Class IX Economics Chapter 1

Class IX Economics Chapter 1

The Story of Village Palampur

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Teacher's Notes Topic 1.1 : Factors of Production

Important Points Covered :

All human beings need different kinds of commodities in their day-to-day lives such as sofas, beds, tables, pens, etc.
All of these commodities are produced using inputs, also called resources. That is inputs and resources are the commodities that are used in the process of production of goods, services, and other commodities.
Any good can be considered as an input or output depending upon its nature of use. For instance, tomatoes can be used directly in the form of the salad as output or they can be used as input by a farmer to produce ketchup. Similarly, curd can be used directly for consumption or it can be used as an input or resource to convert some milk into curd or cottage cheese (paneer).
Inputs or resources are required not only to produce goods but also for producing services. For e.g., if a teacher is producing an education service, then he/she also requires various kinds of inputs such as a laptop, electricity, room, books, Wifi-connection, acumen, and skills of the teacher etc. Similarly, a Rickshaw puller requires various kinds of inputs to generate its service. such as the rickshaw itself, land, physical strength, and roads. Identically for a farmer.
For the purpose of simplification, all inputs/resources are divided into 4 categories called the factors of production which are land, labor, capital, and entrepreneur or management.
The Land factor of production is the foremost factor of production and it includes not only the physical land but also the important minerals, natural resources such as water streams, vegetation, trees, and forests where the production is being carried out. For e.g. if I have a coaching institute in Delhi, then only that particular of land in Delhi is my factor of production and not the land of Uttar Pradesh.
The Labor factor of production is a broad category that entails two further categories, viz. the laborer (human being including his knowledge and skill) and raw materials (electricity, seeds, water, manure, fertilizers). These raw materials are required again and again to carry out a new cycle of production. While some production activities require highly qualified laborers such as a teacher or a doctor, while some production activities require physical strength such as rickshaw pullers, street vendors, etc.
The capital factor of production can also be further divided into physical capital (such as machinery, tools, equipment, etc.) and construction or infrastructure such as buildings, offices, roads, dams, bridges, railway stations, airports, flyovers, houses etc.
The capital factor of production is different from the labour factor of production on essentially two counts. One, capital includes those inputs which have a life span of more than a year and can be used again and again. Unlike raw materials, they do not exhaust/expire after one round of production. Secondly, it is not easy to change the quantity and quality of capital, while labour can be changed (hired and fired) as and when desired. For e.g. during the pandemic (Covid-19) factories were shut down, laborers were fired and raw materials were not purchased. Therefore, the labor factor of production is the variable factor that can be increased or decreased according to the production levels. On the other hand, factories were still existing along with machinery (capital). Hence they are known as fixed factors of production as they cannot be sold immediately. Selling it requires finding an appropriate buyer which is time-consuming.
Entrepreneur or management is the most important factor of production that is responsible for operating, combining, and utilizing the other three factors of production which are land, labor, and capital.
In case of a self employed worker, the entrepreneur is the laborer himself. For instance if the owner of the coaching institute also teaches in his institute then he is both an entrepreneur as well as a laborer .

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Teacher's Notes Topic 1.2 : Production Sectors

Important Points Covered :

