RURAL DEVELOPMENT NOTES CLASS 12

SUMMARY OF THE CHAPTER

Meaning and process of Rural development
Rural credit
Sources of Rural credit.
Critical appraisal of rural credit.
Agricultural market system.
Diversification of agricultural market
Non-farm areas of employment
Sustainable development and organic farming.

WHY WE ARE TALKING ABOUT RURAL DEVELOPMENT

22 % of Indian population lives below poverty line.
Agriculture, with maximum share of rural economy, has grown at a rate of 2.7%.
More than 2/3^rd of India’s population depends upon agriculture.
Hence, real progress of India is possible only when rural people and rural areas are developed and then only India can achieve growth.

MEANING OF RURAL DEVELOPMENT

Rural development refers to continuous and comprehensive socio- economic process, attempting to increase all aspects of rural life.
As agriculture is the major source of livelihood in rural India, so development of agriculture will contribute to the betterment of rural areas and rural people.

PROCESS OF RURAL DEVELOPMENT

1. Development of Human resource:

Proper attention on literacy (especially females), education and skill development.
Providing better and affordable health facilities.

2. Development of Infrastructure:

Improving electricity, irrigation, credit, marketing, transport facilities etc.

3. Land Reforms:

Eliminating exploitation in land relations
Actualising the goal of land to the tiller.
Increasing agricultural productivity and production.

4. Alleviation of poverty :

As 22% population is below poverty line, so need for poverty alleviation.

Development of productive resources ( other than farming).

RURAL CREDIT – RURAL DEVELOPMENT NOTES CLASS 12

Why rural credit is studied? – Because rural India is too much dependent on agriculture and under agriculture there is a long time gap between crop sowing and realisation of income, so there arises a need for rural credit.
An effective and efficient rural credit delivery system is crucial for agricultural productivity and incomes.

SOURCES OF RURAL CREDIT

There are 2 sources of rural credit – (a) Institutional sources, and (b) non-institutional sources.

1.Institutional sources include –

Co-operative credit:

Primary objective of co-operative credit is to liberate peasants from clutches of moneylenders.
Interest rates are low.

2. Land development banks:

Credit is provided against mortgage of land.
Loans are provided for improvement of land, purchasing agricultural implements and for repaying old debts.

3.Commercial bank credit :

After Nationalisation of banks in 1969, they started directly financing the farmers.

4.Regional rural banks :

- Generally opened in areas, where there is no rural credit facility.
- Loans are given to peasants, marginal farmers, artisans, small entrepreneurs.

5.The Government :

Loans provided by government is known as TACCAVi and is given under tough times of rural distress, famines, floods etc.

6.NABARD :

- National Bank for Agricultural and Rural development.
- It is the apex bank which co-ordinates the functioning of different financial institutions, working for expansion of rural credit.
- Objective is to promote health and strength of rural credit institutions.

7.SHG bank linkages programme for micro finance :

- - Target group is small and marginal farmers, agricultural and non-agricultural labourers, artisans etc.
  - By march 2012, more than 43 lakh SHGs have been assisted.

Non-institutional sources includes –

Money lenders :
- Peasants were exploited by high interest
- Accounts of peasants were
Relatives:
- These loans generally carries no interest, and
- Are generally returned after
Traders and commission agents :
- They provide loans against
- Collateral is generally
- Interest rates are kept very
- Promise is made that crops will be sold to traders at low prices.
Rich landlords :
- They also charge high interest
- Such loans are also exploitative in

CRITICAL APPRAISAL OF RURAL BANKING(RURAL DEVELOPMENT NOTES CLASS 12)

Rural Banking system have benefited farmers and peasants directly or indirectly in different ways –

Farmers age receiving cheap credit
It has increased farm and non-farm output, income and employment in rural areas.

Problems faced in rural banking are :

Insufficiency : The volume of credit is still insufficient.
Inadequate coverage of institutional sources : They have failed to cover entire rural farmers of the country.
Inadequate amount of sanction : Loans sactioned are often inadequate for farmers.
Less attention to poor and marginal farmers : Due to lack of collateral, needy farmers are very often denied for loans.
Growing overdues :Reason for overdues is repaying capacity of Hence, credit agencies are becoming cautious of granting loans to farmers.

To improve the situation :

Banks need to change their approach.
Farmers should be encouraged to inculcate the habit of thrift (saving) and efficient utilization of financial resources.

AGRICULTURE MARKET SYSTEM

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

Problems faced by farmers under agriculture market system :

Manipulations by big farmers : Weighing and accounts manipulations.
Lack of market information : Farmers forced to sell at low prices due to lack of informations.
Lack of storage facilities : Even today more than 10% of goods produced gets wasted.

