Chapter-6 , Rural Development , Economics
RURAL DEVELOPMENT
IN INDIA, majority of poor people lives in rural area and around 22% of Total population still lives below the poverty line.
1.
In
last 50 years, agriculture has grown at a rate of 2.7% and in 2007-12 agricultural output has
grown at 3.2%.
2.
Agricultural
contribution in GDP has declined and industrial and service sector contribution
in GDP has increased.
All
the above facts clearly indicate that progress of India is possible only when rural
areas and rural people are developed.
RURAL
DEVELOPMENT:- Rural
development refers to continuous and comprehensive socio-economic process,
attempting to improve all aspects of rural life.
2/3rd
population of India is dependent on
agriculture, so significant development of agriculture is required . Rural
development not only involves agricultural development but all the aspects
which improves quality of life of people of rural areas.
PROCESS
OF RURAL DEVELOPMENT
Following
are the areas of rural life which need fresh initiatives for the development of
India;
1.)
DEVELOPMENT OF HUMAN RESOURCE :- The quality of human
resource needs to be improved through following measures;
a)
Proper
attention to literacy, education and skill development
b)
Better health facilities for physical growth
2.)
DEVELOPMENT OF INFRASTRUCTURE :-
It involves:-
a)
Improvement
in electricity, irrigation, credit marketing and transport facilities
b)
Better
facilities for agriculture research
3.)
LAND REFORMS :-
it includes the
following objectives:-
a)
Elimination
of exploitation of farmers Actualization of goal of 'land to tiller"
b)
Improvement
of socio economic conditions of rural poor
c)
Increasing
agricultural productivity and production.
4.) ALLEVIATION OF POVERTY:-
Around 22% population of India is still below
poverty line. So there is a need for taking serious steps for alleviation of
poverty and improvement in conditions of weaker section of society.
5.)
DEVELOPMENT OF PRODUCTIVE RESOURCES – This should be done to enhance
opportunities of employment other than farming.
RURAL
CREDIT
In
agriculture, farmers are in strong need for credit due to long time gap between
crop sowing and realization of income.
SOURCES OF RURAL CREDIT
1)
NON INSTITUTIONAL SOURCE
Like :-
1. Money Lender
2. Relatives
3. Trader and Commission
Agents
4. Rich Landlords
2)
INSTITUTIONAL SOURCE
Like :-
1.Co-operative credit
2. Land development
banks
5. Government
6. NABARD – National Bank for
Agriculture and rural development
7. SHG -Self Help Group BANK LINKAGES PROGRAMMES
NON-INSTITUTIONAL
SOURCES
Non
institutional sources have been the traditional source of agricultural credit
in India.
Non-institutional
sources are;
1.)
Money lenders - Money lenders have been advancing a major share of farm
credit. The farmers are exploited through very high rates of interest. Their
accounts are manipulated without their knowledge.
2.)
Relatives
- Cultivators
borrow funds from their own relatives in time of crisis .These loans are kind
of informal loans and carry no interest and normally returned after harvest.
3.)
Traders
and commission agents - They
provide credit to the farmers 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
and marginal farmers and tenants, take Loans from Landlords for meeting their
financial requirements. Landlords charge high rate of interest on such loans
and exploit the farmers and tenants.
INSTITUTIONAL
SOURCES
In
1969 when India adopted the institutional credit approach through various agencies,
Objectives behind this:-
1.
To provide adequate credit to farmers at cheaper rate of
interest.
2.
To assist small and marginal farmers in raising their
agricultural productivity.
Institutional
sources are :-
1.)
Co-operative credit:-
The primary objective of the co-operative credit is to liberate the Indian
farmers from the clutches of money lenders and to provide them credit at low
rate of
interest.
2.)
Land development banks:- They provide credit to farmers against the mortgage of
their land. Loans are provided for permanent improvement of land, purchasing
agricultural equipments and for paying old debts.
3.) Commercial bank credit:-
Commercial banks played a marginal role in advancing rural credit. After
nationalization 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.) 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
is as low as 6%.
6.) NABARD - NATIONAL
BANK FOR AGRICULTURAL AND RURAL DEVELOPMENT.
It is the apex bank which coordinates the functioning of different financial
institutions working for expansion of rural credit.
1. 1.Its objective is to promote health
and strength of credit institutions. Besides providing finance to credit
institutions,
2. NABARD also provides financial assistance to the non-farm
sector to promote integrated rural development and prosperity of backward rural
areas.
