RURAL DEVELOPMENT

(Presented by Dr. Akhilesh Dhar Dubey)

 What is Rural Development?

Rural development is a
comprehensive term.
It focuses on action for
the development of
areas that are lagging
behind in the overall
development of the
village economy.
It is the continuous
and comprehensive
socio-economic
process of improving
all aspects of rural life.
 Areas that are lagging behind in the
overall development of rural India
• Development of Human resources
(literacy, more specifically female literacy, education
and skill development, health and sanitation)

• Land reforms
( make tiller as owner of the land)

• Infrastructure development
(electricity, irrigation, credit, marketing, transport
facilities including construction of village roads and
feeder roads to nearby highways etc.

• Special measures for poverty alleviation.

Importance of Rural Development

1. We know that About half (1/2) of the population are still

depend on agriculture.
2. After reforms, the growth rate of agriculture sector
decelerated to about 3 per cent per annum during the
1991-2012, which was lower than the earlier years.
3. The GVA growth rate of agriculture and its allied
sectors was less than one per cent.
4. One-fourth of rural India still lives in abject poverty.
5. Growing distress witnessed among farmers across
different parts of India.
6. Cottage and village industries have declined.
That is the reason why we have to see a developed
rural India if our nation has to realize real progress.
In this background we will discuss following things

Rural Credit

Agricultural Marketing

Agriculture diversification: farm and non form

activities

Organic farming
RURAL CREDIT
• The word credit literally
means faith.
• It is an arrangement by
which the lender gives
money to a borrower in
return for a promise of
repayment in future with
interest.
• Life line of farming
activities
 IMPORTANCE OF RURAL CREDIT

• It is needed to buy seeds, fertilizers,

agricultural equipment etc.
• It is also needed to meet other expenditure till
the crops are ready.
• It helps to start small scale industrial units in
village areas.
• During crop failure, it help farmers to survive
and to continue cultivation.
• It helps farmer to adopt new technology.
• It is needed to meet family expenditure during
marriage, death or religious functions.
INFORMAL SOURCES OF CREDIT
(NON INSTITUTIONAL SOURCES)
• They are not controlled or supervised by any
government agency.
• They charge very high rate of interest.
• They exploit the borrower.
• Some of them cheat the borrowers
(manipulate account)
• The borrower will fall in to debt trap.
• However, it is easy to get loans from them as
no collateral is needed.
FORMAL SOURCES OF CREDIT
(INSTITUTIONAL SOURCES)
 COMMERCIAL BANKS
• The RBI has instructed Banks to make short
term, medium term and long term loans
available to farmers.
• Kissan Credit Cards (1998) are given to
farmers. They can get short term loans using
these cards.
• It is difficult for poor farmers to get loans from
Banks.
• The Banks demand collaterals. The poor
farmers do not have anything to offer as
collaterals.
• The Banks do not consider poor farmers
credit worthy.
• Branches of Banks are not there in many
villages.
 Social banking and
multi agency approach
 Modi govt announces mega merger of
banks to boost India’s economy
•Punjab National Bank, Oriental Bank of Commerce and United Bank of
India will combine to form the nation’s second-largest lender.
•Canara Bank will join Syndicate Bank
•Union Bank of India with Andhra Bank and Corporation Bank
•Indian Bank with Allahabad Bank
•Vijaya Bank and Dena Bank were merged with Bank of Baroda
Co-operative Banks
• A co-operative bank is a
small-sized, financial entity,
where its members are the
owners and customers of
the Bank.
• Co-operative banks give
loans to the farmers at
reasonable rate of interest.
• They do not demand any
collateral security.
• They supply HYV seeds and
fertilizers to farmers.
• The educate farmers about
new methods of farming.
• They are regulated by the
Reserve Bank of India (RBI)
from 2020.
 Regional Rural Banks
AD1
• Regional Rural Banks are government owned
scheduled commercial banks of India that operate
at regional level in different states of India.
• These banks are under the ownership of Ministry of
Finance, Government of India.
• They were created to serve rural areas with basic
banking and financial services.
• RRBs were set up on 2 October 1975. Currently
there are 43 RRBs in India.
• They provide short term, medium term and long
term loans to farmers at very low interest rates.
Slide 16

