Q.

Medium and large farmers obtain capital for farming through:


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a

Savings

b

Sales of surplus

c

Interests from lending

d

All of the above 

answer is D.

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Detailed Solution

Medium and large farmers obtain capital for farming through savings, sales of surplus and interests from lending.
1)      Unlike small farmers, middle and large farmers have their savings from farming. They apply these savings as the capital needed for production.
2)      They can obtain their income from the sale of surplus produce.
3)      Large farmers using modern production methods can obtain surplus, which they sell to the traders in the market and save the earnings in the bank account.
4)      They use these savings to lend to small farmers at a high rate of interest or use it to buy fixed capital.
 
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