7.) SHG BANK LINKAGES PROGRAMMES SHG has emerged as the micro finance programme in the country in recent years.
Their focus is largely on those rural poor who have no access to the formal banking system.
2.Their target
groups comprise of small and marginal farmers, agricultural and nonagricultural
labourers, artisans, etc.
3.
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 rate of
interest, to be repaid at small installments.
4.
By May 2019
,nearly 6 crore women in India have become member in 54 lakhs women SHGs
5.
SHGs have also helped in the empowerment of
women. The borrowings are mainly for consumption purpose and little proportion
for productive purposes.
APPRAISAL
OF RURAL BANKING/ PROBLEMS FACED BY RURAL BANKING
1.)
INSUFFICIENCY
- The volume of rural credit in the country is still insufficient in comparison
to its demand.
2.)
INADEQUATE COVERAGE OF INSTITUTIONAL SOURCE - The institutional credit arrangement
continues to be inadequate as they have failed to cover entire rural farmers in
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 purpose of such loan.
4.)
LESS ATTENTION TO POOR AND MARGINAL FARMERS - Lesser attention has been given on the credit requirements of small and marginal
farmers. On the other hand, well to do farmers are getting more attention due
their credit worthiness.
5.)
GROWING OVERDUES -
The problem of overdue in agricultural credit continues to be an area of
concern. The basic reason of so much overdues is the poor repaying capacity of
farmers. Agriculture Loan default rates have been chronically high.
IMPORTANT
NOTE:-
To improve the situation; Bank needs to change their approach from being
lenders to building up relationship banking with the borrowers. Farmers should
also be encouraged to increase the habit of savings and efficient utlisation of
financial resources.
TANWA
(TAMILNADU WOMEN IN AGRICULTURE)
TANWA is a project initiated in Tamil Nadu to
train women in Latest agricultural techniques. It induces women to actively
participate in raising agricultural productivity and family income. Women are
making farm women group which acts like SHGS. Many other farm women groups are
creating savings in their group by functioning like mini banks. With the
accumulated savings they promote small scale household activities like mushroom
cultivation, soap manufacture, doll making and other income generating activities.
AGRICULTURAL
MARKETING SYSTEM
Meaning
of agriculture marketing system:-
Agricultural
marketing is a process that involves assembling, storage, processing,
transportation, packaging, grading and distribution of different agricultural commodities
across the country. Under this system, farmers can also dispose their surplus
stock at reasonable price.
PROBLEMS
FACED BY FARMERS :-
1.)
MANIPULATIONS BY BIG TRADERS :- Prior to
independence, farmers suffered from faulty measurements and manipulation of
accounts while selling their production to traders.
2.)
LACK OF MARKET INFORMATION:-Farmers were often
forced to sell at Low prices due to lack of required information on prices
prevailing in the markets.
3.) LACK OF STORAGE
FACILITY:- Farmers
did not have proper storage facilities keep their production for selling later
at better prices and thus there was lot of wastage.
so,
government intervention is necessary to regulate the activities of the private
traders
MEASURES
TO IMPROVE AGRICULTURAL MARKETING
1.)
REGULATED MARKETS
- The first measure is regulation of markets to create orderly and transparent
marketing conditions. Regulated markets have been organized with a motive to
protect the farmers from malpractices of sellers and brokers. This policy
benefited famers as well as consumers.
2.)
INFRASTRUCTURAL FACILITIES - The government aims to provide physical
infrastructure facilities like roads, railways, warehouses, cold storages, etc.
the current infrastructure facilities are quite inadequate to meet the growing
demand.
3.)
CO-OPERATIVE MARKETING - The aim of co-operative marketing is to realize the fair
price for farmers products. 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.
MILK
Co-operatives in Gujarat have been very successful in transforming social and
economic conditions of Gujarat.
BUT Co-operative marketing have received
setback because of inadequate coverage of farmer members, Lack of link between
marketing and processing cooperatives and inefficient financial management.
4.)
DIFFERENT POLICY INSTRUMENTS - In order to protect the farmers
government has initiated the
following policies
a) Minimum support
price(MSP)
- to safeguard the interest of farmers, government fixes the minimum prices of agricultural products like
wheat, rice, maize, cotton, etc. such price may be regarded as an offer price
at which govt. is willing to buy any amount of grains from the farmers.
b) Buffer stocks - THE FCI (food
corporation of INDIA) purchases wheat and rice at the procurement prices to maintain buffer stock. Buffer stock
is created in the year of surplus and is used during shortages. It helps to
ensure regularity in supply and maintaining of
prices.
c) Public distribution systems(PDS) - PDS in our country
operates through a network of Ration
shops and fair price shops. It offer essential commodities like wheat, rice,
kerosene, etc at a price below than market price to the weaker sections of
society.
