T

N o te b o o k:

Economics NCERTs

C re a te d :

8/25/2016 4:11 PM

Au th o r:

NALIN L GUPTA

U p d a te d :

8/25/2016 4:11 PM

In villages across India, farming is the main production activity. Other production activities (referred to
as non-farm activities) include small-scale manufacturing, transport, shop-keeping, etc. All these
production activities need resources- natural resources, man-made items, human effort, money, etc.
Organization of Production
The aim of production is to produce the goods and services that we want. There are four requirements for
production of goods and services. Every production is organised by combining land, labour,
capital and human resource, which are known as factors of production. These are explained in short as
follows:
1. Land: This includes land and other natural resources such as water, forests, minerals, etc.
2. Labor: People who will do the work.
3. Capital: This is the variety of inputs required at various stages during production.
1. Fixed Capital: Tools, buildings, machines (computers, etc.), which can be used for production
over years.
2. Working Capital: Raw materials and money in hand comprise the working capital. Unlike tools,
machines, etc. these are repeatedly used up in production. The idea of production is the
conversion of raw materials in to finished products. The raw material is the working capital.
4. Human Resource: The knowledge and enterprise (skill, training, expertise, etc.) needed to be able to
put together the land, labor, and capital is the human resource.
Farming: includes farmers as well as farm laborers.
Yield: Yield is measured as total quantity of crop produced on a given piece of land during a single
season.
One of the basic constraints in raising farm production is that the land area under cultivation is
practically constant. For decades now, there has been no expansion of land area under cultivation.
With a well developed system of irrigation, farmers can grow up to three different crops in a year on the
same piece of land. This is known as multiple cropping.

Apart from the riverine plains, coastal regions in our country are well-irrigated. In contrast,
plateau regions such as the Deccan plateau have low levels of irrigation.
Irrigation in India: Of the total cultivated area in the country a little less than 40 % is irrigated
even today. In the remaining areas, farming is largely dependent on rainfall.
Ways to increase farm production:
1. Multiple cropping: To grow more than one crop on a piece of land during the yr is known as
multiple cropping. Multiple cropping allows cultivation during rabi, kharif and rainy seasons.
2. Well developed system of irrigation (electric-run tubewells) is a must for farmers to practice
multiple cropping.
Only riverine plains and coastal regions are well irrigated in India.
Deccan plateau has low levels of irrigation and production is mainly dependent on rainfall.
3. Use of modern farming methods: These include High Yielding Variety (HYV) of seeds,
chemical fertilizers, pestisides, etc.
HYV Seeds Advantages:
1. High Farm Production from the same land.
HYV Seeds Disadvantages:
1. Need plenty of water.
2. Need chemical fertilizers and pesticides. Previously, for traditional seeds farmers
used cow dung and natural manure.
3. High input cost of production to be incurred by the farmer.
READ on pp 4 of the book. Right side second para. Starting:The Green Revolution.....three
paragraphs.......Ending:...... sell in the mark ets.

Farmers of Punjab, Haryana and Western UP were the first to try out the modern farming

method in India.
Problems with Green Revolution:
1. Scientific reports indicate that the modern farming methods have overused the natural resource
base.
2. In many areas, Green Revolution is associated with the loss of soil fertility due to increased use
of chemical fertilizers.
3. A continuous use of groundwater for tubewell irrigation has reduced the water-table below
the ground.
4. Chemical fertilizers provide minerals which 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.
Environmental resources like soil fertility and groundwater are built up over many years. Once
destroyed it is very difficult to restore them. We must take care of the environment to ensure
future development of agriculture.
Why dost of production is continuously increasing? The continuous use of

chemical fertilizers has led to degradation of soil health. Farmers are now forced to use
more and more chemical fertilizers and other inputs to achieve the same production level.
This means cost of cultivation is rising very fast.
Labor for farming is provided by landless families or those families of the village who have small pieces
of lands. Medium and large farmers hire labor to work on their fields. Unlike farmers, they have no right
over the farm produce. They are paid wages for their daily work.
Due to the huge population of families which do not have sufficient lands, the laborers work at
wages which are lower than the govt recommended minimum wage. This is one of the reasons
they are poor.
Thus, labor is the most abundant factor of production.
We have seen that modern farming methods need more capital than the traditional methods. Small
farmers have to borrow money to arrange for the capital. They borrow from large farmers or

