Economics-The Story of Village Palampur

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Economics-The Story of Village Palampur

Answers for questions.(Questions not listed. Only answers given)Only exercise questions. No activity questions.

Ans Q1.

a. LOCATION: Bulandshahar district, Western Uttar Pradesh

b. TOTAL AREA OF THE VILLAGE: 226 hectares

c. LAND USE (in hectares):

Cultivated Land

Land not available for cultivation (Area covering dwellings, roads, ponds, grazing ground)



200 hectares


26 hectares



2 primary schools and 1 high school


1 primary health centre and 1 private dispensary


Raiganj and Shahpur

Electricity Supply

Most of the houses have electric connections. Electricity powers all the tube wells in the fields and is used in various types of small businesses.


Well-connected with neighbouring villages and towns. 3 kms from Raiganj. All-weather road connects it to Raiganj and further on to Shahpur. Many kinds of transport like bullock carts, tongas, bogeys, motorcycles, jeeps, tractors and trucks are present.

Nearest Town



Traditional farming methods involve the use of relatively low-yielding seeds, which require less water for irrigation. Farmers following the traditional methods use cow dung and other natural manure as fertilisers. All these elements are readily available with the farmers. This makes them less dependent on industrial output.

Modern farming methods, on the other hand, involve the use of high-yielding variety seeds. These seeds require a combination of chemical fertilisers and pesticides, agricultural implements like tractors, and proper irrigation facilities like electric tube wells to produce the best results. All these elements are manufactured in industries. Hence, it would be right to say that modern farming methods make use of a greater number of industrial outputs as compared to traditional farming methods.


The spread of electricity in Palampur transformed the system of irrigation in the village. Persian wheels gave way to electric-run tube wells, which reduced the dependence of the farmers upon rainfall, and enabled larger areas of land to be irrigated. By mid-1970s, the entire cultivated area of 200 hectares was irrigated. This improvement in irrigation allowed farmers to grow three different crops in a year, thereby ensuring that the cultivable land was being used for producing the maximum possible output.


Monsoons are by their very nature erratic and variable. So, farming cannot entirely depend upon rains. A large portion of the cultivable land in India is not well irrigated and is dependent entirely upon rains. As a result, when rains are late or are inadequate, farmers incur much loss. The loss is more acutely experienced by the small farmers. Failure of rain means failure of crops and a total waste of efforts and resources, both for the individual farmers and for the economy. To avoid such situations, it is important for the entire cultivable area of the country to be brought under the protective shield of proper irrigation facilities. A well-irrigated land produces greater output. The constant availability of water for irrigation provides a sense of stability to the farmer, and also encourages him to practise newer farming methods and patterns to maximise the productivity from his land.


Total area of land under cultivation in Palampur = 200 hectares

Average area of land cultivated

Number of families

Per cent of families

Per cent of land cultivated (approximate values)





Less than 2 hectares per family




More than 2 hectares per family





The reason for this is the competition for work among the agricultural labourers in the village. Knowing that supply is much more than the demand, they themselves agree to work for wages that are lower than minimum wages. The large farmers too exploit this condition of excess supply, and force labourers to work for low wages. The use of modern agricultural implements like tractors, threshers and harvesters also reduces the amount of agricultural labour required. This further intensifies the competition among the labourers looking for jobs.


Sorry! Question to be attempted by yourselves.


Multiple cropping and the use of modern farming methods are the two common ways of increasing production on the same piece of land. Multiple cropping involves growing more than one crop on a piece of land during the year. For example, farmers in the western parts of Uttar Pradesh practise multiple cropping. During the rainy season (kharif), they grow jowar and bajra. These plants are used as cattle feed. It is followed by the cultivation of potato between October and December. In the winter season (rabi), fields are sown with wheat.


The situation of a farmer with 1 hectare of land is truly problematic. Since the land area cultivated by him is small, the output is generally low. The produce is barely enough for the survival of his family. To begin work on his farm, he needs to buy seeds and fertilisers. For these, he needs sufficient capital, which is provided to him by the large farmers, traders and moneylenders as loan. The loan comes with a high rate of interest and often requires him to work in the lender’s fields. He works on his field along with his family members. Even after all their efforts of ploughing and sowing seeds, the output depends upon the availability or non-availability of water for irrigation. If irrigation facilities are not available, then the output is more or less dependent upon rainfall, which is uncertain and erratic. Thus, even the low output is not something he can be certain about. Hence, in order to make ends meet, and to repay his loans, he and his family members have to work as farm labourers.

After harvest, there is little or no surplus left as almost all the produce is either used for his needs or for repaying his lenders. The lack of savings prevents him from adopting better farming practises and improving the conditions on his farm and in his house. As he is left with almost no working capital, his situation at the end of the day is still the same. He is still in need of money to start working on his farm, and for this, he takes more loans. Thus, he remains in the vicious circle of loans.

ANS Q10.

Medium and large farmers retain a part of their produce and sell the surplus in the market. This provides them with the required capital for farming. Most of them even use these earnings to provide loans to small farmers. By charging high rates of interest on these loans, they succeed in furthering their earnings. Thus, medium and large farmers have ready capital with them from one agricultural season to the next.

The situation of small farmers is in stark contrast. They begin an agricultural season with no working capital and end the season on more or less the same note. To begin working on their farms, they take loans at high rates of interest. Due to the small sizes of their farms, their total production is small. Their produce is kept for their needs or for repaying their lenders. As a result, they have no surplus to sell in the market, and thus, have no savings.

ANS Q11.

Savita required money for buying seeds, fertilisers and pesticides, and water for irrigation. She also needed money for repairing her farm instruments. So, she decided to borrow money from Tejpal Singh, a large farmer in her village. Tejpal Singh agreed to give the loan of Rs. 3000 at an interest rate of 24 per cent for four months. He also got her to agree to work on his field during the harvest season for Rs. 35 a day. Knowing that it was difficult for a small farmer like herself to get a loan, she agreed to these tough conditions.

If she could get a loan from a bank, then her situation would definitely have been different. First of all, she would have got the loan at a reasonable rate of interest. Secondly, she would have been able to focus her entire attention on her farm. She would also have been able to devote more time to the needs of her family members, especially those of her three children.

ANS Q12.

Sorry Question to be attempted on your own!

ANS Q13.

Sorry Question to be attempted on your own!

ANS Q14.

Three things that need to be done to encourage non-farm production activities in villages:

(i) The government should set up schemes whereby landless labourers and small farmers are able to get cheap loans to start small individual/community businesses.

(ii) In addition to financial assistance, the government should set up rural workshops to enable the villagers to build on their skill levels.

(iii) The government should also work towards improving the infrastructure of villages so that the rural parts of the country are well connected to the urban areas.

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