AD1 (Scheduled banks are eligible for loans from the Reserve Bank of India at bank rate, and are given membership to clearing-houses.)
Akhilesh Dubey, 10-08-2023
 Land development Banks
• Land Development Banks (LDBs) are also called as
Land Mortgage Banks. It is co-operative credit
institution provides long-term loans.
• promote the development of land and increase the
agricultural production.
• The LDB provides long-term finance to members
directly through its branches.
• The first LDB was started at Jhang in Punjab in
1920.
• All land owners are eligible to become members
and borrow funds by mortgaging their land.
 NATIONAL BANK FOR AGRICULTURAL AND
RURAL DEVELOPMENT (NABARD)
• NABARD was set up in 1982.
• It is an apex body to coordinate the activities of all institutions involved in
rural credit.
• The institutions that provide credit to village people get support and help
from NABARD (refinancing agency)
• It grant long-term loans to state government for cooperative Banks.
• It inspect cooperative banks and regional rural banks.
• Promote research in agriculture and rural development
• Evaluates the projects financed by it.
Recently, Self-Help Groups (SHGs)
have emerged to fill the gap in the
formal credit system. (because Self-Help
vast proportion of poor rural
households were automatically out Groups
of the formal credit network as the
formal credit system required (SHGs)
some kind of collateral for
advancing lone which poor rural
households didn’t have.)

The SHGs promote thrift in small

proportions by a minimum
contribution from each member.

From the pooled money, credit is

given to the needy members to be
repayable in small instalments at
reasonable interest rates.
By May 2019, nearly 6 crore women in India have
become member in 54 lakh women SHGs.
Such credit provisions are generally referred to
as micro-credit programmes.
SHGs have helped in the empowerment of women.
However, it is alleged that the borrowings are
mainly confined to consumption purposes.
 Role of Micro Credit in Rural
Development
• Micro credit is provided by Self Help
Groups.
• Micro credit facility saves villagers
from the exploitation of money
lenders.
• It helps villagers to start micro
production units and earn additional
income.
• SHGs encourage saving habits
among the village people.
• The SHG can get loans from Banks
• They also contribute towards
women empowerment.
 The Poor Women’s Bank
• ‘Kudumbashree’ is a women-
oriented community-based
poverty reduction programme
being implemented in Kerala.
• In 1995 a thrift and credit society
was started as a small savings
bank for poor women with the
objective to encourage savings.
• The thrift and credit society
mobilized Rs 1 crore as thrift
savings.
• These societies have been
acclaimed as the largest informal
banks in Asia in terms of
participation and savings
mobilized.
Critical evaluation of the role of rural
banking in the process of rural
development
Rapid expansion of banking system had a positive effect on rural
farm and non-farm output, income and employment especially after
Green Revolution.
It helped farmers to avail banking services and credit facility

Variety of loans provided for meeting their productive needs

Famines become the events of past

we have now achieved food security which is reflected in the

abundant buffer stocks of grains.
Failures of
Rural Credit
System
Agricultural marketing
covers the services
involved in moving an
agricultural product
from the farm to the
consumer.
 Obstacles in the path of
Agricultural Marketing
(Problems faced by farmers while
marketing their goods)
• Traders cheat farmers by wrong
weighing and manipulation of
accounts.
• Farmers forced to sell their products
at low price to traders due to lack of
information about the price of
products.
• Farmers do not have proper storage
facilities To keep their produce and
sell it at a better price.
• Still 10% of Agricultural produce
wasted due to lack of storage
facilities.
• Most of the villages do not have
good roads.
• There are many middle men
between the farmer and the
consumer. So, farmer gets low
prices.
 Steps taken by the Government to
promote Agricultural Marketing
1. Regulated Markets:
• The Government has established
Regulated Markets in different parts
of the country.
• The sale and purchase of goods in
these markets are controlled by
Agricultural Produce Market
Committee (APMC) consisting of
representatives of Government,
farmers and traders.
• However, there is still a need to
develop about 27,000 rural periodic
markets as regulated market places
to realize the full potential of rural
markets.
2. Development of Infrastructural facilities:
The Government has taken steps to construct roads,
ware houses, cold storages and processing units to help
farmers to market their goods.
The current infrastructure facilities are quite inadequate
to meet the growing demand and need to be improved.
3. Co- operative Agricultural Marketing Societies:
Government encourage farmers to form marketing
cooperative Society for better bargaining (fair price). It
is a business organization owned by farmers to
collectively sell their products.
They collect the products and profitably market them in
towns and cities.

