RURAL DEVELOPMENT

Rural Development

I s a con t inuous comprehensive

soc io-economic p rocess ,

a t tempt ing to improve a l l aspects

of ru ra l l i fe .

Cooperative marketing

Refers to a sys tem in which

market ing socie t ies a re fo rmed by

fa rmers to se l l the

ou tput co l lect ively and to t ake

advantage o f co l lect ive

bargaining.

Rural Credit

Means provision of loans special ly in product ion for

agr icul ture and non -agr icul tural sectors .

Distress Sale

I t r e fe r s to a sa le in which fa rmers are fo rced to se l l the i r su rp lus

p roduce to the money lenders o r t r aders a t lower p r ice .

Micro-finance

Micro finance is a credit scheme

extended to the poor through Self

Help Groups (SGHs)

Self Help Groups (SGHs)

T h e S e l f - H e l p G r o u p s ( S G H s ) h av e

b een s e t u p t o p r o m o te t h r i f t i n s m a l l

p r o p o r t ion s b y a m i n i mum

co n t r i bu t io n f r o m each m em b er. F r o m

t h e p o o l ed m o n ey, c r ed i t i s g i v en t o

t h e n eed y n u m b er s t o b e r ep ayab l e i n

s m a l l i n s t a l lm en t s a t r e a s o n a b l e

i n t e r e s t r a t e s . D u a l p r i c i n g - m ean s t h e

f o r m er an d i n d u s t r i a l u n i t s w e r e t o

b u y an d s e l l f i x ed q u an t i t i e s o f r aw

m at e r i a l s an d p r o d u c t s o n t h e b a s i s o f

p r i c e s f i x e d b y t h e go v e r n m e n t

Operation flood

Operat ion f lood i s a sys tem,

whereby a l l the fa rmers can poo l

thei r mi lk p roduce according to

di fferent g rading and the same i s

p rocessed and marke ted to u rban

cen ters th rough cooperat ives .

Needs of Rural Credit

• Credit facil i t ies in the rural areas have contributed a large increase in agricultural productivity and employment facil i t ies in non -agricultural sectors .

• The loans have provided in rural areas to the frames in order to purchase machineries agricultural equipments etc.

• The government had also provided long term loans which can be repaved in 15to 20 years for improvement

• Of the land , d igging Tube wel ls e tc .

• There are some loans which are provided to farmers to celebrate rel ig ious ceremonies , marr iages for set t lements of o ld loans and to support the family in case of a crop fai lure . These loans are cal led as unproduct ive loans .

Sources of Rural Credit

• Non- ins t i tu t ion Sources : - These a re the t r ad i t ional sources o f ag r icu l tura l c red i t in Ind ia . They inc lude money lenders , r e la t ives , t r aders , commiss ion agen ts and l and lo rds .

• Ins t i tu t iona l Sources : - They a re cooperat ive cred i t , l and development banks , commerc ia l banks , r eg ional ru ra l banks , govt . , se l f -help g roups . Nat ional Bank fo r Agr icu l tura l and Rura l Deve lopment (NABARD), es tab l ished in 1982.

Role of micro-credit in meeting credit requirements of the poor. M i c r o c r e d i t r e f e r s t o c r e d i t a n d o t h e r f i n a n c i a l s e r v i c e s p r o v i d e d t o t h e p o o r t h r o u g h S e l f H e l p G r o u p s ( S H G s ) a n d n o n g o v e r n m e n t o rg a n i s a t i o n s . T h e S e l f H e l p G r o u p s a r e p l a y i n g a c r u c i a l r o l e i n me e t i n g t h e c r e d i t r e q u i r e m e n t s o f t h e p o o r b y i n c u l c a t i n g s a v i n g h a b i t s a mo n g t h e r u r a l h o u s e h o l d s . T h e i n d i v i d u a l s a v i n g s o f ma n y f a r me r s a r e p o o l e d t o g e t h e r t o me e t t h e f i n a n c i a l r e q u i r e me n t s o f t h e n e e d y me mb e r s o f t h e S H G s . T h e me mb e r s o f t h e s e g r o u p s h a v e b e e n l i n k e d wi t h t h e b a n k s . I n o t h e r wo r d s , S H G s e n a b l e t h e e c o n o mi c a l l y p o o r i n d i v i d u a l t o g a i n s t r e n g t h a s p a r t o f a g r o u p . A l s o , t h e f i n a n c i n g d o n e t h r o u g h S H G s r e d u c e s t r a n s a c t i o n c o s t s f o r b o t h t h e l e n d e r s a n d t h e b o r r o we r s . T h e N a t i o n a l B a n k f o r A g r i c u l t u r a l a n d R u r a l D e v e l o p me n t ( N A B A R D ) p l a y e d a k e y r o l e i n p r o v i d i n g c r e d i t a t s p e c i a l c o n c e s s i o n a l r a t e s . P r e s e n t l y, mo r e t h a n s e v e n l a k h s S H G s a r e o p e r a t i n g a c r o s s d i f f e r e n t r u r a l a r e a s . S H G s ’ p r o g r a m m e s a r e b e c o mi n g p o p u l a r a mo n g t h e s ma l l a n d ma rg i n a l b o r r o we r s o wi n g t o t h e i r i n f o r m a l c r e d i t d e l i v e r y me c h a n i s m a l o n g wi t h mi n i m u m l e g a l f o r ma l i t i e s .

