How do large farmers utilise surplus …

In the following ways, the large farmers utilize surplus farm products to accumulate the capital required for farming:

1. They used to sell their surplus product in the markets.

2. By selling their product they lent money to the small farmers on very high interest.

3. They deposit their money to get the high interest.

Most small farmers have to borrow money to arrange for the capital. They borrow from large farmers or the village moneylenders or the traders who supply various inputs for cultivation. The rate of interest on such loans is very high and these farmers are in great stress to repay the loans taken.
In contrast to the small farmers, medium and large farmers have their own savings from farming. They use this savings to arrange for next year’s capital and make high profits by selling surplus production and earning higher amounts. Sometimes, they deposit their savings in a bank or lend their money to small farmers or save their savings or buy cattle, truck or to set up shops.