The success of milk cooperatives in transforming the

social and economic landscape of Gujarat (AMUL:
Anand Milk Union Limited) and some other parts of the
country is testimony to the role of cooperatives.
NANDINI is Milk cooperative of Bengaluru.
However cooperatives
have received a setback
during the recent past
due to....

1. Inadequate coverage
of farmer members.

2. lack of appropriate
link between marketing
and processing
cooperatives.

3. inefficient financial
management.
4. Policy Instruments
(i) assurance of minimum support prices (MSP) for agricultural
products.
The Government announces MSP for some agricultural crops well
before the sowing season. At the time of harvesting, if the market price
is lower than the MSP, the Government will buy those crops from the
farmer at the MSP.
Commission for Agricultural Costs & Prices (CACP) recommend MSP to
the central government. As of now, CACP recommends MSPs of 23
commodities.
(ii) maintenance of buffer stocks of wheat and rice by Food Corporation
of India
(iii) distribution of food grains and sugar through PDS.

These instruments are aimed at protecting the income of the farmers

and providing food grains at a subsidized rate to the poor.

However, despite government intervention, private traders

predominates agricultural markets. So the need for government
intervention is imminent.
5. Emerging Alternate Marketing Channels
It has been realized that if farmers directly
sell their produce to consumers, it increases
their incomes.
Some examples of these channels are
Apni Mandi (Punjab, Haryana and
Rajasthan)
Hadaspar Mandi (Pune)
Rythu Bazars (vegetable and fruit
markets in Andhra Pradesh and
Telangana)
Uzhavar Sandies (farmers markets in
Tamil Nadu).
6. Contract Farming:
several national and multinational fast food
chains are increasingly entering into contracts
with farmers to encourage them to cultivate farm
products (vegetables, fruits, etc.) of the desired
Quality.
They provide them not only seeds but other
inputs.
They also assured procurement of the produce
at pre decided prices.
It is argued that such arrangements will help in
reducing the price risks of farmers and would
also expand the markets for farm products.
 AGRICULTURAL DIVERSIFICATION
Agricultural Diversification means changing cropping
pattern or shifting the agricultural workforce into other
allied activities (livestock, poultry, fisheries etc.) and non
agricultural activities.
1. There is greater risk in depending exclusively on
farming for Livelihood.
2. Most of the agricultural employment activities
are concentrated in kharif season, in Rabi season
due to inadequate irrigation facility it is difficult to
find gainful employment.

