ACHIEVERS’ ACADEMY

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Mob. 8287821571/8750062741

CLASS – 11th
CHAPTER – 5
RURAL DEVELOPMENT
 MEANING OF RURAL DEVELOPMENT
Rural Development refers to continuous and comprehensive socio-economic
process, attempting to improve all aspects of rural life.
 In India, agriculture is the major source of livelihood in the rural sector, with more
than two-third of India's population depending on it. So, development in agriculture
will contribute to the betterment of rural areas and rural people.
 However, the term rural development includes not only agricultural development, but
it involves all those aspects, which improves quality of life of people. It aims at
improving the economic and social conditions of people living in villages.

 PROCESS OF RURAL DEVELOPMENT

1. Development of Human Resources: The quality of the human resource needs to be
improved through following measures:
 Proper attention to literacy (specifically on female literacy), education and skill
development; and
 Better and more affordable Health facilities for the physical growth and
sanitation facilities at workplaces and homes.
2. Development of Infrastructure: It involves:
 Improvement in electricity, irrigation, credit, marketing and transport facilities
 Better facilities for agriculture research and extension and information
dissemination.
3. Land Reforms: It includes the following objectives:
 Elimination of exploitation in land relations;
 Actualisation of the goal of 'land to the tiller';
 Improvement of socio-economic conditions of rural poor by widening their land
base;
 Increasing agricultural productivity and production. Agricultural Productivity
refers to output per hectare of land.
4. Alleviation of Poverty: As stated earlier, around 22% of total population is still
below the poverty line. So, there is a serious need for taking serious steps for
alleviation of poverty and bringing significant improvement in living conditions of
weaker sections.
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 5. Development of the productive resources of each locality to enhance opportunities
of employment.
 RURAL CREDIT
In agriculture, farmers are in strong need for credit due to long time gap
between crop sowing and realisation of income.
Farmers borrow from various sources to meet initial investment on seeds, fertilizers,
implements and other family expenses of marriage, death, religious ceremonies, etc.
So, credit is one of the important factors, which contributes to agricultural production.
An efficient and effective rural credit delivery system is crucial for raising agricultural
productivity and incomes.
 SOURCES OF RURAL CREDIT
There are two sources, from which the farmers can raise loans:
(i) Non-Institutional Sources
(ii) Institutional Sources
 Non-Institutional Sources
1. Moneylenders: From the very beginning, moneylenders have been advancing a major
share of farm credit. The peasants are exploited through exorbitant (very high) rates of
interest. Quite frequently, their accounts are manipulated without their knowledge.
2. Relatives: Cultivators borrow funds from their own relatives in times of crisis. These
loans are a kind of informal loans and carry no interest and are normally returned after
harvest.
3. Traders and commission agents: They provide credit to the peasants on the
mortgage of crops at high rates of interest, on a condition, that the crops will be sold to
them at low prices.
4. Rich Landlords: Small as well as marginal farmers and tenants, take loans from
landlords, for meeting their financial requirements. Landlords also charge high rates of
interest on such loans and exploit the peasants, particularly small farmers and tenants.
Informal or Non-Institutional sources of credit exploited small and marginal farmers
leading to debt-trap.
 Institutional Source
1. Co-operative Credit: The primary objective of the co-operatives is to liberate the
Indian peasantry from the clutches of moneylenders and to provide them credit at
low rates of interest.
2. Land Development Banks: They provide credit to the farmers against the
mortgage of their lands. Loans are provided for permanent improvement of land,
purchasing agricultural implements and for repaying old debts.

