THE STORY OF VILLAGE PALAMPUR

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What is Economics?

• Rules of home/habitat can be defined as economics.
• When resources are less, rules are needed. 
• Economy – a subject that deals with management of resources.

Resources

• What is a resource?
• Anything that can satisfy human needs.
• Or anything that converts input into output.
• Examples – Solar energy, wood, water, labour etc.

Palampur Scenario

• Farming is the main activity of Palampur.
• Other activities such as small scale manufacturing, dairy activities are also carried out on a limited scale.
• Various type of resources are needed for these activities.
• Examples – natural resources, manual labour, man made items, money etc. 
• This village has about 450 families belonging to several different castes.
• The 80 upper caste families own the majority of land in the village. Their houses, some of them quite large, are made of brick with cement plastering. 
• The SCs comprise one third of the population and live in one corner of the village and in much smaller houses some of which are of mud and straw.
• Most of the houses have electric connections. Electricity powers all the tube wells in the fields and is used in various types of small business.
• Palampur has two primary schools and one high school.
• There is a primary health centre run by the government and one private dispensary where the sick are treated. 
• The village of Palampur is well developed and it is connected with neighbouring villages and towns like Raiganj and Shahpur.
• The story of this village is imaginary and will help us to understand farming better.
• There are two types of activities carried out in Palampur.
  • Farming activities
  • Non-farming activities

Production

• Production – manufacturing good and services we want.
• Factors of production:
  • Land
  • Labour 
  • Physical Capital 
  • Human Capital 

Factors of Production

• Land 
  • Land is an important asset.
  • It comes with some natural resources.
  • Natural resources like water, forest minerals.
• Labour
  • People who will do the work.
  • Some activities require highly educated people.
• Other activities require people who can do manual labour.
• Physical Capital
  • Inputs that are required.
  • Example – Machines, tools, buildings etc.
  • Raw materials and money are also considered physical capital.
• Human Capital
  • The knowledge of using available tools and resources to produce things that are sellable in market.

Physical Capital

• Fixed Capital 
• Tools, Machines, Buildings.
• Objects that are usable for many years
• Working capital
• Raw materials and money in Hand.
• Objects that are used up in production.

Needs

• Land – a production facility can’t exist if land is not available, there would be no place for activities. This includes other natural resources like water, minerals etc.
• Labour – people are required in a either to operate machines or to sow the seeds, use tractor to till the land  as far as agriculture is concerned. These people are labour.
• Physical capital – labour requires tools to do work, be it a factory or a field. Buildings, machines, simple or complex tools, money, raw materials, all are categorised as physical labour.

Human Capital

• Human capital – labour can’t keep a production facility running on its own. People who have creativity are needed. These are called Human capital.
• The knowledge to put together land, labour and physical capital and generate output. 
• This output can be for personal use or for sale in the market.

Land as a Fixed Capital

• Farming is the main activity of Palampur.
• 75 % population – Farmers 
• Population rises constantly, so waste land is converted into cultivated land.
• Now there is no waste land left. 

More Produce?

• How to produce more on the same land?
• More produce can be obtained by :
  • Using HYV seeds 
  • Using fertilizers 
  • Using modern farm machinery
  • Fallowing the land 
  • Using pesticides 
  • Proper Irrigation 

Sustainability of Land

• Land is a natural resource, so it is essential to use it carefully.
• Researches have shown that land has been overused.
• Green revolution is associated with loss of soil fertility due to use of chemical fertilizers. 

Land Distribution in Palampur

• Land is a necessity for 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.

Labour in Palampur

• Small farmers cultivate their own lands.
• Medium and large farmers hire labourers to cultivate their fields.
• Farm labourers do not have any right over the crops grown on the land. They are paid for their work which can be cash or in-kind, e.g. crop.
• Sometimes labourers get meals also. Wages vary depending on the conditions.
• Farm labourers are employed on a daily basis, or for one particular farm activity like harvesting, or for the whole year.

Farming Capital

• Modern farming methods require a great deal of capital.
• Most small farmers borrow money 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.
• The medium and large farmers have their own savings from farming. They are thus able to arrange for the capital needed.

What Happens to Surplus Products

• The wheat the farmers produce from the land is retained in part for their family consumption and they sell the surplus wheat.
• Surplus – leftover or extra product that is left after consumption.
• Only the medium and large farmers supply wheat to the market.

Non-Farm Activities

• Dairy
  • Dairy is a common activity in many families of Palampur.
  • Buffalos are fed with various kinds of grass and the jowar and bajra that grows during the rainy season.
  • The milk is sold in Raiganj, the nearby large village.
  • Two traders from Shahpur town have set up collection cum chilling centres at Raiganj from where the milk is transported to far away towns and cities.
• Production
  • Production is done on a small scale in Palampur.
  • It is mostly carried out at homes or at fields with the help of family labour.
  • Labourers are hired rarely.
• Shopkeepers of Palampur
  • Not many people are involved in Trade.
  • Shopkeepers buy goods at wholesale rates in cities and sell them in the village.
  • You will see small general stores in the village selling a wide range of items.
  • A few of the families whose houses are close to the bus stand have used a part of the space to open small shops. They sell eatables.
• Transport : a growing sector
  • A variety of vehicles can be seen on the road connecting Raiganj and Palampur.
  • Rickshaw Wallahs , tongawallah, jeep, tractor, truck drivers and people driving the traditional bullock cart and bogey are people in the transport services.
  • The number of people involved in transport has grown over the last several years.