Factors of Production
These are land, labour, physical capital and human capital.
Land is fixed. One way of increasing production from the same land is by multiple cropping. The Green Revolution in the late 1960s introduced the Indian farmer to cultivation of wheat and rice using high yielding varieties (HYV) of seeds, chemical fertilisers, pesticides and irrigation water in Punjab, Haryana and Western Uttar Pradesh.
Farming requires a great deal of hard work. Labour can be categorised as skilled and unskilled. Agricultural labourers are landless labourers who are paid wages in cash or kind for their labour. Small farmers are those who own less than two hectares of land. Medium farmers own between two to ten hectares of land, whereas those who own over ten hectares of land are called large farmers. The minimum wage of a farm worker is fixed by the government at `60 per day. Skilled labour are those trained and educated workers who perform specific tasks requiring specific skills. Unskilled labourers are those who perform tasks not requiring specialisation, such as manual work.
Most small farmers have to borrow money to arrange for the capital. The inputs required at the different
stages of production can be classified as fixed capital and the working capital. Fixed capital such as buildings, machinery, etc. can be used for many years, whereas raw materials and money in hand constitute the working capital that is used in a single cycle of the production process.
Knowledge and enterprise constitute human capital. Population becomes human capital when there is investment made in the form of education, training and medical care. Investment in human resource (through education and medical care) can give high rates of return in the future.