RURAL DEVELOPMENT

05

RURAL DEVELOPMENT

Rural Development:
Rural Development refers to a situation in which an individual is unable to fulfill the basic
necessities of life. In other words, it is the ability of a individual to fulfill the minimum
requirement of life like food, clothing, shelter, education and health facilities etc.

It is a continuous and comprehensive socio-economic process trying to improve all the

aspects of rural life.

In other words, Rural development is a comprehensive term which essentially focus on

action for the development of area which is lacking behind in the overall development of
village economy.

The overall development of rural economy comes under rural development.

Such as:

• Development of human resources.

• Development of infrastructure.
• Land reforms.
• Poverty Alleviation program etc.

Agricultural credit:
It refers to the credit for the farming. Due to involvement of long time period and uneven
distribution of land, credit becomes the lifeline of Indian agriculture.

Sources of Agricultural credit:

There exist 2 types of sources which provide agricultural credit in rural areas.

• Non institutional sources

• Institutional sources

Non-Institutional sources: It is the most common source of rural credit.

• Money lenders
• Zamindar
• Sahukar
• Relatives
• Trades

Merits of taking credit from Non institutional sources:

(1)
 RURAL DEVELOPMENT
05

• No legal formalities are required.

• Loan is provided anytime.
• Ease in taking 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.

Institutional 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 Bank etc.
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 level and focus on
the credit requirements of the weaker sections of the societies.
• NABARD (National Bank for Agriculture and Rural Development): It is an apex
bank in agricultural and rural credit (established in 1982). The bank has been
entrusted with the matters concerning policy, planning and operations in the field
of credit for agricultural and other economic activities in rural areas of the country.
The basic objective of this is to promote the strength of agricultural credit in rural
areas.
• Self help groups (SHGs): Self help groups are small groups of poor people. They
help each other to solve their problems. SHGs promote small savings among their
members. The savings are kept with the bank with the name of the self help groups.
Later on this common fund is used to give small loans its [Link] government
also provides partial financial assistance to SHGs.

Agriculture marketing:
Indian farmers always faces the problem of selling their products in the market at the
right price. The basic deficit they face is the problem to market their products, and hence
the requirement of agriculture marketing arises. Agriculture marketing is a process that
includes assembling, storage, processing transportation, packaging, grading and

(2)
 RURAL DEVELOPMENT
05

distribution of different agriculture commodities across the country.

In other words, it includes the services involved in moving the agricultural products from
farm to the ultimate consumer.

A good 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:

• Lack of storage facility

• Lack of effective transportation in rural areas
• Lack of marketing information in farmers
• Lack of adequate finance
• Inadequate communication

Measures taken for agriculture marketing:

• Regulated market: It is a type of market which was established by the government

of India for transparency in buying and selling of agriculture commodities. The
buying and selling of commodities under this market is monitored by the
committee which includes the representatives of government, farmers and traders.
It is established just for protecting farmers from fraud by middleman and to provide
them adequate 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 output collectively and to take
advantage of collective bargaining in order to get better price for the crops.
• Minimum support price (MSP): In order to give better price and to increase the
incentive for producing agriculture products the government of India gives
minimum support price to the farmers for their crops. It can be treated as the offer
price by the government to the farmers for 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).
• Subsidized transport: In order to promote and strengthen agriculture in the
economy, the government introduced subsidized transport system for the farmers.
Railway offer low rate transport to the farmers for bringing their produce to the
urban markets where 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,

(3)
 RURAL DEVELOPMENT
05

performance etc. Products of different qualities should be separated into groups

and similar quality products are put into a Grading and quality helps the farmers to
secure more price for better quality of products and to earm more. Example-
different grades of rice are Basmati, Arborio, Brown, Jasmine, White etc.

Diversification of Agricultural activities:

Due to huge amount of rise and sole dependence of rural areas on agriculture there exist
a need to diversify the agricultural activities.

Diversification refers to the shift from crop farming to other areas of production for
employment; It raises the level of income and reduces the heavy rise. Finding livelihood
away from crop farming becomes more important when it is realizes that crop farming
sector is overburdened.

It has 2 aspects:

• Diversification of crop production: It refers to changing the single cropping system

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

Sustainable development and organic farming: The development of our present

generation without hampering the development of future generation is known as
Sustainable Development.

Organic farming:

It is a process of producing food naturally; under such farming the use of chemical
fertilizers and highly yielding variety of seeds is totally prohibited.

It is an eco-friendly method of cultivation which brings Sustainable development in the

country.

(4)
 RURAL DEVELOPMENT
05

In other words, it a type of farming system in which the total farming restores, maintain
and enhance the balance of ecological system.

This method of farming 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)

• It is a less expensive method because of use of traditional technique of production.
• Increases the level of income, as the demand for organic products is increasing
rapidly in international market.
• It provides healthier and tastier food.
• 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.

Summary:
• Development of human resources
• Development of infrastructure
• Land reforms
• Poverty Alleviation program etc.
• Agricultural credit
• Sources of Agricultural credit
• Non institutional sources
• Institutional sources
• Agriculture marketing
• Defects of agriculture marketing
• Lack of storage facility
• Lack of effective transportation in rural areas
• Lack of marketing information in farmers
• Lack of adequate finance
• Inadequate communication
• Measures taken for agriculture marketing
• Regulated market
• Co-operative agriculture marketing societies
• Minimum support price (MSP)
• Subsidised transport

(5)