Like inputs, the output produced can also be classified into three sectors for the sake of simplicity. These are primary, secondary, and tertiary.
Primary sector is the sector where the outputs are produced using natural resources, and human and animal labor as inputs. For e.g., a farmer is producing wheat by using his own labour and that of bullocks etc. (human and animal labor) on land (natural resource). bullocks (animal labor).
The Primary sector further includes agriculture and other on farm activities called allied activities such as fishing, dairy keeping, forestry, lumbering (transport and activities involved in wood logs) poultry, beekeeping, handicrafts, etc. In India agriculture accounts for 80% of the primary sector while the allied activities account for merely 20%. In countries like Norway and Japan, with very limited availability of agricultural land this ratio is reversed. Of the three production sectors, the Primary sector is the only sector that is capable of meeting/providing all the 3 basic needs of human life that are food, shelter (wood, thatch), and clothing (silk, wool, cotton, jute). That is why it has been the largest and the most important sector (both in terms of total output produced and employment provided) since ancient times.
Secondary sector is the sector where outputs are produced using heavy machinery (also called mechanical labor) in place of human and animal labour. It is the sector where human and animal labor are minimally used as inputs or resources. A secondary sector may use natural resources but they are processed/worked upon by using machines. For instance, tomato ketchup made in factories is a part of secondary sector while that made with hands is a part of primary sector.
Secondary sector further includes manufacturing, construction, metallurgy (production using
metals), ship, building, etc. The secondary sector is mainly set up in towns and cities also includes some cottage and village industries.
The Tertiary Sector is also known as the service sector. The main difference between goods and services is that the services are intangible that is they cannot be seen or touched. Also, services need to be purchased again and again once they
are expired as services tend to finish after every round.
Tertiary sector is the sector where services are produced with human physical efforts, knowledge-related activities, and their skills as inputs. Therefore, the Tertiary sector is further divided into two categories that are low-value services and
high-value services.
Low-value services are those that mainly involve human physical labour with very less mental knowledge such as, loading, rickshaw pulling, hawking, and daily wage construction labor etc.
By contrast, High-value services are those that essentially involve mental knowledge, skills, intelligence etc.. This includes the services such as education, defense, banking, and e-commerce services.
The tertiary sector is observed in villages (teachers working at government schools), towns, and cities (consultancy
firms).
All the three sectors are interdependent on one another for the supply of inputs for the production of their output. For e.g. the clothes generated in mills (secondary sector) get their primary raw material fiber and threads from agriculture (primary sector). Therefore, drastic changes in one sector will also have an impact on the other as they are co-related to each other. For e.g. due to inadequate monsoons rice harvest fails (primary sector) thereby impacting the manufacturing and sales of snacks where rice is an essential output (secondary sector, food and beverages industry).
The relative importance of the primary, secondary, and tertiary sectors in the economy depends on the level of development of an economy. That is whether it is under-developed, developing, or developed
In an under-developed economy maximum output and employment in the country are generated by the primary sector. In a developing economy, more than 50 % of the output is produced from the secondary sector. (secondary sector>primary sector); while in a developed economy tertiary sector is the most important sector, itself accounting for approximately 80 percent of total output produced and employment generated in the country.
However, India is an exceptional case where despite being a developing economy it generates maximum output and employment through the tertiary sector (services).

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Teacher's Notes Topic 1.2ext : Production Sectors Further Analysis

Important Points Covered :

1. With the revolution in technology, all the sectors i.e. primary, secondary, and tertiary have some uses of technology in the production of goods and services. For instance, mining and quarrying and oil exploration involve working with natural resources such as natural gas, oil, minerals etc. But simultaneously they involve, using highly advanced technologies for digging and drilling the earth's crust for oil or natural gas extraction. The level of technology use is akin to that in most highly sophisticated secondary sector. Hence they are classified sometimes as belonging to primary sector or sometimes as belonging to secondary sector and at times a special sector is created between primary and secondary sector to accommodate mining querying and oil exploration

2. Every country has a different set of norms to classify the above-mentioned activities under different category. Accordingly, mining and quarrying has been classified into separate category itself different from the primary and secondary sector.

3. From the Indian perspective, according to Economic Survey 2022-23 mining and quarrying have been classified as a separate category with a 2.3% share in the total growth. Also according to the Centre for Monitoring Indian Economy Private (CMIE), mining and quarrying are classified under the category of Industry.

4. From a global perspective, according to the statistics division of the United Nations mining and quarrying is not part of the primary sector.

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Teacher's Notes Topic 1.3 : Land Reclamation and Multiple Cropping

Important Points Covered :