Measures to improve agriculture marketing :

Regulated markets :
- To protect farmers from malpractices of sellers and brokers.
- This policy benefited both farmers as well as consumers.
- However, there is still a need to develop them.
Infrastructural facilities :
- Current infrastructural facilities are quite insufficient to meet growing demands.
- Government needs to improve roads, railways, warehouses, godowns, cold storages and processing units.
Cooperative marketing :

- Cooperative marketing is a system in which the farmers pool their marketable surplus of crops and distribute the sales proceeds on the basis of each individual share.
- Eg- Milk cooperatives in Gujarat.
- Cooperative marketing benefits in various ways :

Improves bargaining powers of
Cooperative societies often have storage
Bulk transportation is done and hence cost gets
Different Policy instruments : To protect farmers, government have initiated several policies :
Minimum Support prices (MSP) : For crops such as wheat, rice, maize, cotton, sugarcane, pulses etc., government announces an offer price and it purchases at this price from ( This is done to safeguard interests of farmers).
Maintenance of Buffer Stocks : FCI purchases wheat and rice from farmers and maintains a buffer This is done to ensure regular supply of crops and stability in prices.
Public distribution system (PDS) : This system operates through a network of ration shops and fair price shops. These shops offer essential commodities at a price lower than market price.

NOTE : It is argued that farmers can increase their income if they directly sell their produce to consumers. Accordingly, Apni mandi in Punjab , Hadaspur mandi in Pune , Rythu Bazars in Andhra Pradesh, Uzhavar sandies in Tamil nadu have been started. All these are FARMERS MARKET.

DIVERSIFICATION OF AGRICULTURAL ACTIVITIES (RURAL DEVELOPMENT NOTES CLASS 12)

Reason for diversification :

There is greater risk in depending exclusively on farming for livelihood.
To provide productive sustainable livelihood options to rural people.

Types of Diversification :

Diversification of crop production ( Change in cropping pattern) :
1. Shifting from single cropping system to multi- cropping system.
2. Crop diversification will reduce the risk which arises due to crop price fluctuation and monsoon failure.
Diversification of Productive activities ( Shift of agricultural workforce from farm to non-farm activities) :
1. As agriculture is overcrowded, increasing labour force needs to find employment in non-farm activities.
2. Eg- Agro-processing industries, food processing industries, leather industry, tourism , Pottery, crafts, handlooms etc.

NON – FARM AREAS OF EMPLOYMENT

ANIMAL HUSBANDRY / LIVESTOCK FARMING:
1. It is that branch of agriculture, which is concerned with the breeding, rearing and caring for farm animals.
2. India has largest livestock population in the world ( Cattles, Goats, Duck, Goose etc. )
3. It provides stability in income, food security, transport, fuel and nutrition for family etc.

DAIRYING :
1. It is that branch of agriculture which involves breeding, raising and utilization of dairy animals for the production of milk and various dairy products processed from it.
2. Because of OPERATION FLOOD, India ranks 1^st in the world in milk production.
3. Milk production :

- - 1950 – 51 = 17 million tonnes.
  - 2006 – 07 = 102.6 million tonnes
  - 2016 – 17 = 165.4 million tonnes.

4.Operation flood / White revolution was started by National Dairy development Board (NDDB) in 1970 under expert guidance of then chairman, Dr. Verghese Kurien. The movement of massive rise in milk production in India is termed as White

FISHERIES :

Fisheries refers to the occupation devoted to the catching, processing or selling of fish and other aquatic
Fishing community regards water body as “mother”.
64% of fish production comes from inland sources and 36% comes from marine
Fish production accounts for 8% in GDP.
Problems in fishing :

1. Low per capita
2. High illiteracy and
HORTICULTURE :
1. It refers to the science or art of cultivating fruits, vegetables, flowers, medicinal and aromatic plants
2. Contributes 6% in

Great scope for women

GOLDEN REVOLUTION : It refers to the period in which there was a tremendous rise in production of agricultural products like fruits and vegetables . NIRPAKH TUTEJ is considered as father of Golden revolution in India.

INFORMATION TECHNOLOGY :
1. It refers to that branch of engineering that deals with the use of computers and telecommunications to retrieve and store and transmit
2. The aim of IT is to make every village a knowledge center, where it provides a sustainable option of employment and

SUSTAINABLE DEVELOPMENT AND ORGANIC FARMING

Conventional agriculture relies heavily on chemical fertilizers and toxic pesticides, which enters food supply, penetrate water sources, harms livestock, deplete soil quality and destroy natural eco-systems.
Organic farming is the form of agriculture that relies on techniques such as crop rotation, green manure, compost and biological pest control.

3. Benefits of Organic Farming :

Economical

Generates income through
Provides healthy food.
Safety of
Sustains soil fertility.

4. Challenges of Organic farming :

Less
Low
Shorter food
Limited choice of crops in off-season.