Study Material and Notes of Ch 1 The Story of Village Palampur Class 9th Economics

Topics in the chapter

• Overview
• Introduction
• Organization of Production
• Farming in Palampur
• Non-Farm Activities in Palampur


→ A story of a hypothetical village called Palampur.
→ To introduce some basic concepts relating to production.
→ Small scale manufacturing, dairy, transport, etc. are carried out on a limited scale in the village.
→ Various resources combine to produce the desired goods and services in the village.


• Palampur is a small village, well-connected with neighbouring villages and towns like, Raiganj.

• Bullock carts, tongas, bogeys , motorcycles, jeeps, tractors and trucks types of visible transport facilities are available on the road of Palampur.

• This village has two primary  and one high school and also has a primary health centre run by the government and one private dispensary.

• About 450 different caste families are living here.

→ Out of them, 80 upper caste families have land majority in this village. One third of total population is covered by schedule caste.

• Most of the houses have electric connections.

→ Small manufacturing, transport, shop-keeping and farming are the production activities of the village Palampur.

Organization of Production

• The goal of the organization is to produce goods and services.

→ Land, labour and capital are required for production. Natural resources fulfilled the requirements of land and water.

→ For labour intensive industry, labour is required and for financial aid, capital is required.

• Physical capitals are also required for production.

 → Working Capital includes Raw materials and money in hand and Fixed Capital includes tools, machines, buildings.

• Human Capital means that labour is also required for the selling purpose.

Farming in Palampur

Farming in Palampur is based on following factor:

(i) Land is fixed
(ii) Change in the method of cultivation
(iii) Multiple cropping
(iv) Modern Farming
(v) Sustainability of land
(vi) Distribution of land
(vii) Labour
(viii) Capital
(ix) Selling of farms products

• Land is fixed

→ About 75 per cent population are depended on farming in Palampur. Land area under cultivation is fixed. There has been no expansion in land area under cultivation since 1960.

• Change in method of cultivation

→ Multiple cropping and Modern farming are the method of cultivation used in Palampur to increase the production from land.

• Multiple cropping

→ Method of multiple cropping is used in Palampur. Cultivation of different types of crops in the same piece of land at same or different time is known as Multiple cropping. For example, jowar and bajra grow during rainy season, potato is produced between October and December, wheat is produced during winter season.

• Modern farming

→ In this type of farming , high yielding varieties seeds are used. As a result same piece of land produce larger quantities of food grains. 

→ In India Farmers of Punjab, Haryana and Western Uttar Pradesh were the first to try out the modern farming method.

→ Introduction of the Green Revolution facilitated the cultivation of wheat and rice using High Yielding Variety of seeds (HYVs) instead of the traditional seeds. The HYVs are capable of producing more amount of grain on one plant.

• Sustainability of land

→ According to a scientific report, in modern farming natural resource are overused.

→ Groundwater, rivers and lakes are polluted by the way of using of chemical fertilizers.

→ Chemical fertilizers also kill bacteria and other micro-organisms in the soil which are essential for the growth of plants.

• Distribution of land

→ About one third of the 450 families are landless in Palampur.

→ 240 families cultivate small plots of land less i.e 2 hectares in size and remaining 60 families cultivate more than 2 hectares of land.

→ A few of the large farmers cultivate 10 hectares or more than 10 hectares of land.

• Labour

→ Some farmers are worked on their own land and some worked on another land for which they receive wage.

→ Wages can be in cash or in kind. Wages vary from region to region, crop to crop and one farm activity to another.

• Capital

→ Huge capital is required in the method of modern farming.

→ Small farmers have lack of capital. They borrow money from large farmers and moneylenders at higher rate of interest.

→ There are three type of capital which are mostly used in any organization i.e working capital, fixed capital and human capital.

• Selling of Farm Products

→ Surplus products are sold to medium or large farmers by the small farmers.

→ After that, medium and large farmers sell their surplus directly to the market.

→ The traders buy the products from market and sell the products to shopkeepers in the towns and cities.

Non-Farm Activities in Palampur

25 per cent of total population is engaged in non-farming activities in Palampur.

• Small-scale manufacturing

→ In Palampur, small scale manufacturing is done. Basically, the work is carried out at home or in the fields with the help of family labour. So, labour is hired rarely.

• Transporting

→ People and goods are ferried from one place to another through transporting service. For this service the worker get paid. In Palampur, road is the mode of transportation.

• Dairy

→ Dairy is a major source of earning money in Palampur.

→ Dairy is a type of business where harvesting or processing of animal milk are done mostly from cow and buffaloes.

• Shopkeeping

→ Shopkeeping is also a source of earning money in Palampur.

→ Shopkeepers earn money by selling a wide range of items like rice, wheat, sugar, tea, oil, biscuits, soap, toothpaste, batteries, candles, notebooks, pen, pencil, even some cloth. Here, shopkeeper is an individual who run the shop.

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