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Farming is the main production activity in the village. Over the
years there have been many important changes in the way farming is
practiced. These have allowed the farmers to produce more crops from
the same amount of land. This is an important achievement since land is
fixed and scarce. But in raising production a great deal of pressure has
been put on the land and other natural resources.
The new ways of farming need less land, but much more capital. The medium and large farmers are able to use their own savings
from production to arrange for capital during the next season. On the
other hand, the small farmers who constitute about 80 percent of total
farmers in India, find it difficult to obtain capital. Because of the small
size of their plots, their production is not enough. The lack of surplus
means that they are unable to obtain capital from their own savings, and
have to borrow. Besides the debt, many of the small farmers have to do
additional work as farm laborers to feed themselves and their families.
Labour being the most abundant factor of production, it would be
ideal if new ways of farming used much more labor. Unfortunately,
such a thing has not happened. The use of labor on farms is limited.
The labor, looking for opportunities is thus migrating to neighboring
villages, towns, and cities. Some labor has entered the non-farm sector
in the village.
In the future, one would like to see more non-farm production
activities in the village. Unlike farming, non-farm activities require little
land. People with some amount of capital can set up non-farm activities.
How does one obtain this capital? One can either use his own savings,
but more often has to take a loan. It is important that loans be available at
low rate of interest so that even people without savings can start some
non-farm activity. Another thing which is essential for expansion of nonfarm activities is to have markets where the goods and services produced
can be sold. Neighbouring villages, towns and cities provide the markets
for milk, jaggery, wheat, etc.