Chapter 1 of NCERT Economics Class IX
The Story of Village Palampur
Table of Contents
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The organization of Production :
The organization of Production aims to produce the goods and services that we want. There are four requirements for the production of goods and services. Those are
- Land
- Labour
- Physical Capital
- Human Capital
Land :
- The first requirement is land, and other natural resources such as water, forests, and minerals.
- Farming is the main production in India. At present farmers can grow three different crops in a year due to the well-developed system of irrigation. It happened due to electricity came into India created a major impact to transform the system of irrigation.
- To grow more than one crop on a piece of land during the year is known as multiple cropping. It is the most common way of increasing production on a given piece of land.
- Persian wheels were, till then, used by farmers to draw water from the wells and irrigate small fields. But Electric-run tube wells could irrigate much larger areas of land more effectively.
- The first few tube wells were installed by the government. Soon, however, farmers started setting up private tube wells.
- You have seen that one way of increasing production from the same land is by multiple cropping. The other way is to use modern farming methods for higher yields.
- Yield is measured as a crop produced on a given piece of land during a single season.
- Till the mid-1960s, the seeds used in cultivation were traditional ones with relatively low yields
- Traditional seeds needed less irrigation. Farmers used cow dung and other natural manure as fertilizers. All these were readily available to the farmers who did not have to buy them.
- The Green Revolution in the late 1960s introduced the Indian farmer to the cultivation of wheat and rice using high-yielding varieties (HYVs) of seeds.
- Compared to the traditional seeds, the HYV seeds promised to produce much greater amounts of grain on a single plant. As a result, the same piece of land would now produce far larger quantities of food grains than was possible earlier.
- HYV seeds, however, needed plenty of water and also chemical fertilizers and pesticides to produce the best results.
- Higher yields were possible only from a combination of HYV seeds, irrigation, chemical fertilizers, pesticides, etc.
- Farmers of Punjab, Haryana, and Western Uttar Pradesh were the first to try out the modern farming method in India.
- They bought farm machinery, like tractors and threshers, which made plowing and harvesting faster. They were rewarded with high yields of wheat.
- In many areas, Green Revolution is associated with the loss of soil fertility due to the increased use of chemical fertilizers.
- Also, the continuous use of groundwater for tube well irrigation has led to the depletion of the water table.
- Environmental resources, like soil fertility and groundwater, are built up over years. Once destroyed it is very difficult to restore them. We must take care of the environment to ensure the future development of agriculture.
- Chemical fertilizers provide minerals that dissolve in water and are immediately available to plants. But these may not be retained in the soil for long. They may escape from the soil and pollute groundwater, rivers, and lakes. Chemical fertilizers can also kill bacteria and other microorganisms in the soil. This means sometime after their use; the soil will be less fertile than ever before.
- You must have realized how important land is for farming. Unfortunately, not all the people engaged in agriculture have sufficient land for cultivation in India, and most of them Dalits, have no land for cultivation. families who own land, most of which are small parts of land less than 2 hectares in size are known as small farmers. Cultivation of such small parts of land doesn’t bring adequate income to the farmer’s family.
- On the other hand, large farmers are known as those who cultivate more than 2 hectares of land. A few of the large farmers have land extending over 10 hectares or more.
Labour :
- After land, labor is the next necessary factor for production. The second requirement is labor, i.e., people who will do the work.
- Some production activities require highly educated workers to perform the necessary tasks. Other activities require workers who can do manual work. Each worker is providing the labor necessary for production.
- More than 75 percent of the people who are working are dependent on farming for their livelihood, They could be farmers or farm laborers.
- Small farmers along with their families cultivate their own fields. Thus, they provide the labor required for farming themselves. Medium and large farmers hire farm laborers to work in their fields.
- A farm laborer might be employed on a daily basis, (or) for one particular farm activity like harvesting, or for the whole year.
- There is heavy competition for work among farm laborers in India, so people agree to work for lower wages.
- Wages can be in cash or in kind e.g., crop. Sometimes laborers get meals also. Wages vary widely from region to region, from crop to crop, and from one farm activity to another (like sowing and harvesting).
Physical Capital :
- The third requirement is physical capital, i.e., the variety of inputs required at every stage during production. It consists of fixed capital and working capital.
- Tools and machines range from very simple tools such as a farmer’s plow to sophisticated machines such as generators, turbines, computers, etc. Tools, machines, and buildings can be used in production over many years, and are called fixed capital.
- You have already seen that modern farming methods require a great deal of capital so the farmer now needs more money than before.
- Most small farmers have to borrow money to arrange for capital amount. They borrow from large farmers or village moneylenders or traders who supply various inputs for cultivation.
- The rate of interest on such loans is very high. They are put in great distress to repay the loan.
- The medium and large farmers have their own savings from farming. They are thus able to arrange for the capital amount needed.
- Raw materials and money in hand are called working capital. Unlike tools, machines, and buildings, these are used up in production.
- Production requires a variety of raw materials such as the yarn used by the weaver and the clay used by the potter.
- Also, some money is always required during production to make payments and buy other necessary items.
Human Capital :
- There is a fourth requirement too. You will need knowledge and enterprise to be able to put together land, labor, and physical capital and produce an output either to use yourself or to sell in the market, this these days is called human capital.
- Every production is organized by combining land, labor, physical capital, and human capital, which are known as factors of production.
- The wheat is harvested and production is complete. Let us suppose that the farmers have produced wheat on their lands using the three factors of production. The farmers retain a part of the wheat for the family’s consumption and sell the surplus wheat.
- Small farmers have little surplus wheat because their total production is small and from this, a substantial share is kept for their own family needs. So, it is the medium and large farmers who supply wheat to the market. Later the medium and large farmers use the savings for lending to small farmers, and They also uses that savings to arrange for the working capital for farming in the next season.
- Some farmers might also use the savings to buy cattle, and trucks, or to set up shops. As we shall see, these constitute the capital amount for non-farm activities.
Non - Farm Activities :
Learned about farming as the main production activity, now take a look at some of the non-farm production activities.
Dairy farming :
- Dairy farming is a common activity in many families in India. People feed their buffalos on various kinds of grass and the milk is sold in the nearby large villages.
- Traders from the town have set up collection cum chilling centers where the milk is transported to far-away towns and cities.
Manufacturing of Products :
- Fewer people in villages are engaged in manufacturing, Unlike the manufacturing that takes place in the big factories in the towns and cities.
- Manufacturing in villages involves very simple production methods and is done on a small scale.
- They are carried out mostly at home or in the fields with the help of family labor. Rarely are laborers hired.
Shopkeepers and Traders :
- The traders at the market buy the wheat and sell it further to shopkeepers in the towns and cities.
- People involved in trade (exchange of goods) are not many in villages. shopkeepers who buy various goods from wholesale markets in the cities and sell them in the village.
Transport Sector
- There is a variety of vehicles on the road connecting villages, towns, and cities. Rickshawallahs, tonga wallahs, jeeps, tractors, truck drivers, and people driving the traditional bullock cart and bogey are people in the transport services.
- They ferry people and goods from one place to another, and in return get paid for it. The number of people involved in transport has grown over the last several years.