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 3. Commercial Bank Credit: Initially, commercial banks played a marginal role in
advancing rural credit. However, after nationalisation in 1969, they expanded their
branches in rural areas and started directly financing the farmers.
4. Regional Rural Banks: They are opened up in those areas where there are no
banking facilities. Their main objective is to provide credit and other facilities,
especially to small and marginal farmers, agricultural labourers, artisans and small
entrepreneurs in rural areas.
5. The Government: The loans provided by the government are known as taccavi
loans and are lent during emergency or distress, like famines, floods, etc. The rate
of interest charged against such loan is as low as 6%.
6. National Bank for Agricultural and Rural Development (NABARD): It is the
Apex Bank which coordinates the functioning of different financial institutions,
working for expansion of rural credit.
 Its objective is to promote health and strength of credit institutions.
 Besides providing finance to credit institutions, NABARD also provides
financial assistance to the non-farm sector, to promote integrated rural
development and prosperity of backward rural areas.
7. Self-Help Group (SHG) Bank Linkages Programme for Micro Finance: SHG
has emerged as the major micro finance programme in the country in recent years.
 Their focus is largely on those rural poor, who have no sustainable access to the
formal banking system.
 So, their target groups comprise of small and marginal farmers, agricultural and
non-agricultural labourers, artisans, etc.
 SHGs promote thrift in small proportions by a minimum contribution from each
member.
 From the pooled money, credit is given to the needy members at reasonable
interest rates, which is to be repaid in small installments.
 CRITICAL APPRAISAL OF RURAL BANKING
There are number of Problems faced by the agricultural credit structure of the
country. Some of the problems faced in rural banking are:
1. Insufficiency: The volume of rural credit in the country is still insufficient in
comparison to its demand..
2. Inadequate Coverage of Institutional Sources: The institutional credit
arrangement continues to be inadequate as they have failed to cover the entire
rural farmers of the country.
3. Inadequate Amount of Sanction: The amount of loan sanctioned to the farmers
is also inadequate. As a result, farmers often divert such loans for unproductive
purposes, which dilute the very purpose of such loan.
4. Less Attention to poor or Marginal Farmers: Lesser attention has been given on
the credit requirements of needy farmers. Due to lack of collateral such needy

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 farmers are generally rejected credit from Banks and other Institutional Sources.
On the other hand, well-to-do farmers are getting more attention due to better
credit worthiness.
5. Growing Overdues: The problem of overdues in agricultural credit continues to
be an area of concern.
 The basic reason for growing overdues is the poor repaying capacity of farmers.
As a result, credit agencies are becoming cautious of granting loan to farmers.
 Agriculture loan default rates have been chronically high. It is alleged that
farmers are deliberately refusing to pay back loans. It is a threat to the smooth
functioning of banking system and needs to be controlled.
To improve the situation:
(i) Banks need to change their approach from just being lenders to building up
relationship banking with the borrowers; and
(ii) Farmers should also be encouraged to inculcate the habit of thrift (saving)
and efficient utilisation of financial resources.
 AGRICULTURAL MARKET SYSTEM
Meaning of Agricultural Marketing
Agricultural marketing is a process that involves assembling, storage, processing,
transportation, packaging, grading and distribution of different agricultural
commodities across the country.
Agricultural marketing system is an efficient way by which the farmers can dispose
their surplus produce at a fair and reasonable price. It involves different activities for
movement of farm produce from the producer to the ultimate consumer.
Problems Faced by Farmers
 Manipulations by Big Traders: Prior to independence, farmers suffered from
faulty weighing and manipulation of accounts while selling their produce to
traders.
 Lack of Market Information: Farmers were often forced to sell at low prices due
to lack of required information on prices prevailing in markets.
 Lack of Storage Facilities: They also did not have proper storage facilities to
keep back their produce for selling later at a better price. Even today, more than
10% of goods produced in farms are wasted due to lack of storage.
Therefore, government intervention became necessary to regulate the activities of
the private traders.
Measures to Improve Agricultural Marketing
1. Regulated Markets: The first measure was regulation of
markets, to create orderly and transparent marketing conditions. Regulated markets
have been organised with a view to protect the farmers from the malpractices of
sellers and brokers. This policy benefited farmers as well as consumers.
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 However, there is still a need to develop about 27,000 rural periodic markets as
regulated market places in order to realise the full potential of rural markets.
Regulated market yards benefit farmers as well as consumers.
2. Infrastructural Facilities: The Government aims to provide physical
infrastructure facilities like roads, railways, warehouses, godowns, cold storages
and processing units. The current infrastructure facilities are quite inadequate to
meet the growing demand and need to be improved.
3. Cooperative Marketing: The aim of cooperative marketing is to realise fair price
for farmers' products. Cooperative Marketing is a system in which the farmers
pool their marketable surplus of crops and distribute the sale proceeds on the basis
of each individual share. Under this, marketing societies are formed by farmers to
sell the output collectively and to take advantage of collective bargaining, in order
to obtain better price
Cooperative Marketing benefits the farmers in following ways:
(i) It improves bargaining power of farmers as they sell their produce together
through one agency.
(ii) Cooperative marketing societies help farmers in satisfying their immediate cash
requirements by providing them credit.
(iii) Cooperative societies often have storage facilities. So, farmers are not in a hurry
to sell their produce and they can wait for better prices.
(iv) Facility of bulk transportation of agriculture produce of farmers is often cheaper
and easier.
4. Different Policy Instruments: In order to protect the farmers, the government has
initiated the following policies:
 Minimum Support Prices (MSP): To safeguard the interest of farmers,
government fixes the minimum support prices of agricultural products, like
wheat, rice, maize, cotton, sugarcane, pulses, etc. Such a price may be regarded
as an offer price, at which the Government is willing to buy any amount of
grains from the farmers.
 Maintenance of Buffer Stocks: The Food Corporation of India (FCI) purchases
wheat and rice at the procurement prices, to maintain buffer stock. Buffer stock
is created in the years of surplus production and is used during shortages. It
helps to ensure regularity in supply and stability in prices.
 Public Distribution System (PDS): The public distribution system in our
country operates through a network of ration shops and fair price shops. Fair
price shops offer essential commodities like wheat, rice, kerosene, etc. at a price
below the market price, to the weaker sections of the society.
Emerging Alternate Marketing Channels
1. Origin of Farmers Market: Farmers can increase their incomes, if they directly
sell their produce to consumers. As a result, the concept of "Farmers Market"

