Class 9 Economics

Story of Palampur

Uneven Distribution of Land

In most of the villages, there is uneven distribution of land. A major portion of the land is owned by a handful of farmers, while most of the other farmers have to depend on small patches of land. Small plot of land means that the farmer may not be in a position to even meet his family needs. The landless farmers are the worst lot because they have to work on other’s land to earn a livelihood.

Problem of Migration

Farming is a seasonal occupation. For landless labourers, this means that they do not get work in certain months of the year. They often migrate to cities in search of livelihood. Many landless labourers from Bihar and Uttar Pradesh migrate to Punjab to work as farm workers. The Government had introduced the employment guarantee programme called MNREGA (Mahatma Gandhi National Rural Employment Guarantee Act). Under this programme, one member of each rural family is given 100 days employment in a year. This programme has helped in reducing the migration from many villages.

Problem of Capital

While the big farmers usually have surplus cash, the small farmers may need to borrow to buy seeds, fertilisers and farm equipments. They may go to a bank or cooperative to borrow money. But most of the time, the local merchant or moneylender comes to their rescue. Taking a loan from the local merchant and moneylender is more risky as it carries a higher rate of interest compared to what is prevalent in the banks. There are many cases, when a small farmer is unable to repay the debt on time. Such farmers often get caught in the debt trap.

Sale of Surplus Farm Produce

After the harvest, the big farmers are able to produce surplus than what they need for their family. The surplus farm produce is sold in the nearby mandi. The government also procures farm produce at an MSP (Minimum Support Price). The merchants from cities and towns purchase the farm produce from mandis in big villages. The farm produce bought by the government is stored in FCI (Food Corporation of India) godowns and used through Public Distribution System (PDS).

Non-farm Activities in Village


Many farmers rear cows and buffaloes so that they can have an extra source of income. They earn money by selling milk. Now-a-days, milk is often collected by the milk cooperatives.

Smalll Scale Manufacturing

Some people are engaged in small scale manufacturing; like making jaggery. Primitive machines are used in such activities and family members contribute in the work.


Some small shops can also be seen in bigger villages, e.g. grocery stores, cloth stores, medicine shop, etc.

Other Activities

Many people are engaged in various economic activities, like repairing shops, tuition classes, barber shop, mobile repairing shop, etc.


Some people are also engaged in transportation. Some of them ply cyclerickshaws, while some of them may be driving autorickshaws or minibuses.