NOTE:- Despite of all these
measures agricultural markets are still dominated by private traders and thus
much government intervention is necessary to protect the farmers.
EMERGING
ALTERNATE MARKETING CHANNELS
1.) ORIGIN OF FARMERS
MARKET :-
Farmers can increase their incomes if they directly sell their product to farmers. Thus, concept of FARMERS MARKET
was started to give boost to the small farmers by providing them direct access
to the consumers and eliminating the middlemen like brokers. Some examples of
these channels are;
a) APNI MANDI in Punjab,
Haryana and Rajasthan
b) HADASPAR Mandi in Pune,
c) Rythu bazaars in Andhra Pradesh
2.)
ALLIANCE WITH NATIONAL AND MULTINATIONAL COMPANIES :- Several national and
multinational fast food chains are entering into contracts with farmers. They
encourage the farmers to cultivate farms products of desired quality. They
provide farmers not only seeds but also assure purchase of output at
pre-determined prices. Such arrangements will help in reducing price risk of
farmers and farmers can expand their
markets.
DIVERSIFICATION
OF AGRICULTURAL ACTIVITIES
Need
for diversification arises because:-
(a) There is greater
risk on depending exclusively on farming for livelihood
(b) To provide
productive sustainable livelihood options to rural people.
BENEFITS
OF DIVERSIFICATION
Much
of the agricultural employment is concentrated in kharif season(autumn season
i.e. July to October), because during Rabi season (spring season i.e. October
to March), it becomes difficult to find gainful employment in those areas where
there is lack of irrigation facilities.So, diversification is essential
a)
To provide supplementary gainful employment
b)
To enable them to earn higher levels of income
c)
To enable people of rural areas to overcome poverty.
TYPES
OF DIVERSIFICATION :-
1.)
DIVERSIFICATION OF CROP PRODUCTION - It involves a shift from single cropping
system to multi cropping system. It also involves a shift in cropping pattern
from food grains to cash crops. The main aim is to promote shift from
subsistence farming to commercial farming. In India, agriculture is dominated
by subsistence farming and farmers give prime importance to cereals in cropping
system. Multi-cropping system reduces the burden of farmers to depend on one
crop because now they are engaged in growing variety of crops.
2.)
DIVERSIFICATION OF PRODUCTIVE ACTIVITIES - As agriculture is already overcrowded,
so increasing labour force needs to find alternate employment opportunities in
other non-farm areas. It would provide alternate sources of sustainable livelihood
and would raise the Level of income. Non-farm activities have several segments.
Some segments of nom farm activities possess healthy growth while others
possess low productivity. Healthy growth areas (dynamic areas) are agro
processing industries, food processing industries, Leather industry, tourism,
etc while low productivity areas are 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
breeding, rearing and caring for farm animals.
a)
Under this cattle, goats and fowls like ducks are the
widely held species.
b)
India owns one of the largest livestock populations in
the world.
c)
Livestock production provides increased stability in
income, food security, transport, fuel and nutrition for the family.
d)
This sector
provides alternate livelihood options to more than 70 million small and
marginal farmers including landless workers.
e)
In India, poultry accounts for Largest share of 58% out
of total livestock farming.
DAIRYING
:-
It
is that branch of agriculture which involves breeding, raising and utilization
of dairy animals for the production of milk and various dairy products.
a)
It is the business of producing, storing and distributing
milk and milk products.
b)
Due to successful implementation of 'OPERATION FLOOD' ,
India ranks first in the world in MILK production.
c)
It increased from 17 million tonnes in 1951 to 198.4
million tonnes in 2019-20.
d)
OPERATION FLOOD (white revolution) was started by
national dairy development board in 1970
e)
The objective was to create a nationwide milk grid
(chain) All the farmers pool their milk according to different grades and it
will be marketed to urban areas at fair prices.
f)
Gujarat state is held as a success story for implementing
milk cooperatives.