4. soil deficiency due cropping pattern rice-wheat-

rice.
5. Sustainable livelihood in rural areas.
 Tamil Nadu Women in Agriculture
(TANWA)
Tamil Nadu Women in Agriculture (TANWA) was a project
initiated in the late 1980s in Tamil Nadu to train women in
latest agricultural techniques and in organic farming.
It encouraged women to actively participate in raising
agricultural productivity and family income.
At a Farm Women’s Group in Thiruchirapalli, run by
Anthoniammal, trained women are successfully making and
selling vermicompost and earning money from this venture.
Many other Farm Women’s Groups are creating savings in
their group by functioning like mini banks through a micro-
credit system.
With the accumulated savings, they promote small-scale
household activities like mushroom cultivation, soap
manufacture, doll making or other income-generating
activities.
ANIMAL HUSBANDRY
• Animal Husbandry is the breeding and caring of
animals such as cattle, goats and fowl.
• In India, the farming community uses the mixed
crop-livestock farming system —cattle, goats, fowl
are the widely held species.
• It provides stable income to the farmer.
• Animals help in transportation and agricultural
work.
• It provides food stability and the fuel needed for the
villagers.
• Animal waste can be used as manure.
• Today, livestock sector alone provides alternate
livelihood options to over 70 million small and
marginal farmers including landless laborer.
• A significant number of women also find
employment in the livestock sector.
Distribution of Poultry Poultry accounts for the largest share
and livestock in India with 61 per cent followed by others.
(2019) India had about 303 million cattle,
including 110 million buffaloes in 2019.
Performance of the Indian dairy sector
over the last three decades has been
quite impressive.
Milk production in the country has
increased by about ten times between
1951-2016.
This can be attributed mainly to the
successful implementation of
‘Operation Flood’ also known as White
revolution associated with Dr. Verghese
Kurien.
Gujarat, Madhya Pradesh, Uttar
Pradesh, Andhra Pradesh,
Maharashtra, Punjab and Rajasthan,
are major milk producing states
 Fisheries
• The fishing community regards the
water body as ‘mother’ or ‘provider’.
• In India, due to government effort and
introduction of new technologies in
fisheries and aquaculture, the
development of fisheries has come a
long way.
• Presently, fish production from inland Blue Revolution also called as Nili
sources contributes about 65 per cent Kranti Mission was launched in 1985-
to the total value of fish production and 1990 during the 7th Five-Year Plan.
The main objective is to develop,
the balance 35 per cent comes from the
manage, and promote fisheries to
marine sector (sea and oceans). double the farmers’ income.
• Today total fish production accounts for
0.9 per cent of the total GDP. West
Bengal, Andhra Pradesh, Kerala,
Gujarat, Maharashtra and Tamil Nadu
are major fish producing states.
PROBLEMS FACED BY FISHING COMMUNITY
A large share of fish-worker
families are poor.
1. Rampant (अ नयं त)
unemployment
2. low per capita earnings
3. absence of mobility of labour
to other sectors
4. a high rate of illiteracy
5. indebtedness

These are some of the major

problems fishing community face
today. Welfare programmes for
the fishing community have to be
reoriented in a manner which can
provide long-term gains and
sustenance of livelihoods.
Important fact....
Even though women are
not involved in active
fishing, about 60 per cent
of the workforce in export
marketing and 40 per cent
in internal marketing are
women.
There is a need to increase
credit facilities through
cooperatives and SHGs for
fisherwomen to meet the
working capital
requirements for
marketing.
Rearing of silkworms and the production of silk and silk
products is called Sericulture. It provides additional
income to the farmer.
horticulture, the branch of plant agriculture dealing with
garden crops, generally fruits, vegetables, and ornamental
plants.
Horticulture has emerged as a successful sustainable
livelihood option and need to be encouraged significantly.
 Due to varying climate and soil conditions, India has adopted
growing of diverse horticultural crops such as fruits, vegetables,
tuber crops, flowers, medicinal and aromatic plants, spices and
plantation crops.

These crops play a vital role in providing food and nutrition,

besides addressing employment concerns.

Horticulture sector contributes nearly one-third of the value of

agriculture output and six per cent of Gross Domestic Product of
India.

India has emerged as a world leader in producing a variety of

fruits like mangoes, bananas, coconuts, cashew nuts and a
number of spices and is the second largest producer of fruits and
vegetables.

Economic condition of many farmers engaged in horticulture

has improved and it has become a means of improving livelihood
for many unprivileged classes.
 Golden Revolution
The period between 1991 to 2003 is
known as the period of Golden
Revolution in India.
The Golden revolution is related to the
production of honey and horticulture. It
is a part of the important agricultural
revolutions of India.
Nirpakh Tutej is considered to be the
Father of The Golden Revolution in
India.
Flower harvesting, nursery
maintenance, hybrid seed production
and tissue culture, propagation of
fruits and flowers and food processing
are highly remunerative employment
options for women in rural areas.
 FLORICULTURE

