Limitations of the Law of Diminishing Returns

situations. There are several exceptions to law as it applies in agriculture:
(i) Improved methods of cultivation. Man’s in genuity is ever striving to counteract the operation  this law by improving the technique of cultivation.Scientific rotation of crops, improved seeds, modem implements, artificial manures and better irrigation facilities, etc., are bound t9 give increasing return. But science cannot keep pace with the increasing .mand for food. The niggardliness of nature must ulumately assert itself and the law must operate sooner or later. (ij) New soil. Again, when a virgin soil is brought  under cultivation, the additional return for each successive dose of labour and capital may increase fora time. But after a point, the tendency to diminishing returns will set in. Hence, in the case of a new soil, the
law of diminishing returns does not apply in thebeginning.

(jji) Insufficient Capital. If capital applied hitherto has not been insufficient, increased application wiU, at first, yield more than proportionate return. Later, however, the marginal return will decrease. The early stage is an exception to tlJe law of diminishing return.

How to Counteract the Law
Anything which improves the quality of the land and makes it yield more, or anything which adds to the value of the yield, will check the operation of the law. Use of modern implements, judicious mixing of soil and manures, careful selection of the seed and proper sowing, deeper and deeper tillage, and the provision of ample irrigation facilities, etc., can enable a fainer to counteract the working of the law. Scientific cultivation, in short, can check the operation of the law diminishing returns.

Application of the Law
Besides agriculture, the law also applies to extraction industries like mining, fisheries and also to building industry. The law operates when mining operations arc extended to inferior, distant or deeper mines. when fishing operations arc concentration in one place and when more and more stores arc raised on a building.

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