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 was started, to give boost to the small farmers by providing them direct access
to the consumers and eliminating the middlemen.
Some examples of these channels are:
 Apni Mandi in Punjab, Haryana and Rajasthan;
 Hadaspar Mandi in Pune;
 Rythu Bazars in Andhra Pradesh and Telangana; and
 Uzhavar Sandies (farmers market in Tamil Nadu).
2. Alliance with National and Multinational Companies: Several national and
multinational fast food chains are increasingly entering into contracts/alliances
with farmers.
 They encourage the farmers to cultivate farm products (vegetables, fruits,
etc.) of the desired quality.
 They provide them with not only seeds and other inputs, but also assure
procurement of the produce at pre-decided prices.
 It is argued that such arrangements will help in reducing the price risk of
farmers and expand the market for farm products.
In 2020, the Indian Parliament passed three Agriculture Acts to reform
agriculture marketing system. However, due to opposition by a section of
farmers, these acts were taken back in 2021.
 DIVERSIFICATION OF AGRICULTURAL ACTIVITIES
Reason for Diversification
Agriculture plays a very important role in the economic development. However, the
vast majority of rural people work on land and there is greater risk in depending only
on agriculture. The need for diversification arises because:
(i) There is greater risk in depending exclusively on farming for livelihood; and
(ii) To provide productive sustainable livelihood options to rural people.
Benefits of Diversification
Much of the agricultural employment activities are concentrated in the Kharif season.
During the Rabi season, it becomes difficult to find gainful employment in the areas
where there are inadequate irrigation facilities. So, diversification into other sectors is
essential:
 To provide supplementary gainful employment;
 To enable them to earn higher levels of income; and
 To enable rural people to overcome poverty and other troubles.
 Types of Diversification
Diversification includes two aspects:
(i) Diversification of Crop Production (Change in Cropping Pattern);
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(ii) Diversification of Productive Activities (shift of workforce from agriculture to other
allied activities and non-agriculture sectors).
Diversification of Crop Production
It Involves shift from single-cropping to multi-cropping system.
 Diversification involves a shift in cropping pattern from 'food grains to cash crops.
Basically, the main aim is to promote shift from ³subsistence farming to
commercial farming.
 In India, agriculture is still dominated by subsistence farming and farmers give
prime importance to the cereals like wheat, rice, maize, etc. in the cropping system.
 Multi-cropping system reduces the dependence of farmers on one or two crops as
they are engaged in growing a wide variety of crops.
 There is a need to encourage farmers to take up cultivation of a wide variety of
crops. It will also raise their income.
 Diversification would minimise the risk arising due to price fluctuations in the
crops. It would also reduce the risk occurring due to failure of monsoon.
Diversification of Productive Activities
As agriculture is already overcrowded, a major proportion of the increasing labour
force needs to find alternate employment opportunities in other non-farm sectors.
 It would provide alternative avenues of sustainable livelihood and would raise
the level of income.
 Non-farm Activities have several segments. Some segments of non-farm
activities possess dynamic linkages that permit healthy growth, while others are
in subsistence, low productivity propositions.
 The dynamic sub-sectors include agro-processing industries, food processing
industries, leather industry, tourism, etc.
 Those sectors which have the potential but seriously lack infrastructure and
other support, include traditional household-based industries, like pottery, crafts,
handlooms, etc.
 NON-FARM AREAS OF EMPLOYMENT
Animal Husbandry
Animal Husbandry (or Livestock farming) is that branch of agriculture, which is
concerned with the breeding, rearing and caring of farm animals.
 Livestock is defined as domesticated animals raised (generally in an agricultural
set up) to produce labour and commodities such as cattle, goats, etc.
 Under livestock farming, cattle, goats and fowls (duck, goose, etc.) are the
widely held species.
 India owns one of the largest livestock populations in the world.

