Agricultural Economics :
Economics :
➡️ According to Smith "Economics is the science of wealth."
Agricultural economics:
➡️application of principal of general economic to agriculture is called as agricultural economics.
Micro economics :
➡️ Such captivities and services of consumption, production, exchange, and distribution concerned with individual unit of single industry, single farm.
Macro economics :
Macro economics deals with the whole economics set up and related addition or average ,e.g. total production, total income, total employment, total expenditure, total savings, total level etc...
Father of Agricultural Economics :
Adam Smith is known as the father of Agricultural Economics.
Factors of production :
1. Land
Anything about the earth surface which is free given by the nature and it is fixed.
2. Labour
It is active factor, without it we can't think about agricultural Economics.
3. Capital
Capital means money , and it is the part of wealth used for further regenerating wealth.
It is the passive factors.
All capital is wealth but all wealth is not capital.
4. Organisation:
It is also a important factor of production.
5. Enterprise :
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Reward of land --. Rent
Reward of labour -- wages
Reward of capital --. Interest
Reward of enterprise -- profit
Theory of Economics :
1. Theory of rent
2. Sustainable effect of price change
3. Liquidity preference theory
4. Reveled preference theory
Finance
Agricultural finance/ loan
1. Short term loan - for 1 to 1.5 years
2. Medium term loan. - for 1 to 5 years
3. Long term loan. - for 5to 30 years.
Rural credit sources.
1. Institutional :
institutional contributes about 36% of the total credit.
A. Banking institution - They finance usually for productive purpose. It includes commercial banks cooperative societies etc...
B. By government agencies :
2. Non institutional :
Non Institutional contribute about 64% of the total credit finance both for protective and unproductive purpose ,it includes professional money lender, shopkeeper, employers , friends and relatives.
Existence of banks:
Reserve Bank of India( RBI) was established in 1st April 1935 and nationalised in January 1st 1949.
Land development Bank( mortgage) was established in 1920 at Jhang( Punjab) for long term loan.
RRB-- 1975 credit to marginal small and agricultural labours.
NABARD (National bank for agriculture and rural development) was set up on 12 july 1982 with aims to funf and develop rural agriculture, it was a branch of reserve Bank of India called Agriculture Refinance Corporation(ARC).
IFCI established in 1965
CACP (commission for agricultural cost and price) established in 1985.
Nationalisation of 14 commercial bank in 19th July 1969.
Direct tax .
A tax is said to be direct tax when it is not intended to be shifted to anybody else, person who pays it is the first instance is also expected to bear it.
income tax is an example of direct tax.
Indirect tax.
Indirect tax is that tax which is is levied on goods or services produced or purchased , indirect taxes are paid by customers when they buy goods and services. This includes excise duty, customs duty etc.
Value added tax (VAT)
It is a multistage sales tax with credit for taxes paid on business purchases.
VAT seeks to tax the value added at every stage of manufacturing and sale, with a provision of refunding the amount of VAT already paid to the earliest Stage to avoid double taxation.
It has four slabs - 0% ,1% ,4% and 12.5%
One of the major advantage of VAT over sale tax is that the farmer is non-cascading.
Haryana is the first state in adopting VAT in India.
Classification of land holding groups or farmers.
A. On the basis of ownership:
1. Small - less than 4 ha. Land.
2. Medium - 4to 10 ha. land
3. Large - 10 ha. Land
B. On the basis of operational holding.
1. Marginal - less than 1 ha. Land.
2. Small - 1 to 2 ha. Land.
3. Semi medium - 2 to 4 ha. Land.
4. Medium - 4 to 10 ha. Land.
5. Large - more than 10 ha. Land.
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