Human Capital Formation

Rural areas lack quality human capital .

Therefore, rural development

programmes should aim at

development of human resources by

investing in education, technical

skills development through on -the-job

training, health care, etc.

Key issues in rural development

Development of Productive Resources

Productive resources help in generating employment opportunities. In rural areas, the main occupation is agriculture that usually suffers from low productivity, lack of infrastructure and disguised unemployment. Thus, rural development must aim at development of alternative sources of occupation. Development of productive resources reduces excess burden on the agricultural sector, thereby, increasing productivity and income of the rural people.

Development of Rural Infrastructure

Infrastructure development is a very crucial issue at the micro level. It provides a support system to all the production activities in the economy, the absence of which makes economic growth and social development impossible. Development of rural infrastructure includes development of bank, credit societies, electricity, means of transport, means of irrigation, development of markets, facilities for agricultural research, etc.

Land reforms

Land reforms along with technical reforms must

be initiated in the rural areas. These enable the

use of modern techniques and methods,

thereby, increasing the productivity and

aggregate volume of farm output. In addition,

land reforms lead to efficient and optimum use

of land, enabling large scale production.

Lessening Poverty

Poverty i s one of the main causes of rural underdevelopment . Poverty i s not a problem in i t sel f ; in fact , i t g ives r i se to many other in ter related problems l ike unemployment, infer ior human capi tal , underdevelopment and backwardness, inequali t ies , e tc . An impor tant s tep that should be taken in order to tackle t poverty i s to develop incomeearningassets . Such assets would generate income, raise l iv ing s tandards and make rural people sel f -suff ic ient .

Agricultural Marketing System

Agricultural marketing

Is a process which involves assembling,

storage, processing, transportation,

packaging, grading and distribution of

different agricultural commodities

across the country.

Measures to Improve Agricultural Marketing

• Regulated Markets:- The first measure was regulation of markets, to create orderly and transparent marketing condition. This is organized in order to protect farmers from malpractices of sellers and brokers.

• Cooperative Marketing:-Marketing societies are formed by farmers to sell the output collectively and to take advantages of collective bargaining , for obtaining a better price. Cooperatives are not functioning properly in a recent past due to inadequate coverage of farmer members and processing cooperatives and also inefficient management.

• Infrastructural facilities:- Govt. had also provided infrastructural facilities like roads, railways, warehousing, cold storage and processing units.

• Standardization and Grading:- Grading And quality control helps farmers to get good price for quality products produced by them.

• Minimum Support Price:- To safeguard the Interest of the farmers the government fixes the minimum support price for agricultural products like wheat, rice, maize, cotton, sugarcane, pulses etc. the government willingly will buy any amount of grains from the farmers at a price higher than the market price in order to help them recover their loss. This is normally done by good cooperation of India & the Government in turn will supply these products in public distribution system against BPL & APL card.

Defects of Agricultural Market in India

• L a c k o f s t o r a g e f a c i l i t y f o r f o o d g r a i n a n d c r o p s h a s d a ma g e d t h e p r o d u c t s e i t h e r b y r a t s o r i n s e c t s o r d u e t o r a i n .

• D i s t r e s s S a l e : M o s t In d i a n f a r me r s a r e p o o r a n d t h e y h a v e n o c a p a c i t y t o w a i t f o r b e t t e r p r i c e . T h e y s e l l t h e c o mmo d i t i e s a t w h a t e v e r t h e p r i c e a v a i l a b l e i mme d i a t e l y. A s a r e s u l t t h e y g o f o r d i s t r e s s s a l e o f t h e i r o u t p u t , t o t h e v i l l a g e mo n e y l e n d e r s o r t r a d e r s f o r p o o r p r i c e .

• L a c k o f t r a n s p o r t a t i o n a s a r e s u l t f a r me r c a n n o t r e a c h n e a r l y ma n d i s t o s e l l t h e i r p r o d u c e a t a f a i r p r i c e .

• L o n g c h a i n o f mi d d l e ma n o r i n t e r me d i a r i e s b e t w e e n t h e c u l t i v a t o r a n d t h e c o n s u me r w i l l a l s o r e d u c e t h e p r o f i t o f t h e p r o d u c e r.

• T h e r e a r e a l s o o t h e r d e f e c t s l i k e l a c k o f i n s t i t u t i o n a l f i n a n c e , l a c k o f g u i d i n g e t c . . T h i s ma k e s In d i a n ma r k e t i n g s y s t e m d i s o rg a n i z e d

Remedial measures for improvement of agricultural marketing

• Extension of storage facilities at the farm level and storage and warehousing facilities in the markets and consumption centers.

