RURAL DEVELOPMENT (Chapter – 6)

• INTRODUCTION

• WHAT IS RURAL DEVELOPMENT ?

 Rural Development is a comprehensive term, which focuses on action
for the development of areas that are lagging behind in the overall
development of the village economy.
Some of these areas include:
 Development of human resources including literacy, education & skill
development, health ,etc.
 Land reforms
 Development of the productive resources of each locality
 Infrastructure development like electricity, irrigation, credit, marketing,
transport facilities, facilities for agricultural research & extension , etc.
 Special measures for alleviation of poverty and bringing about
significant improvement in the living conditions of the weaker sections
of the population emphasizing access to productive employment
opportunities.
 CREDIT IN RURAL AREAS
 As the time gestation between crop sowing and realization of income after production is
quite long, farmers borrow from various sources to meet their initial investment on seeds,
fertilizers, implements and other family expenses.
 At the time of independence, money lenders & traders exploited small & marginal
farmers & landless labourers by lending them on high interest rates and by manipulating
the accounts to keep them in a DEBT-TRAP.
 Major change occurred after 1969 – India adopted social banking & multi-agency
approach to adequately meet the needs of rural credit.
 NABARD was set up in 1982 as an apex body to coordinate the activities of all institutions
involved in the rural financing system.
 The structure of rural banking consists of a set of multi-agency institutions, namely,
commercial banks, regional rural banks, cooperatives & land development banks.
 Major aim – to dispense adequate credits at cheaper rates.

 Recently Self-Help Groups (SHGs) have emerged to fill the gap in the formal credit system.
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
installments at reasonable interest rates. Such credit provisions are generally referred to
as micro-credit programmes. They have also helped in the empowerment of women.
 (Also Refer to Box-6.1 on Pg-102 – The Poor Women’s Bank)
 RURAL BANKING – A CRITICAL APPRAISAL
• PROS
 Positive effect on rural farm and non-farm output, income & employment,
especially after green revolution.
 Helped farmers to avail services & credit facilities & a variety of loans for
meeting their production needs.
 With food security and buffer stock of grains, famines became events of the
past.
• CONS
 Failed to develop a culture of deposit mobilisation – lending to worthwhile
borrowers & effective loan recovery.
 Chronically high agriculture loan default rates – 50% of the defaulters were
categorized as ‘willful defaulters’.
 Less attention to poor or marginal farmers.
 Inadequate amount of loan sanctioned & failed to cover entire rural farmers.
 AGRICULTURAL MARKET SYSTEM
• MEANING
Agricultural marketing is a process that involves the assembling, storage, processing, transportation,
packaging, grading and distribution of different agricultural commodities across the country.

• PROBLEMS FACED BY FARMERS PRIOR TO INDEPENDENCE

 Farmers suffered from faulty weighing & manipulation of accounts.
 Farmers were often forced to sell at low prices as they did not have the required information on prices.
 Farmers did not have proper storage facilities to keep back their produce for selling later at a better price.

• FOUR MEASURES INITIATED BY THE GOVT. TO IMPROVE AGRICULTURAL MARKETING

 Regulation of markets to create orderly & transparent market conditions.
 Provision of physical infrastructure facilities like roads, railways, warehouses, godowns, cold storage and
processing units.
 Cooperative marketing in realizing fair prices for farmers’ products. (Success of milk cooperatives in
Gujarat.)
 Policy instruments like :
 Assurance of minimum support prices (MSP) for 24 agricultural products.
 Maintenance of buffer stocks of wheat and rice by Food Cooperation of India.
 Distribution of food grains and sugar through Public Distribution System (PDS).
These policy instruments are aimed at protecting the income of the farmers and providing food grains
at a subsidized rate to the poor.

EMERGING ALTERNATE MARKETING CHANNELS

 DIVERSIFICATION INTO PRODUCTIVE ACTIVITIES
• Diversification includes two aspects:
1) Diversification of crop production (shift from single-cropping system to multiple
cropping-system) and
2) Shift of workforce from agriculture to other allied activities like livestock, fisheries,
poultry, etc. and non-agricultural sector.
• NEED FOR DIVERSIFICATION
 To reduce the risk in depending exclusively on agriculture and farming for livelihood.
 To provide productive sustainable livelihood options to rural people.
• Benefits of Diversification:
Since most of the agricultural activities are concentrated in the
Kharif season, it becomes difficult to find gainful employment in the
Rabi season in areas where there are inadequate irrigation facilities.
So diversification into other sectors is essential:
 To provide supplementary gainful employment.
 To enable them to earn higher levels of income.
 To enable rural people to overcome poverty and other troubles.