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  Livestock production provides increased stability in income, food security,
transport, fuel and nutrition for the family, without disrupting other food
producing activities.
 Livestock sector provides alternate livelihood options to over 70 million small
and marginal farmers, including landless labourers.
 In India, poultry accounts for the largest share of 61%, followed by others
(camels, asses, horses, ponies and mules). India had about 303 million cattle,
including 110 million buffaloes in the year 2019.
 Dairying
Dairying is that branch of agriculture which involves breeding, raising and
utilisation of dairy animals for the production of milk and the various dairy products
processed from it.
 Dairying is the business of producing, storing and distributing milk and its
products.
 The performance of the Indian dairy sector over the last three decades has been
quite impressive.
 Due to the successful implementation of 'Operation Flood', India ranks first in
the world in milk production. India's milk production increased from 17 million
tonnes in 1950-51 to 102.6 million tonnes in 2006-07 and increased to 165.4
million tonnes in 2016-17 and to 198.4 million tonnes in 2019-20.
 Operation Flood (or White Revolution) was started by National Dairy
Development Board (NDDB) in 1970 under the expert guidance of then
chairman, Dr. Verghese Kurien. The objective of this programme was to create a
nationwide milk grid. The movement for massive rise in the milk production in
India is termed as White Revolution.
 Under the Operation Flood system, all the farmers pool their milk produce
according to different grades and same is processed and marketed to urban
centres through cooperatives. The farmers are assured of a fair price and
income.
 Gujarat, Madhya Pradesh, Uttar Pradesh, Andhra Pradesh, Maharashtra, Punjab
and Rajasthan are major milk producing states.
 Meat, eggs, wool and other by-products are also emerging as important
productive sectors for diversification.
 Fisheries
Fisheries refer to the occupation devoted to the catching, processing or selling of
fish and other aquatic animals. Fisheries sector plays an important role in the socio-
economic development of the country. In India, after progressive increase in budgetary
allocations and introduction of new technologies in fisheries and aquaculture, the
development of fisheries has come a long way.
Important Points About Fishing

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 1. Fishing Community regards water body as 'Mother': The water bodies (sea,
oceans, rivers, lakes, natural aquatic ponds, streams) are considered as 'mother' or
'provider' as they provide life-giving source to the fishing community.
2. Volume of Fish Production: Presently, fish production from inland sources
contributes about 65% to the total fish production and the balance 35% comes from
the marine sector (sea and oceans).
3. Share of Fishing in GDP: The total fish production accounts for 0.9% of the total
GDP. In India, West Bengal, Andhra Pradesh, Kerala, Gujarat, Maharashtra and
Tamil Nadu are major fish producing states.
4. Women Participation in Fishing: Even though women are not involved in active
fishing, still, 60% of the workforce in export marketing and 40% in internal
marketing are women. There is a need to increase credit facilities in the form of
cooperatives and self-house groups (SHG) for fisherwomen to meet their working
capital requirements for marketing.
5. Problems faced in Fishing: A large share of fishworker families are poor. Some of
the major problems faced by these communities include:
(i) Widespread Underemployment;
(ii) Low per capita earnings;
(iii) Absence of mobility of labour to other sectors;
(iv) High Illiteracy rate and indebtedness.

