The story of village palampur
Economics Chapter 1
introduction
Agriculture is the most important sector of the Indian
economy.
The Indian agriculture sector accounts for 18 per cent of
India’s gross domestic product (GDP) and employs 50% of
the country’s workforce.
India is the world’s largest producer of pulses, rice, wheat,
spices and spice products.
The Story of Village Palampur discusses topics related to
the organisation of production, labour work, capital, crop
production, transport, etc.
overview
An introduction to some basic concepts related to production
through a hypothetical village called Palampur, where farming is
the main activity.
The village also has several other activities, such as small-scale
manufacturing, dairy, transport, etc., carried out on a limited
scale.
Palampur is fairly connected with a well-developed system of
roads, transport, electricity, irrigation, schools and health centres.
The story of Palampur takes us through the different types of
production activities in the village. In India, farming is the main
production activity across villages.
Organisation of production
The main aim of production is to produce goods and services, which
require four essential components.
1. Land and other natural resources such as water, forests, minerals.
2. Labour
3. Physical capital, such as tools, machines, buildings, raw materials
and money.
4. Human capital
A variety of raw materials are required during the process of
production, such as the yarn used by the weaver and the clay used by
the potter.
Money is also essential during production and both of them in hand is
called working capital.
The fourth requirement is knowledge and enterprise to be
able to put together land, labour and physical capital and
produce an output.
Thefactors of production are combining land, labour,
physical capital and human capital.
1. Land is fixed
For Palampur, village farming is their main product
and the well-being of these people is related to
production on the farms.
But, there is a basic constraint in raising farm
production. The land area under cultivation is
practically fixed.
2. is there a way one can grow more
from the same land
In the rainy season, Kharif farmers grow jowar and
bajra, followed by the cultivation of potatoes between
October and December.
Inwinter, farmers grow wheat and a part of the land is
devoted to sugarcane, harvested once every year.
Different types of crops
Due to well-developed irrigation, farmers can grow three
different crops.
Electricity transformed the system of irrigation.
Multiple cropping means to grow more than one crop on a
piece of land.
Another way for higher yield is modern farming.
In the later 1960s, the Green Revolution introduced the
Indian farmer to the cultivation of wheat and rice using
high-yielding varieties (HYVs) of seeds.
3. Will the land sustain?
Modern farming methods have overused the natural resource
base.
Due to the increase use of chemical fertilisers, the soil lost its
fertility.
Natural resources like soil fertility and groundwater are
destroyed and it is very difficult to restore them.
4. How is land distributed between
the farmers of Palampur?
The land is important for any kind of farming. In
Palampur, about one-third of the 450 families are
landless.
Dalits have no land for cultivation.
240 families cultivate small plots of land less than 2
hectares in size.
In Palampur, there are 60 families of medium and large
farmers who cultivate more than 2 hectares of land.
5. WHO WILL PROVIDE THE
LABOUR?
Small farmers cultivate their own lands.
Medium and large farmers hire labourers to cultivate their fields who come
either from landless families or families cultivating small plots of land.
Farm labourers will not have any right over the crops grown on the land.
They will be paid wages for their work which can be cash or in-kind, eg.
Crop. Sometimes labourers get meals also.
Wages vary from region, crop to crop and from one farm activity to
another.
Farm labourers are employed on a daily basis, or for one particular farm
activity like harvesting, or for the whole year.
6. Capital needed in farming
Modern farming methods require a great deal of capital.
1. Most small farmers borrow money from large farmers
or village moneylenders or traders who supply various
inputs for cultivation.
Therate of interest on such loans is very high.
2. The medium and large farmers have their own savings
from farming.
They are thus able to arrange for the capital needed.
7. Sale of surplus farm products
The wheat the farmers produce from the land is
retained in part for their family consumption and
they sell the surplus wheat.
Only the medium and large farmers supply wheat to
the market.
Non-farm activities in palampur
25% of the people working in Palampur are engaged in activities other than
agriculture.
1. Dairy – the other common activity
* Other than agriculture, some people are engaged in dairy and the silk
is sold in the nearby village.
2. An example of small-scale manufacturing in Palampur
* This manufacturing involves very simple production methods.
3. The shopkeeper of Palampur
* Traders of Palampur buy various goods from wholesale markets in the
cities and sell them in the village.
4. General stores in the village sell a wide range of items like rice, wheat,
sugar, tea, oil, biscuits, soap, toothpaste, batteries, candles, notebooks,
pens, pencils and even some types of cloth.
4. Transport: a fast-developing sector
* Transport service include rickshaws, tongas, jeeps,
tractors, truck drivers, traditional bullock carts and
bogeys.
* They transport people and goods from one place to
another and, in return, get paid for it.