AGRO - PROCESSING INDUSTRIES, food processing industries, leather industry, tourism, etc.
Household-based industries like pottery, crafts, handloom, etc.
(Also refer to Box – 6.2 on Pg- 107 – TANWA)
 ANIMAL HUSBANDRY
• ANIMAL HUSBANDRY is that branch of agriculture which is concerned with the breeding, rearing
and caring of farm animals. ( It is also called livestock farming.)
• Under it, cattle, goats, fowl (duck, goose, turkey, etc.) are widely held species.
• Livestock production provides increased stability in income, food security, transport, fuel &
nutrition for the family without disrupting other food producing activities.
• This sector provides alternate livelihood options to over 70 million small and marginal farmers,
including landless labourers.
• A significant no. of women also find employment in the livestock sector.
• In the distribution of livestock in India, poultry accounts for the largest share with 42%
followed by others. Other animals which include camels, asses, horses, ponies, & mules are in
the lowest rung. (Refer to Chart 6.1 on Pg 107.)

• PROBLEM : Though in terms of numbers , India’s livestock population is quite impressive but its
productivity is quite low as compared to other countries.
• REQUIREMENT :
 This sector requires improved technology and promotion of good breeds of animals to enhance
productivity.
 There is requirement of improved veterinary care and credit facilities by small and marginal
farmers and landless labourers. This would enhance sustainable livelihood options through
livestock production.

• Meat, eggs, wool and other byproducts are also emerging as important productive sectors for
diversification.
 ANIMAL HUSBANDRY - DAIRY FARMING
• DAIRY FARMING is that branch of agriculture which involves breeding, raising & utilization
of dairy animals for the production of milk & the various dairy products processed from it.
• Dairy Farming is the business of producing, storing and distributing milk and its products.
• Performance of the Indian dairy sector over the last three decades has been pretty
impressive.
• Milk production in the country has increased by more than eight times between 1951-2014
and this can be attributed mainly to the successful implementation of ‘Operation Flood’.

• Operation Flood / White Revolution :

