Theory:

     “Are there any farms in the city?” he asked Jaya.
 
     She laughed and thumped her stick on the ground. “Farms! There are no farmers here. We are ragpickers.”

     “Ragpickers?”

     “See my sack? Full of things I collected.”

     “Collected? From where?” asked Velu.

     “From rubbish bins, where else?”

     “You collect rubbish?” Velu had never heard of such a thing
 
     “Ayye, blockhead. It’s not any rubbish. Only paper, plastic, glass, such things. We sell it to Jam Bazaar Jaggu.”
Explanation:
 
Velu had experience in looking after the farmlands and grazing cows. So he asked Jaya, “Are there any farms in the city?” On hearing that, Jaya started laughing, and she began to dig the sand with her stick. Later on, Jaya answered him there were no farms and fields in this city. They were ragpickers, not farmers.

After hearing the term "ragpicker", Velu was amazed because he had never heard this name before in his life. Velu asked her about ragpicker. Jaya's job was rag picking. People who collect garbage from dust bins and dumps are called ragpickers. Jaya opened her bag and showed it to Velu. Inside the bag, there were paper, plastic, and glass, and Jaya collected them from the dustbins.

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Ragpickers
 
Velu had many questions in his mind. He asked Jaya why she was collecting rubbish. Jaya called him stupid and said she was not collecting waste; she collected only the plastic bags and glass items left out in the dust bins. Jaya would sell these items to Jam Bazaar Jaggu.
 
Meanings of the difficult words:
 
S.No
Words
Meanings
1
BlockheadA stupid person
2
RagpickersA person who collects garbage from dustbins and dumps
3
Thumped Hit or strike heavily, especially with the fist or a blunt implement
Reference:
National Council of Educational Research and Training (2008). It so happened. Children at work- Gita Wolf, Anushka Ravishankar and Orijit Sen (pp. 7-16). Published at the Publication Division by the Secretary, National Council of Educational Research and Training, Sri Aurobindo Marg, New Delhi.