• Establishments of regulated markets.

• Improvement of transport facilities between the village and the mandis.

• Establishment of cooperation marketing societies.

• Provision of cheap credit, especially from institutional sources.

• Provision for grading of the produce to ensure good quality to the consumers and better prices for the producers.

• Prompt supply of marketing information

Alternative channels available for agricultural marketing

The small and marginal farmers, selling their product through the middlemen, were exploited by these middlemen. The farmers were not given appropriate price for their product. In this context; there arose a need for an alternative marketing channel. Under this channel, the farmers can sell their product directly to the consumers that would fetch them comparatively higher price, thereby, attractive profits.

Diversification of Agricultural Activity

• Diversification of crop production:- This involves shift from single cropping system to multiple cropping system. This also involves shifting cropping pattern from food grains to cash crops. The main aim is to promote shift from subsistence farming to commercial farming.

• Diversification of Productive Activities:-As agricultural is already overcrowded the major portion of the increasing labour force needs to find alternate employment opportunities in other non-farm sectors. This will provide alternate sustainable livelihood and would raise the level of income.

Role of IT Industries in the development of agriculture

• Information Technology has revolutionized many sectors in Indian economy. There is a broad agreement that IT will play critical role in achieving sustainable development and food security in the 20th century.

• Through proper information and software tools, govt. has been able to predict area of food insecurity and vulnerability to prevent or reduce the livelihood of an emergency.

• It also has a posture impact on the agricultural sector as it circulate information regarding technologies and its application prices, weather and soil condition for growing different crops.

• This has increased the knowledge about agriculture..

• The aim for increasing the role of information technology is to make ever village a knowledge Centre, where IT provides a sustainable option of employment and livelihood

Organic Farming

• Organic farming is the process of

producing food naturally.

• This method avoids the use of

synthetic chemical ferti l izers and

genetical ly modified organisms.

• It is very eco-friendly and very

essential for sustainable development.

It has a zero impact on environment.

Advantages of Organic Farming• It substitutes costlier agricultural inputs such as HYV seed,

Chemical fertilizers, pesticides etc. locally produced organic

inputs, which are cheaper and thereby generate good returns

on Investments.

• It generates income through export as the demand, for

organically grown crops are on the raise.

• It provides healthy food as organically grown food has more

nutritional value than food grown through chemical farming.

• It can provide more employment opportunities in India as it

requires more labourers for production than chemically

produced goods.

• Organic food is a pesticide free and is produced in an

environmentally sustainable way.

Limitations of Organic Farming

• Organic Farming offers lesser yield than the conventional farming. Therefore, the productivity of the Organic Farming is lower than that of the conventional farming.

• The popularity of organic farming depends on the awareness and willingness of the farmers to adopt this technology. Due to lower productivity, farmers lack initiative to adopt Organic Farming techniques.

• The inadequate infrastructure and problem of marketing are the major concerns that need to be addressed to promote Organic Farming.

• As Organic Farming offers lesser yield than conventional farming, this farming is not financially viable for the small and marginal land-holdings farmers.

Problems faced by farmers during the initial years of organic farming

In the initial years, it has been observed that the yields from Organic Farming are lesser than the modern agricultural farming. So, the farmers found it difficult to undertake large scale production. Also, due to the low yield per hectare, this technique was not financially viable for the small and marginal workers. The products obtained from organic farming have shorter life and are quickly-perishable. Moreover, the choice in production during off-season is quite limited in Organic Farming.

Importance of Animal Husbandry

Animal husbandry is the most important non-farm employment in India. It is also known as Livestock Farming. Poultry, cattle and goats/sheep are the important components of livestock farming in India. Most of the rural families carry out livestock farming together with crop farming in order to increase their income.

Importance of Fisheries

Fisheries are an important source of livelihood in the coastal

states such as Kerala, Maharashtra, Gujarat and Tamil Nadu.

The fishing community in India depends on water bodies- both

inland and marine water bodies. Inland sources include rivers,

lakes, ponds, and streams, while, the marine sources include

seas and oceans. The increasing efforts by the state

governments have attracted funds in this sector, boosting the

production. But this community remains one of the backward

communities in the country due to low per capita earnings,

lack of labour mobility to other sectors, illiteracy and

indebtedness. Despite a significant segment engaged, this

sector contributes only 1.4% to Indias total GDP.

Importance of HorticultureHorticulture is emerging as an important source of livelihood in

the rural areas. Horticultural crops include fruits, vegetables,

medicinal and aromatic plants and flowers. Presently, India is

the second largest producer of fruits and vegetables that

includes mangoes, bananas, coconuts, cashew nuts and variety

of species. There has been a considerable rise in the income

levels of families engaged in horticultural production. The

increase in horticultural production has lowered the

vulnerability of small and marginal farmers. This has provided

a gateway of opportunities for employment for women. It

generates employment for 19% of India’s total labour force. In

contrast to fishing, Horticulture does not suffer from

ecological and environmental problem. Hence, horticulture

must be promoted with sufficient investment and

infrastructure.