FISHRIES:-
It refers to occupation devoted to the
catching, processing or selling of fish and other aquatic animals.
a)
The water bodies (sea, oceans, rivers, lakes, natural
aquatic ponds, streams) are considered as MOTHER as they provide life giving
source to the fishing community.
b)
Recently fish
production from inland source contributes about 64% to the total fish
production and balance 36% comes from marine sector i.e sea and oceans.
c)
Total fish
production accounts for 0.8% of GDP.
d)
West Bengal,
Andhra Pradesh, Kerala, Gujarat, Maharashtra and Tamil Nadu are major fishing
states.
e)
60% of workforce in export marketing of fish and 40% of
workforce in internal marketing of fish are women,
PROBLEMS
FACED IN FISHING:-
(a) Widespread
underemployment.
(b) Low per capita
earnings
(c) Less mobility of
labour
(d) High illiteracy
rate.
HORTICULTURE
:-
It refers to the science or art of cultivating
fruits, vegetables, tuber crops, flowers, aromatic plants, spices and
plantation crops. All these crops are necessary to provide food and nutrition.
a)
Horticulture contributes nearly 1/3 of total agricultural
output and 6% of GDP of India.
b)
India is the
second largest producer of both fruits and vegetables in the world. India has
emerged as a world leader in producing a variety of fruits and no. of spices.
c)
Horticulture has increased economic conditions of many farmers.
d)
Flower harvesting, Nursery Maintenance, Hybrid seed
production, etc are highly remunerative employment options for women in rural
areas.
INFORMATION
TECHNOLOGY
:- Information technology refers to that branch of engineering that
deals with the use of computers and telecommunications to retrieve and store
and transmit information.
a)
Through
appropriate information and software tools, government has been able to predict
areas of food insecurity and to prevent the likelihood of an emergency.
b)
It also has a positive impact on the
agriculture as it circulates information regarding emerging technology and its
applications, prices, weather and soil conditions for growing different crops.
c)
It acts as a tool for releasing the creative
potential and knowledge in the society and also generates employment in rural
areas.
d)
The
main aim of this is to make every village a knowledge center where it provides
an option of employment and livelihood.
EVALUATION
OF RURAL DEVELOPMENT
The
rural sector will continue to remain backward until some changes occur, so, some
of the following changes need to be taken for development of rural sector:-
1.
STRESS ON DIVERSIFICATION - there is a need to
make rural areas more vibrant through diversification into dairying, poultry,
fisheries, vegetables and fruits.
2.
RURAL AND URBAN LINKAGE - efforts should be made to link up
rural production centres with urban and foreign markets to realize higher
returns on the investment from the production.
3.
BETTER FACILITIES - proper efforts should be made to develop
infrastructure like credit and marketing, state agricultural departments,
farmer friendly agricultural policies, etc. the aim is to achieve full
potential of the rural sector.
4.
MORE EMPHASIS ON SUSTAINABLE DEVELOPMENT - there is need to
invent eco-friendly technologies that lead to sustainable development.
ORGANIC
FARMING ( V. IMP.)
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.
1.
It is the process of producing safe and healthy food
without leaving any adverse impact on the environment.
2.
Organic farming is a whole system of farming that
restores, maintains and enhance ecological balance.
3.
There is an increasing demand for organically grown food
to enhance food safety throughout the world.
BENEFITS
OF ORGANIC FARMING;
1.
ECONOMICAL FARMING - Organic farming offers a means to
substitute costlier agricultural inputs with locally produced cheap organic
inputs
2.
GENERATES INCOME THROUGH EXPORTS - It Generates income
through international exports as demand for organically grown crops is on rise.
3.
PROVIDES HEALTHY FOOD:- It provides healthy food because
organically grown crop has more nutritional value than food produced through
chemical farming.
4.
SOURCE OF EMPLOYMENT
It generates more employment opportunities as it requires more Labour
input than conventional farming.
5.
SAFETY OF ENVIRONMENT - The produce of organic farming is
pesticide free and is produced in an environment sustainable way.
CHALLENGES
BEFORE ORGANIC FARMING;
LESS
POPULAR:-
It needs to be popularized by creating awareness and willingness on the part of
farmers for adoption of new technology. There is a need for proper agricultural
policy to promote organic farming.
LACK
OF INFRASTRUCTURE AND MARKET FACILITIES:- Organic farming faces problem of
inadequate infrastructure and marketing facilities.
LOW RETURNS:- Organic farming has a
lesser return in the initial years as compare to modern agricultural farming
and thus small and marginal farmers find difficult to adapt Large scale
production.
SHORTER FOOD LIFE:- Organic food has a
shorter life as compare to chemically sprayed food.
LIMITED CHOICE OF CROPS:- The choice in
production of off season crops is quite Limited in organic farming.
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