 It was started by National Dairy Development Board (NDDB) in 1970 under the expert
guidance of the then chairman, [Link] Kurien. The objective of this programme is to
create a nationwide milk grid.
 It is a system whereby all the farmers can pool their milk produce according to different
grading, which is based on quality, and the same is processed and marketed to urban
centres through cooperatives. In this system, the farmers are assured of a fair price and
income from the supply of milk to urban markets.
 Gujarat state is held as a success story in the efficient implementation of milk cooperatives.
It has been followed by many states.
 Due to the successful implementation of ‘Operation Flood’, India ranks first in the world in
milk production.
 FISHERIES
• Fisheries refer to the occupation devoted to the catching , processing or selling of fish and other aquatic
animals.
• Fishing community regards water body as ‘mother’ or ‘provider’ as they are an integral and life-giving
source for the fishing community.
• Fisheries sector plays an important role in the socio-economic development of the country.
• The development of fisheries has come a long way in India after progressive increase in budgetary
allocations and introduction of new technologies in fisheries and aquaculture.
• Presently fish production from inland sources contributes about 64% to the total value of fish production&
the balance 36% comes from marine sector.
• Presently total fish production accounts for 0.8% of the total GDP.
• In India, West Bengal, Andhra Pradesh, Kerala, Gujarat, Maharashtra and Tamil Nadu are major fish
producing states.
• PROBLEMS FACED IN FISHING :
 There is rampant and widespread underemployment in this sector.
 There are low per capita earnings in this sector. A large share of fish-worker families are poor.
 There is absence of mobility of labour to other sectors.
 There is a high rate of illiteracy & indebtedness among the fishing community.
 There is lack of credit facilities and welfare programmes for the fishing community.
 There are also problems related to over-fishing and pollution.
• Even though women are not involved in active fishing, about 60% of the workforce in export marketing
and 40% in internal marketing are women.
• There is a need to increase credit facilities through cooperatives & SHGs for fisherwomen to meet their
working capital requirements for marketing.
• Problems related to over-fishing and pollution need to be regulated and controlled.
• Welfare programmes for the fishing community have to be reoriented in a manner which can provide long-
term gains & sustenance of livelihoods.
 HORTICULTURE
• It is the science of cultivating fruits, vegetables, tuber crops, flowers, medicinal and aromatic plants
spices and plantation crops.
• These crops play a vital role in providing food and nutrition, beside addressing employment
concerns.
• India has adopted horticulture as it is blessed with a varying climate and soil conditions.
• This sector contributes nearly one-third of the value of agricultural output & 6% of GDP of India.
• The period between 1991-2003 is known as ‘Golden Revolution’ because during this period, the
planned investment in horticulture became highly productive & the sector emerged as a sustainable
livelihood option.
• India has emerged as a world leader in producing a variety of fruits like mangoes, bananas,
coconuts, cashew nuts and a number of spices & is the second largest producer of fruits and
vegetables.
• Horticulture has improved the economic condition of many farmers & it has become a means of
improving livelihood for many unprivileged classes.
• Flower harvesting, nursery maintenance , hybrid seed production and tissue culture, propagation of
fruits & flowers and food processing are highly remunerative employment options for women in
rural areas.
• Horticulture has emerged as a successful sustainable livelihood option and it needs to be
encouraged significantly.
• REQUIREMENT : Enhancing the role of this sector requires, investment in infrastructure like
electricity, cold storage systems, marketing linkages, small-scale processing units and technology
improvement and dissemination.
 OTHER ALTERNATE LIVELIHOOD OPTIONS
• Information Technology (IT) refers to that branch of engineering that deals
with the use of computers and telecommunications to retrieve and store
and transmit information.
• The IT has revolutionised many sectors in the Indian economy. There is a
broad consensus that IT can play a critical role in achieving sustainable
development and food security in the 21 st century.
• Govt. 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 agricultural 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.
• IT can act as a tool for releasing the creative potential & knowledge
embedded in the society.
• Experiments with IT & its application to rural development are carried out
in different parts of India. (Also refer to Box -6.3 on Pg-110)
 ORGANIC FARMING
• ORGANIC FARMING is a whole system of farming that restores, maintains
and enhances the ecological balance.
• This method avoids the use of synthetic chemical fertilizers.
• This method uses eco-friendly technology.
• This is the process of producing safe and healthy food, without leaving
any adverse impact on the environment.
• This is the form of agriculture that relies on techniques such as crop
rotation, green manure, compost and biological pest control.
• There is an increasing demand for organically grown food to increase
food safety throughout the world.
• Organic farming is very much required in today’s world because:
(a) in the recent years , awareness of the harmful effect of chemical based
fertilizers and pesticides on our health is on the rise and
(b) conventional agriculture relies heavily on chemical fertilizers and toxic
pesticides, etc., which enter the food supply , penetrate the water
sources, harm the livestock , deplete the soil and devastate natural eco-
systems.
 MERITS AND DEMERITS OF ORGANIC FARMING
 BENEFITS:
• It provides a means to substitute costlier agricultural inputs (such as HYV seeds, chemical fertilizers &
pesticides)with locally produced organic inputs which are cheaper & thereby generates good returns on
investment.
• It generates income through international exports as the demand for organically grown crops is on a rise.
• It provides us with healthy food as organically grown food has more nutritional value than food grown
through chemical farming.
• It requires more labour input than conventional farming & is thus an attractive proposition for India as it
generates more employment opportunities.
• Its produce is pesticide-free. It is produced in an environmentally sustainable way.
 LIMITATIONS :
• It needs to be popularized by creating awareness & willingness on the part of the farmers to adapt to new
technology. It is less popular among farmers.
• It faces the problems of inadequate infrastructure & marketing facilities.
• It has a lesser yield in the initial years than modern agricultural farming and so small and marginal
farmers find it difficult to adapt to large-scale production.
• Its produce have more blemishes & a shorter shelf life than sprayed produce.
• Also choice in production of off-season crops is quite limited in organic farming.

NOTE: In spite of these limitations, it helps in sustainable development of agriculture & India has
a clear advantage in producing organic products for both domestic & international markets.
( Also refer to Box 6.4 and Box 6.5 on Pg – 111.)

CONCLUSION