The village in discussion, Palampur is a relatively well-developed, rich and a large village. It houses a large number of families ie. 450 families including 80 upper cast families with huge lands. It has varied and modern means of transportation ranging from bullock carts and bogeys to motorcycles, jeeps, tractors, and trucks. There are all-weather roads (metaled) which is an indication of the developed state of the village having good connectivity with neighboring villages and towns. It has large houses made of bricks with cement plastering along with the electrical connection in all the houses and farms. An important usage of electricity is irrigation in farms (tube wells) and small businesses. For education purposes, there are two primary schools and a high school. There are both government hospitals and primary dispensaries. Along with the primary sector, there is a secondary sector (small manufacturing) and a tertiary sector (transport), shop-keeping, etc.
Farming is the main production activity in Palampur. 75 percent of people who are working are dependent on farming for their livelihood either as farmers or farm laborers. Farmers are those who have their own land while farm laborers are the ones who work on the land owned by somebody else.
Since 75 percent of the people living in Palampur depend on farm production, therefore the main aim or objective is to increase farm output. This is essential as any increase the production from the primary sector (farming and allied activities)
will also lead to the growth in the secondary and the tertiary sector, owing to interconnections between the three sectors. That is, as per-capita income increases in the village, more purchasing and transportation of goods will take place, thereby flourishing the other sectors.
An increase in agriculture output is also needed for increasing the availability of varied variety of fruits and vegetables.; for creating buffer stocks for natural disasters and calamities and also for generating export earnings.
We know that all production activities, including agriculture essentially involve the usage of four factors of production that is land,
labor, capital, and entrepreneur. In agriculture (farming) labor and the entrepreneur are the farmer themselves, who decide what crops to grow, how much fertilizers and pesticides to use, which farm implements to buy etc.
In agriculture land is the most important input (factor of production). But land is a fixed factor of production, and the total physical land of the country is fixed. Hence carrying out improvements on the existing amount of land is a priority to increase agricultural output.
The different ways through which production can be increased from fixed land are 1) Land Reclamation 2) Multiple - Cropping, and adopting HYV Technology.
LAND RECLAMATION: - Land Reclamation refers to bringing the hitherto unused, idle, waste and fallow land into use for the purpose of carrying out production. This is done by clearing land and making it fit for use. Likewise by now almost all available land in India has been brought under use. In 1950-51129 acres of land were reclaimed. A massive increase was witnessed in 1990-91, 157 acres of land were reclaimed and thereafter there was hardly any increase as already all the land was reclaimed and utilized. This has now led to stagnant cultivated areas.
Similarly in Palampur, since 1960 there has been no expansion in land under cultivation as some of the wastelands in the village had been already converted to cultivable land. There exists no further scope to increase farm production by bringing new land under cultivation.
MULTIPLE CROPPING: - In simple terms, it refer to growing of more than one crop from the same land during different seasons in a year. There is a change in crops according to the change in the season. This is the different from the earlier practice of Single Cropping, which entailed taking only one crop from a given piece of land during the entire year. For the rest of the year the land would be left fallow to recover and regain its natural fertility by the activity of microbes. One reason behind single-crop farming was that in earlier times farmers didn’t have enough money or resources to make the land cultivable and fertile again by the use of fertilizers, so that it can be used for growing crop again in a different season.
Multiple cropping helps to increase the total amount of produce and thereby farmer’s income or revenue from the same land in a year.
MULTIPLE CROPPING IN PALAMPUR: - The village Palampur is a brilliant example of Multiple Cropping. In winters (December- April) Rabi crops (crops that require cold weather to be grown and nourished such as wheat) are grown. In summers (June-September) Kharif crops (crops that require the summer season and hot atmosphere to be grown such as jowar, bajra, and rice) are grown. And during intervening months flowers, potatoes and even sugarcane are grown and harvested for the market and the neighboring sugar mills.
The main reason why farmers are able to grow three different crops in a year in Palampur is due to the well-developed system of irrigation, which in turn due to the easy access to electricity. The village was therefore able to transform the system of irrigation. However not all villages in India have such high levels of irrigation owing to the lack of availability of electricity.
Apart from riverine plains, coastal regions in our country our well irrigated. In contrast, Deccan Plateau has a low level of irrigation. Out of the total cultivated area, only 40% is irrigated (man-made methods of irrigation) and the rest farmers depend on rainfall.

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Teacher's Notes Topic 1.4 : HYV Technology

Important Points Covered :

HYV Technology is the 3^rdreform to increase agricultural production. Farming essentially began around 10,000 to 15,000 BC, prior to which men were hunters and gatherers. For faming, traditional methods were practiced, involving natural seeds, animal and human labor, manure, compost, and natural methods of irrigation (rainwater, wells, ponds, lakes, and rivers) were used as inputs.
But as population grew the world over farm output fell short, which led to frequent subsistence crisis famines and starvation deaths. Distressed by such a situation, Norman Borlaug (an American Agronomist) cum botanist) developed High Yielding Variety seeds in 1954.
The HYV seeds crop plants had short and sturdy stalk and large grain heads which Which significantly increased output per plant. But these HYV seeds could produce maximum output when they were combined with chemical fertilizers in place of compost and manure; man made sources of irrigation through tube well, and pump sets in place of natural sources of water (rain, wells, ponds, river, lakes) and chemical pesticides in place of natural pesticides. Also, there were a need to replace human and animal labor (bulls, horses, ponies, mules, etc.) by machines such as tractors, harvesters, and sprayers). This combination led to manifold increase in farm output, thus Due to this Bus ending forever ending famines and starvation deaths.
The HYV technology refers to the use of High Yielding Variety seeds for carrying out farm production. It is called a package technology because it combines the use of HYV seeds with chemical fertilizers, chemical pesticides and farm implements.
With such advancement in farming, Green Revolution (1960s-1970s) took place which led to a massive increase in the agricultural output. In India, this revolution was implemented phases. Phase 1 (the 1970s) involved 5 states Punjab, Haryana, Rajasthan, Madhya Pradesh, and Western UP with 5 crops such as rice, wheat, bajra, jowar, and maize. (1980s): From 1965-2020, production of pulses increased from 10-24 (in million tonnes) which was 2.5 times increase, and production of wheat increased from 10-97 (in million tonnes) which is approximately 10 times increase.
Palampur is a relatively well-developed village as all three methods of increasing production are practiced, viz. Land Reclamation (All the land bought into use), Multiple Cropping (crops are sown all through the year), HYV Technology (Maximum Yield) are put into use to increase the agricultural output and income of farmers. In Palampur, the yield of wheat grown from traditional varieties was 1300 kg per hectare. And with the use of HYV Technology, the yield increased by almost 2.5 times that is to 3200 kg per hectare.
Farm output is used by farmers in 3 ways that are 1) subsistence farming 2) seeds for next cultivation 3) and the output to sell in the market. The output which gets sold in the market is called marketable surplus. So with HYV technology marketable surplus increased and farmers were able to generate more income.