the village moneylenders or the traders who supply various inputs for cultivation. The rate of
interest on such loans is very high. They are put to great distress to repay the loan.
Poverty as a challenge
Poverty is one of the most difficult multi-dimensional challenges which the independent India is facing. Some
facts:
Every forth person in India is poor.
Roughly 270 million (or 27 crore) people in India live in poverty.
India has the largest single concentration of poor in the world.
As mentioned before, poverty is a multi-dimensional problem. Issues (consequences + reasons) related to
poverty are:
1. Landlessness
2. Unemployment
3. Size of families
4. Illiteracy
5. Poor health/malnutrition
6. Child labor
7. Helplessness

Food Security in India

The 1995 World Food Summit declared-- Food security at the individual, household, regional, national and
global levels exists when all people, at all times, have physical and economic access to sufficient, safe and
nutritious food to meet their dietary needs and food preferences for an active and healthy life.
Food security means availability, accessibility and affordability of food to all people at all times. Food
security means something more than getting two square meals. Food security has the
following dimensions:
1. availability of food means food production within the country, food imports and the previous years
stock stored in government granaries.

2. accessibility means food is within reach of every person.

3. affordability implies that an individual has enough money to buy sufficient, safe and nutritious food to
meet one's dietary needs.
Let us take three examples:
1. India is neither able to produce food grains nor is it able to import food grains to cater the needs of its
entire population. This implies that food is not available to Indian people.
2. India imported sufficient food grains which lie at all ports and is not distributed to the markets so that it
is unable to reach the needful people. This implies availability of food but not its accessibility.
3. Food imported and distributed but the problem lies in the prices which the common people can pay in
order to buy food grains. This is an example of poor affordability. Food is available, accessible, but is
not affordable in this example.
Natural calamity-----} Production of food grains decreases-------} Shortage of food------} Prices of food grains
shoot up-------} People cannot afford to buy food------} May lead to starvation if the calamity happens over a wide
area for a sufficiently long time------} Massive starvation leads to famine.
What is a famine?
A Famine is characterised by wide spread deaths due to starvation and epidemics caused by forced use
of contaminated water or decaying food and loss of body resistance due to weakening from starvation.
Who are food insecure?
1. Because of the seasonal nature of agricultural work, landless agricultural labor and small and
marginalized farmers face financial crisis during those times of the year when they do not find any
employment. This is the time when their families suffer from food insecurity the most.
2. The social composition along with the inability to buy food also plays a role in food insecurity. The SCs,
STs and some sections of the OBCs who have either poor land-base or very low land productivity are
prone to food insecurity.
3. A high incidence of malnutrition prevails among women. This is a matter of serious concern as it puts
even the unborn baby at the risk of malnutrition. A large proportion of pregnant and nursing mothers and
children under the age of 5 years constitute an important segment of the food insecure population.
From the latest NFHS find out the no of such children and women.
The states of Uttar Pradesh (eastern and south-eastern parts), Bihar, Jharkhand, Orissa, West
Bengal, Chattisgarh, parts of Madhya Pradesh and Maharashtra account for largest number of food insecure
people in the country.
Why PDS card?
PDS (Yellow card) Card is issued mainly for below poverty line people. With this card, BPL people get
sufficient quantity of wheat, rice, sugar and kerosene oil for their daily use. They get these essentials at half of
the market price (or sometimes at even lower prices). Purchases are made for monthly stocks of families
during a particular day when the ration shop is opened for BPL people.
Hunger as an indicator of food insecurity
Hunger is another aspect indicating food insecurity. The attainment of food security therefore involves
eliminating
current
hunger
and
reducing
the
risks
of
future
hunger.
Hunger
has chronic and seasonal dimensions.
Chronic hunger is a consequence of diets persistently inadequate in terms of quantity and/or quality.
Poor people suffer from chronic hunger because of their very low income and in turn inability to buy food
even for survival.
Seasonal hunger is related to cycles of food growing and harvesting. This is prevalent in rural
areas because of the seasonal nature of agricultural activities and in urban areas because of the
casual labor, e.g., there is less work for casual construction labour during the rainy
season.