in his house using hired labour. Mishrilal buys sugarcane from other farmers in Palampur and makes jaggery that he sells to traders in Shahpur at a small profit. Kishora took a small bank loan to buy a buffalo, and became a milkman and a transporter from a landless labourer.

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