It is a branch of Horticulture.
It is the scientific cultivation of flowers.
 Information technology
(Other alternate livelihood Option)
• The IT has revolutionized many sectors in the Indian
economy. There is broad consensus that IT can play a critical
role in achieving sustainable development and food security
in the twenty-first century.
• Governments can predict areas of food insecurity and
vulnerability using appropriate information and software
tools so that action can be taken to prevent or reduce the
likelihood of an emergency.
• It also has a positive impact on the agriculture sector as it
can disseminate information regarding emerging
technologies and its applications, prices, weather and soil
conditions for growing different crops etc.
• It also has potential of employment generation in rural areas.
• Experiments with IT and its application to rural development
are carried out in different parts of India.
The role of Non-Farm Activities in promoting Rural
Development
• Non- farming activities reduce population pressure
on land (disguised unemployment). Surplus labor in
agriculture can be used in such activities.
• They help the farmer to sell value added products
and earn higher income.
• Farmers can get themselves engaged in non-farm
activities during off season (RABI SEASON). Thus,
they solve seasonal unemployment.
• Agriculture in India depends on monsoon rains (60%
land is unirrigated). Diversification will help farmer
to earn income from non-farm activities.
• Even a loss in farming due to crop failure will not
affect the farmer much if he has some non-farm
activities also.
 Adoption of Village by Parliamentarians
• In October, 2014, The Government of India introduced a
new scheme called Saansad Adarsh Gram Yojana (SAGY).
• Under this scheme, Members of India’s Parliament need to
identify and develop one village from their constituencies.
• To begin with, MPs can develop one village as a model
village by 2016, and two more by 2019, covering over
2,500 villages in India.
• According to the scheme, the village can have a population
of 3,000-5,000 in the plains and 1,000-3,000 in the hills and
should not be MPs' own or their spouse's village.
• MPs are expected to facilitate a village development plan,
motivate villagers to take up activities and built
infrastructure in the areas of health, nutrition and
education.
 Introduction
• Conventional agriculture relies heavily on chemical fertilizers and
toxic pesticides.
• which enter the food supply, penetrate the water sources, harm the
livestock, deplete the soil and destroy natural eco-systems.
• We need eco friendly agricultural technique essential for sustainable
development, which is organic farming.
• Organic farming is a whole system of farming that restores, maintains
and enhances the ecological balance.
• It is a system of farming that uses organic inputs. Bio manure and
biological methods of pest control are used.

Organic food
Organic food is being popular across the world. Many countries
have around 10 per cent of their food system under organic
farming. There are many retail chains and supermarkets which are
permitted with green status to sell organic food. Moreover, organic
foods command higher price of around 10-100 per cent than
conventional ones.
 Benefits of Organic Farming
• Organic agriculture offers locally produced
organic inputs that are cheaper and thereby
generate good returns on investment.
• Organic agriculture also generates income
through exports as the demand for organically
grown crops is on a rise.
• organically grown food has more nutritional
value than chemical farming.
• Since organic farming requires more labor
input than conventional farming, so it has edge
on employment generation.
• The produce is pesticide-free and environment
friendly.
 Organically Produced Cotton in
Maharashtra
• In 1995, when Kisan Mehta of Prakruti (an NGO) first
suggested that cotton, the biggest user of chemical
pesticides, could be grown organically, then Director of
the Central Institute for Cotton Research, Nagpur,
famously remarked, “Do you want India to go naked?”
• At present, as many as 130 farmers have committed
1,200 hectares of land to grow cotton organically on the
International Federation of Organic Agriculture
Movement’s standards.
• The produce was later tested by the German Accredited
Agency, AGRECO, and found to be of high quality. Kisan
Mehta feels that about 78 per cent of Indian farmers are
marginal farmers owning about less than 0.8 hectare but
accounting for 20 per cent of India’s cultivable land.
• For such farmers, organic agriculture is more profitable
in terms of money and soil conservation in the long run.
 LIMITATIONS OF ORGANIC FARMING
• It requires awareness and willingness on the
part of farmers to adapt to new technology.
• Inadequate infrastructure and the problem of
marketing the products are major concerns.
• Yield from organic farming is less than modern
farming. Therefore, small and marginal
farmers may find it difficult to adapt .
• Organic products may have more blemishes
(दाग़ या ध बा) and shorter shell life.
• Choice in production of off-season crops is
quite limited in organic farming
• We do not have adequate demand for organic
products in as they are costlier.