 Horticulture
Horticulture refers to the science or art of cultivating fruits, vegetables, tuber
crops, flowers, medicinal and aromatic plants, spices and plantation crops.
Horticulture plays a vital role in providing food and nutrition to the rural population. It
also addresses the problem of unemployment (particularly disguised and seasonal
unemployment) in the villages.
Important Points About Horticulture
1. Contribution: Horticulture sector contributes nearly one-third of the value of
agriculture output and 6% of Gross Domestic Product of India.
2. Share in World's Production: India has emerged as a world leader in producing a
variety of fruits, like mangoes, bananas, coconuts, cashew nuts and a number of
spices. Presently, India is the second largest producer of both fruits and vegetables in
the world.
3. Improvement in Economic Condition: Horticulture has improved economic condition
of many farmers and has become a means of improving livelihood for many
unprivileged classes too.
4. Great Scope for Women Employment: Flower harvesting, nursery maintenance,
hybrid seed production and tissue culture, propagation of fruits and flowers and food
processing are highly remunerative employment options for women in rural areas.
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5. Golden Revolution: Golden Revolution refers to the period in which there was a
tremendous rise in the production of horticultural products like fruits, vegetables, etc.
The period between 1991 to 2003 is known as the period of Golden Revolution in
India. During the period of Golden Revolution, there was rapid growth in the
production of horticultural crops such as fruits, vegetables, flowers, etc. Golden
Revolution made India a world leader in the production of mangoes, bananas, coconut
and spices. Nirpakh Tutej is considered to be the Father of The Golden Revolution
in India.
 Information Technology
Information Technology (IT) refers to that branch of engineering that deal with the use
of computers and telecommunications to retrieve and store and transmit information.
Important points about Information Technology
 Through appropriate information and software tools, government has been able to
predict areas of food insecurity and vulnerability, to prevent or reduce the likelihood
of an emergency.
 It also has a positive impact on the agriculture sector as it circulates information
regarding emerging technologies and its applications, prices, weather and soil
conditions for growing different crops, etc.
 It acts as a tool for releasing the creative potential and knowledge embedded in the
society. It also has potential of employment generation in rural areas.
The aim for increasing the role of Information Technology is to make every village a
knowledge center, where it provides a sustainable option of employment and
livelihood.
 SUSTAINABLE DEVELOPMENT AND ORGANIC FARMING
Meaning of Organic Farming
Organic farming is the form of agriculture that relies on techniques such as crop
rotation, green manure, compost and biological pest control. This method avoids the
use of synthetic chemical fertilizers and genetically modified organisms.
 Organic farming is the process of producing safe and healthy food, without leaving
any adverse impact on the environment.
 In short, organic agriculture is a whole system of farming that restores, maintains and
enhances the ecological balance.
 There is an increasing demand for organically grown food, to enhance food safety
throughout the world.
Benefits of Organic Farming

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1. Economical Farming: Organic Farming offers a means to substitute costlier
agricultural inputs (such as HYV seeds, chemical fertilizers, pesticides, etc.) with
locally produced cheaper organic inputs.
2. Generates Income through Exports: It generates income through international
exports as demand for organically grown crops is on a rise.
3. Provides Healthy Food: It provides healthy food as organically grown food has more
nutritional value than food grown through chemical farming.
4. Source of Employment: Organic farming generates more employment opportunities
as it requires more labour input than conventional farming. Due to this reason, India
has comparative advantage in organic farming because of abundance of labour.
5. Safety of Environment: The produce of organic farming is pesticide-free and is
produced in an environmentally sustainable way.
6. Sustains Soil Fertility: Organic farming improves soil fertility through the application
of organic matter inputs in the form of animal manures, compost and farmyard
manure. On the other hand, conventional farming makes use of chemical fertilizers,
which erode soil fertility.
Challenges before Organic Farming
1. Less Popular: Organic farming needs to be popularized by creating awareness and
willingness on the part of farmers, for adoption of new technology. There is a serious
need for an appropriate agriculture policy to promote organic farming.
2. Lack of Infrastructure and Marketing Facilities: Organic farming faces problems of
inadequate infrastructure and marketing facilities.
3. Low Yield: Organic farming has a lesser yield in the initial years as compared to
modern agricultural farming. As a result, small and marginal farmers find difficult to
adapt to large-scale production.
4. Shorter Food Life: Organic produce has a shorter shelf life as compared to sprayed
produce.
5. Limited Choice of Crops: The choice in production of off-season crops is quite
limited in organic farming.
Inspite of all these limitations, organic farming helps in sustainable development of
agriculture and India has a clear advantage in producing organic products, for both
domestic and international markets.

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