SIGNIFICANCE OF RURAL DEVELOPMENT

NO PYQs
NEED FOR RURAL CREDIT

DEFICIENCY OF RURAL CREDIT

Alternative Marketing Channels:

FISHERIES

HORTICULTURE

Problems of Animal Husbandry, Fisheries &

Horticulture

***RBI & RURAL CREDIT: 1935 (TGS BF)

05 RURAL DEVELOPMENT

Rural development means as action plan for the social and economic growth of rural areas.

CHALLENGES

LINGERING EMERGING
CHALLENGES CHALLENGES

RURAL RURAL DIVERSIFICATION ORGANIC

CREDIT MARKETING OF PRODUCTION FARMING
ACTIVITIES‘
 SOURCES OF RURAL CREDIT

INSTITUTIONAL NON INSTITUTIONAL

Government. Landlords
Cooperatives Village Traders.
Commercial Banks Moneylenders.
Regional rural banks
ADVANTAGES OF RURAL CREDIT

1969: Nationalisation: Social Banking.

1982: NABARD: Rural credit organised.
Liberating farmers from debt trap.
Commercialisation of agriculture.
 MICRO CREDIT PROGRAMMES AND SELF HELP GROUPS

Small loan to individuals enabling them to become self employed by establishing small enterprises.
Informal credit delivery mechanism.
SHG:- One such programme to promote saving habit.
50 Lakhs SHGs, 6 crore women members.
 ROLE OF SELF HELP GROUP / MICRO CREDIT PROGRAMMES

1. FINANCIAL INCLUSION:
SHG encourage small, regular savings among rural people, and ensure timely, low interest
loans for livelihood, health, education, and emergencies.
2. WOMEN EMPOWERMENT:
Most SHGs consist of women- boosting their confidence, decision making power and
leadership skills. It also promotes gender equality and social recognition.
3. POVERTY REDUCTION & LIVELIHOOD GENERATION:
SHGs promote micro-entrepreneurship- like dairy, poultry
, tailoring, food processing, etc. Hence it helps in increasing
household income.
4. RISK SHARING & SOCIAL SECURITY:
SHG members help each other during crisis- natural disasters,
illness, financial emergencies etc.
JAN DHAN YOJANA

Jan-Dhan Yojana: Under this yojana, all the adults are encouranged to open bank account.
1-2 lakh accidental insurance.
10000 overdraft facility.
No minimum balance.
 II. AGRICULTURAL MARKETING

GATHERING PROCESSING GRADING PACKAGING

SELLING &
STORING
DISTRIBUTING
NEED FOR STATE INTERVENTION:
Distress Sale – Holding capacity of farmers was almost zero, due to which they had to sell
their products immediately after harvest, no matter how low the market price is.

Repayment of loan - Taken Loan from moneylenders ( who were traders and commission
agents), farmers were obliged to sell their crop to them only.

Low Price - Due to the faulty weighing, manipulation of accounts,

lack of storage facilities, farmers used to get low prices.

Lack of Information - Farmers lacked the required information

about prices prevailing in the market.
MEASURES:
[Link] Markets:
Regulated markets were established where sale and purchase of goods were monitored by
the Market Committee, comprised of representatives of government, farmers and traders.

Market System is made transparent with strick vigil on the use of proper scales &
weights.
 [Link] of Physical Infrastructure –
Physical infrastructure includes transport facilities & storage facilities.
Better transport facilities enable farmers to sell their produce at locations offering lucrative price.
Better storage helps farmers to sell their produce at a time when the market price is lucrative.
 2.
[Link] Agri. Marketing Societies:
As members of these societies, farmers find themselves better bargainers in the market, getting better
price of their produce through collective sale.

Milk Cooperatives in Gujarat are brilliant example of cooperative marketing in rural India.

Shortcomings:
poor coordination between marketing cooperatives and processing cooperatives
Financial management of the cooperatives.
Policy Instrument –
These includes 3 components:
Minimum Support Price (MSP)
Maintainence of Buffer Stock by Food Corporation of India
Distribution of food grains through Public Distribution System (PDS)
 III. AGRICULTURAL DIVERSIFICATION & MARKET RISK

Re-allocation of some of farm’s productive resources into new activities or crops, reducing market risk.

CROP PRODUCTION PRODUCTION ACTIVITY/ EMPLOYMENT

Animal
Husbandry Horticulture
poultry
cattle Fisheries
sheep
Importance of Animal Husbandry:
→
Milk Production: 1951–2016 Milk production 10 times increased due to Animal Husbandry.
-Result of Operation Flood
Source of income and livelihood: Animal Husbandry acts as a supplementary income for farmers,
especially small & marginal farmers.
Employment generation: Animal Husbandry creates direct jopbs in dairy, poultry, goatry, etc.
These are more beneficial for women employment in India as majority of livestock activities are
manages by rural women.
Nutritional Security: Supplies protein-rich food like milk, eggs, and meat.
Operation Flood – 1986:
White Revolution
System by milk cooperatives
Collective sale of milk
Raises market value
Epicentre in Gujarat
Non-farm area of income generation
States: Gujarat, MP, UP, AP, MH, Punjab, Rajasthan
 IT AS AN OPTION OF LIVELIHOOD IN RURAL AREAS

India – Knowledge economy

→ →
Contribution in growth Human capital > Physical/Financial capital
IT Sector Helps:
Farmers to
– Predict prices,
– Predict Weather,
-- Predict soil
Government to:
– Predict food insecurity,
– Predict vulnerability.
 IV. ORGANIC FARMING

System of farming that restores, maintains, and enhances ecological balance

Discarding chemical fertilizers
Focus on soil health rather than plant health
10% of food system under organic farming.
A lot of food system under organic farming
→
To promote it retail chains and supermarkets are awarded with green status
WHY ORGANIC FARMING?????
TRICK: Healthier SIDE
Healthier & tastier food
Sustains soil fertility
Inexpensive technology for small & marginal farming
Discard use of non-renewable resources
Environment friendly.

LIMITATION

Lesser yield
Not cost efficient
Unattractive
 [Link] Yield
Organic farming does not use chemical fertilizers, pesticides, or high-yield hybrid seeds.
Because of this, crop production is generally lower compared to conventional farming.
2. Not Cost Efficient
Due to the lower yield, the cost of production increases, and hence increases the prices of
organic food.
3. Unattractive
There is less demand for organic farming because the crops are not that attractive in
comparison to the conventional crop productions.