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06_RURAL DEVELOPMENT

 

 

 

 

ECONOMICS (CLASS-XI)

 

Chapter-6

Rural Development

 

RURAL DEVELOPMENT

Rural development means actions for the development of the areas that are lagging behind in the overall development of village economy.

It includes the areas like

  • Development of human resource
  • Land reforms
  • Development of productive resource of each economy.
  • Infrastructure development

 

AGRICULTURAL CREDIT

 

Agricultural credit means capacity to buy physical inputs needed for agricultural production. Credit requirement of Indian farmers is mainly of two types of resources- productive and non productive resources.

 

Need for agriculture credit or finance

 

  • LONG TERM CREDIT – It is required for permanently acquiring the assets. It is for a period of 5 to 20 years.
  • MEDIUM TERM CREDIT _ it is required for 1 to 6 years for digging wells, machinery etc.
  • SMALL TERM CREDIT – It is required for buying seeds, tools, manure, fertilizers. It is required for the time period of 6 to 12 months.

 

 

SOURCES

 

  • Non – institutional sources or informal sources→ Non – institutional sources like money-lenders, landlords and village traders used to meet the credit requirement of farmers. The farmers were exploited by such sources.  These sources could not meet the medium and long term requirements. Money lenders have an unhealthy effect on agriculture sector because-
  1. They intend to exploit labor
  2. They charge high rate of interest.
  3. They acquire land on the failure to pay loan and interest.
  4. They manipulate activities.
  • Institutional Sources or formal sources → It includes government co-operative, commercial bodies and regional rural banks. It includes the following

(A) Co-operative credit societies- In 1904, co-operative credit societies act was adopted. It provide adequate credit at reasonable rate of interest to meet the financial requirement of the agriculturists and provide assistance in raising crops, objectives are →

  1. To ensure timely flow of credit to farmers.
  2. To eliminate the money lenders from rural areas.

It has two separate wings

(A)       Primary agriculture credit society B) land development banks

(B)       State Bank of India & Commercial Bank → the commercial banks through their branch expansion programme helped agriculturists by providing direct finance and through co-operative and other credit societies. It provides loans as direct and indirect advances.

(C)       Regional Rural Banks → The main purpose of setting the RRB’s was to provide an adequate and cheaper rural credit So that they could reach the remote rural areas in backward district to provide credit to the farmers.

They have been able to achieve the major objective of helping the weaker section of the rural area. These banks have been successful due to the loans at low rate of interest and high rate of interest on deposits.

(D)       National Bank for agricultural and rural development (NABARD)

Its main functions are →NABARD is an apex institute set up to establish a better coordination among the various agencies of rural credit. It takes up all the matters, economic policy, planning and operations in the field of credit for agriculture and other economic activities in the rural areas as well.

  • To serve as a refinancing agency for the institutions providing investment and production credit for providing the various developmental activities in the rural areas
  • It undertakes the monitoring and evaluation of projects refinanced by it.
  • To make measures towards improving the credit delivery system including monitoring and formulating rehabilitation schemes and restructuring of credit institution, training of personnel etc.
  • Coordinate the rural financing activities of all the institutions engaged in development work with government of India, state government, Reserve bank and other national level institutions concerned with policy formulation

(E)       SHG (self help group) And Micro credit programme

It involves contribution from each member. From the pooled money credit needs are fulfilled. The members have to repay the amount in small installments with lower rate of interest. The borrowings are mainly for consumption purposes.

AGRICULTURAL MARKEING

It is a process that involves the assembling storage, processing, transportation, packaging, grading and distribution of different agricultural commodities across the country.

Defects of Indian agricultural marketing before independence

  • Presence of large number of middleman like brokers, wholesalers, retailers etc. – Middlemen exploit both farmers and consumers. It is observed that there is a big difference between the price released by farners and price paid by consumer.
  • Prevalence of malpractices in the mandies. – Broker takes undue advantage of the ignorance and illiteracy of the farmers. They use unfair means to cheat them.
  • Absence of warehousing facilities. – Government has opened very few warehouses with scientific technique for storing their produce. The cultivators are forced to sell their products immediately after harvest.
  • Lack of grading system. – There is no organized agency to classify the products of the farmers in different grades and fix the price accordingly.
  • Lack of adequate finance- Banks and co-operative societies are not able to meet the credit needs of the farmers.
  • Inadequate means of transport and communication- Most of the village roads are not fit for motor vehicle. The produce has to be carried on slow bullock carts on slow journey.

