What do you mean by working capital? How does it affect the day to day activities in farming?

Dear Student,

a. Working capital refers to capital required for day to day functioning.
b
 It would include raw material, money to make payments , to buy raw materials to carry on production.

Working capital effects farming in the following manner:

a. A farmer ,requires working capital particularly under modern methods of farming. 
b. Farming under modern method requires HYV of seeds, fertilisers, pesticides, pump set, for production.

c. Thus,  a farmer needs a high amount of working capital to buy such inputs or else it effects his production activities.

d. Earlier farmers used  traditional methods of production , used traditional seeds which required less irrigation . Farmers used cow dung and other natural resources as fertilisers which were readily available and required no or very less capital to buy.


Regards

 

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