Chapter6 Rural

Development
all the
socio-economic process trying to improve
a continuous
and comprehensive
It is
aspects of rural life. essentially focuses
which
is a comprehensive term
In other words, Rural Development in the overall
of area which is lacking behind
on for the development
action

development of village economy.

rural development.
rural economy comes under
The overall development of
Such as

Development of human resources

Development of infrastructure

Land reforms
etc
Poverty Alleviation program

Agricultural credit
involvement of long time period and u n e v e n
refers to the credit for the farming. Due to
It
becomes the lifeline of Indian agriculture.
distribution of land, credit

Sources of Agricultural credit

agricultural credit in rural areas.
There exist 2 types ofsourceswhich provide
Non Institutional sources
1
2. Institutional sources

1. NonInstitutional sources
rural credit
It is the most c o m m o n source of
It includes

Money lenders
Zamindar
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 Sahukar
Relatives
Trades
Merits of taking credit from Non Institutional sources
No legalformalities are required
Loan is provided anytime
Easeintaking loan
Demerits of taking credit from Non Institutional sources
High rate of interest
Exploitation of farmers
Farmers were forced to sell their products to the lenders at low
price

nstitutional sources
It refers to organizations which are
legally meant to provide credit.
Co-operative credit societies
They provide adequate credit to the farmers at reasonable rate of interest
They also provide directions in agricultural operations to the farmers so that they can
increase their productivity
Commercial banks
It is an
institution which performs the functions of accepting
deposit, granting loans
and making investment, with the aim of
earning profit.
Example:-SBI (State Bank of India), PNB (Punjab National Bank), Canara Banketc.
The government realized that agricultural credit needs cannot be solely met by
cooperative credit societies and commercial banks should play an important role
Regional rural bank (RRB)
These banks are set up to promote credit facilities in rural and
backward areas of the
country
They operate at district levels and focus on the credit
sections of the societies
requirements of the weaker
NABARD (National Bank for Agriculture and Rural
Development)
It is an Apex bank in agricultural and rural credit
(established in 1982)
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 and
with the matters concerning policy, planning
The bank has been entrusted
for agriculture and other economic activities in rural
operations in the field of credit
areas of the country.
credit in rural
The basic objective of this is to promote
the strength of agricultural
areas

Selfhelpgroups (SHGs)
Self help groups are small groups of poor people. They
help each other to solve their
their members. The savings are kept
problems. SHGs promote small savings among
with the bank with the name of the self help group.
Later on this common fund is

used to give small loans its members.

to SHGs
The government also provides partial financial assistance

Agriculture marketing
the market at the
Indian Farmers always faces the problem of selling their products in
market their product, and hence
right price. The basic deficit they face is the problem to
the requirement of agriculture marketing arises
Agriculture marketing is a process that includes assembling, storage, processing
commodities
transportation, packaging, grading and distribution of different agriculture
across the country.
In other words, it includes the services involved in moving the agricultural products from
farm to the ultimate consumer
Agood marketing system is essential to mobilize the surplus agricultural products (food
grains and raw materials ) to feed urban populations and industries

Defects of agriculture marketing

Lackof storage facility

Lack ofeffective transportation in rural areas

Lack of marketing information in farmers

.Lack of adequate finance
Inadequate communication

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 Measures taken for agriculture marketine

Regulated market which was established by

the government of India for
market
It is a type of commodities. The buying and
in buying
and selling of agriculture
transparency which
under this market is monitored by the committee
commodities
selling of established
representatives of government, farmers and traders. It is
includes the
and to provide them adequate
just for protecting farmers from fraud by middleman
price for their commodities
Co-operative agriculture marketing societies
It refers to the type of marketing societies are formed by
the farmers to sell the
in order to get
output collectively and to take advantage of collective bargaining
better price for the crops.
Minimumsupport price (MSP)
In order to give better price and to increase the incentive for producing agriculture
to the farmers for
products the government of India gives minimum support price
farmers for
their crops. It can be treated as the offer price by the government to the
their crops. The government purchases the products from the farmers at Minimum
support price and stores it in the godowns of Food Corporation of India (FCI)

Subsidised transport
In order to promote and strengthen agriculture in the economy, the government
introduced subsidized transport system for the farmers. Railway offer low rate
markets where
transport to the farmers for bringing their produce to the urban
they may get a better deal.
Public distribution system
Concept of ration shops and fair price shops operates the public distribution system
in the economy. Fair price shops offer essential commodities like rice, wheat,
pulses, kerosene etc, at a lower price to the financially lower sections( below
poverty line) of the societies.
Standardization and grading
Grading is the process of dividing the products into different lots which have similar
characteristics in shape, size, type, quality, performance etc. Products of different
qualities should be separated into groups and similar quality products are put into a
grade.
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 farmers to secure more price for better
Grading and quality controls helps the
to earn more.
quality of products and
are Basmati, Arborio, brown, jasmine, white etc
Example-different grades ofrice

activities
Diversification of Agricultural
there exist
of rural areas on agriculture
amount of rise and sole dependence
Due to huge
agricultural activities
a need to diversify the
for
refers to the shift from crop farming to other areas of production
Diversification livelihood
the level of income and reduces the heavy rise. Finding
employment; raises
It
that crop farming
becomes more important when it is realized
away from crop farming
sector is overburdened.

It has 2 aspects

1. Diversification of crop production

into multi-cropping system.
It refers to changing the single cropping system
the basic agenda of
Earlier a single foodgrain is produced on a piece of land;
from food grains to cash crops
diversifying this is to change the cropping pattern
1 in a year.
Multi-cropping refers to production of more than crop
are now engaged
It decreases the dependence offarmers on one or 2 crops they
as

in production ofvariety of crops

2. Diversification of productive activities

Due to overburden of crop farming sector, major portion of the increasing
workforce were given employment opportunities in non farming sectors.

Non-farming primary sector includes

Animal husbandry ( includes breeding, caring and rearing of farm animals,
like cattle's, goats, duck etc)
Fisheries (includes catching, processing and selling of water animals)
Horticulture ( includes cultivation of fruits, vegetables flowers, medicinal
plants etc)
(the revolution connected to horticulture is known as golden revoluhion)

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 Sustainable development and organic farming
without hampering the development of
The development of present generation
our

known as Sustainable
development
future generation is

Onganic Farming
use of chemical
It is a producing food naturally; under such farming the
process of
fertilizers and high yielding variety of seeds is totally prohibited.
in the
It is an eco-friendly method of cultivation which brings Sustainable development

country.
maintain
In other words, it is a type of farming system in which the total farming restores,
and enhance the balance of ecological system
This method offarming is very popular across the globe, many countries produces around
10% of their food output through organic farming

Benefits of organic farming

Eco-friendly system of production

(Due to non involvement of fertilizers)
Itis a less expensive method because of use oftraditionaltechnique of production
Increases the level of income, as the demand for organic products is increasing
rapidly in international market
I t provides healthier and tastierfood
Provides more employment opportunities as it is labour intensive

Labour intensive technique

It refers to the technique which requires large amount of labour to produce the goods
Labour force
It refers to the actual number of people available for work

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