 

Measures adopted

 

  • Regulation of markets to create orderly and transparent marketing conditions. This policy benefited formers as well as customers.
  • Provision of physical infrastructure facilities like roads, railways, warehouse, go downs, cold storage and processing units. At present, these infrastructure facilities are inadequate and need to be improved.
  • Co-operative societies helped farmers in realizing fair prices for their products.
  • Some policies were adopted like →
    • Assistance of minimum support price (MSP)
    • Maintenance of buffers stocks of wheat and rice by Food Corporation of India.
    • Distribution of food grains and sugar through PDS.

 

These policies aimed at providing the income of the farmers and providing food grains at reasonable rates to the poor.

 

AGRICULTURAL DIVERSIFICATION →

 

Diversification means the major proportion of increasing labour force in the agriculture sector needs to find alternative employment n the other non farm sector.  It has two main aspects

  • CROP DIVERSIFICATION-It emphasize on horticulture like Fruits, vegetables, spices, Indian herbs etc and floriculture. It would help in generating employment, Improving economic conditions of farmers, enhancing exports
  • SHIFT OF WORKERS FROM AGRICULTURE TO OTJER ACTIVITIES-it would reduce the burden of population on agriculture and reduces the problem of disguised unemployment and underemployment in our agriculture sectorit would reduce the burden of population on agriculture and reduces the problem of disguised unemployment and underemployment in our agriculture sector

 

NEED

  • There is a greater risk in depending exclusively on farming for livelihood.
  • To provide sustainable livelihood options to the rural people.
  • To provide supplementary gainful employment and in realizing higher level of income for rural people to overcome poverty.

 

VARIOUS ACTIVITIES IN AGRICULTURE DIVERSIFICATION

 

  • AGRO – PROCESSING INDUSTRIES – It includes food processing, leather industry etc. It provides healthy growth to rural areas.  Other sector which has the potential but lock the infrastructure includes industries like crafts.
  • Animal Husbandry – It includes livestock forming system like cattle, goats, and fowl. It provides increased stability in income, food security, transport, fuel and nutrition for the family.
  • Fisheries – It also provide a source of income to the rural sector. The water bodies consisting of sea, ocean, rivers etc are therefore a life giving source to fishing community.
  • Horticulture – It includes the crops such as fruits, vegetables, flowers, spices etc. These crops play a vital role in providing food and nutrition besides addressing employment concerns.  It has been estimated that sector provides employment to around 19% of the total labour force.  It can be extended by investment in infrastructure like electricity, cold storage system marketing technology improvement.
  • Other livelihood option – It played an important role in many sectors of Indian economy. It has the potential of emp0loyment generation in the rural areas.  It has a positive impact on agriculture sector as it provides information regarding emerging technologies.

 

ORGANIC FARMING

Organic farming or agriculture is a whole system of farming that restores, maintains and enhances the ecological balance.  It is an eco-friendly technology. When farming is done with the use of organic manure, bio- fertilizers and organic pesticides, it is called organic farming.

 

Benefits

  • Organic farmers do not use synthetic chemicals, which are petroleum based. Petroleum is a non-renewable resource.
  • Organic fields have more nutrition’s in soil.
  • Organic fields have more biological activity and bio-diversity.
  • Organic crop production rates changes over time.
  • Organic soil fertility increases over time.
  • Organic crops have higher level of vitamins.

 

Disadvantages

  • Organic products are more expansive
  • Organic farming is more work-intensive.
  • Organic farmers periodically lose all of a large portion of crops to pests.

 

Problems faced by organic farmers

  • Popularizing organic farming requires awareness and willingness on the part of farmers to adapt to the new technology.
  • Inadequate infrastructure and the problems of marketing the products are major concerns.
  • Yield from organic farming is less than modern agricultural farming in recent years.
  • Organic products may have a shorter life than sprayed products.
  • Production of off-season crop is limited in organic farming.

 

 

 

 

 

 

 

 

 

 

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