Savita got a loan of Rs. 3,000/- from Tajpal Singh at an interest rate of 24 percent for four months, which is very high interest rate. Savita also has to promise to work on Tajpal Singh's field as a farm labourer during the harvest season at Rs. 35 per day.

As we can see, this wage is quite low. Savita knows that she will have to work very hard to complete the harvesting on her own field, and then work as a farm labourer for Tajpal Singh. The harvest time is very busy time. As a mother of three children she has a lot of household responsibilities. Savita agrees to these tough conditions as she knows getting a loan is difficult for a small farmer.

Savita’s condition would be different if she could get a loan from the bank at a low rate of interest. From Bank's loan she has not to work at such a quite low wage rate.

The difference:

(i)Medium and large farmers obtain capital for farming from their own savings or from the banks as loan.

(ii)Small farmers on the other hand borrow from large farmers or the village moneylenders or the traders, who supply various inputs for cultivation. The interest on such loans are usually high.

A farmer with one hectare of land can use multiple cropping system in his land. The other way of work is to use modern farming methods for higher yield.

I talked to some of old residents in many regions and found that before 30 years there was no irrigation facilities in this region.

Agriculture was merely depended on rain. Method of production was also traditional, there was no use of HYV techniques and hence production yield was very low.

But now-a-days in the region with the Government's efforts people use various types of irrigation methods and HYV techniques such as seeds, chemical fertilizers, pesticides etc. and production has increased many-fold in the region.