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Teacher's Notes Topic 1.5 : Long Term Impact of HYV Technology

Important Points Covered :

In the last 15-20 years some of the negative impacts of HYV technology have are being observed in the Indian Economy. As we know that HYV Technology is a packaged technology that requires the use of HYV seeds with a regular supply of water through irrigation and heavy quantities of chemical fertilizers and pesticides, resulting in the replacement of organic farming methods by harmful chemicals.
These chemicals are absorbed by plants, and they also seep into the groundwater, thus contaminating nearby water bodies. These also lead to a loss of soil fertility by killing natural soil microbes which maintain soil fertility by decomposing dead plant and animal matter and releasing the minerals back into the environment. These minerals are then absorbed by plants for their growth. But with use of heavy chemicals the nutrient cycle has got disrupted. The resulting loss in natural soil fertility has increased our dependence on man-made chemicals and fertilizers for restoring soil fertility, thus raising the cost of cultivation with every cycle of cultivation. The consumption of chemical fertilizers in Punjab is the highest in the country.
Also chemical fertilizers dissolve in water and are immediately available to plants. But these are not retained in the soil for long as they seep into groundwater and thereby polluting rivers and lakes.
DEPLETION OF GROUND WATER: - HYV Technology requires a heavy quantity of water for irrigation. The indiscriminate and excessive use of Tube Wells and Pump sets for drawing groundwater has depleted underground water, thereby drying up wells, lakes, and rivers. This is also causing a shortage of drinking water. According to World Resource Institute, 54% of India in 2020 faces high to extremely high water stress mainly in states such as Punjab, Rajasthan, and Gujarat.
Rise in Cancer Incidence: - With the heavy use of chemical fertilizers, groundwater is contaminated with intoxicants, and as a result, since the 1990s India has witnessed high cancer incidence and permanent disability. According to a report published in India Today on 12^th November, 2018, “Cancer incidence doubles in India in 26 years”.
Keeping this in mind there is an urgent need of another revolution where Organic Farming is promoted and new ways are explored so that chemical-free cultivation can be practiced.

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Teacher's Notes Topic 1.6 : Land Distribution in Agriculture

Important Points Covered :

Land Distribution: - Land among the farmers can be distributed in two ways either, viz. either equally or unequally. An equal distribution, of land is one in which all the farmers have equal-sized plots. By contrast, under unequal distribution of land, some farmers have very large-sized plots and some have very small plots.
Graph 1.1 of NCERT explains that the majority of the farmers (approximately 85%) in India are small and marginal farmers having less than 2 hectares of land and collectively cultivating only 44.6% of the cultivated area. On the other hand, 15% of the farmers are medium and large farmers having more than 2 hectares of land who collectively cultivate 55.4% of the cultivated area.
Also, as per the Agriculture Census of 2010-11, the majority of the Indian farmers (67.10%) are marginal farmers leading to the unequal distribution of land among Indian farmers. Besides the number of marginal and landless farmers are increasing progressively, while that of large farmers is declining correspondingly.
A major factor driving the above reasons is the increase in population and the inheritance of land from generation to generation leading to division and subdivision of landholdings. There has therefore a continuous decrease in the average size of land holding in India, which currently stands at a meagre 0-2 hectares per person.
Smaller land holdings pose a major obstacle in cultivation and that is farm mechanization (use of machines for farming in place of human and animal labour) to increase farm productivity. With the small average size of land holdings, it is not possible to carry out farm mechanization to increase farm produce, leading to lower productivity and less farm income.
What do farmers do with the harvest? Farmers retain some part of the harvest for the family consumption, one portion as seeds for cultivation in the next cycle, and the surplus is sold in the market to generate income to fulfil their other basic needs.

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