Rural Development

Unit-1

Introduction
Rural development is a comprehensive term which essentially focuses on action for the development of
area which is lagging behind in overall development of village economy.Rural development is the process
of improving the quality of life and economic well-being of people living in rural areas, often relatively
isolated and sparsely populated areas.

Rural development has traditionally centered on the exploitation of land-intensive natural resources
such as agriculture and forestry. However, changes in global production networks and increased
urbanization have changed the character of rural areas. Increasingly rural tourism, niche manufacturers,
and recreation have replaced resource extraction and agriculture as dominant economic drivers. The
need for rural communities to approach development from a wider perspective has created more focus
on a broad range of development goals rather than merely creating incentive for agricultural or resource-
based businesses.

Education, entrepreneurship, physical infrastructure, and social infrastructure all play an important role
in developing rural regions.Rural development is also characterized by its emphasis on locally produced
economic development strategies. In contrast to urban regions, which have many similarities, rural areas
are highly distinctive from one another. For this reason there are a large variety of rural development
approaches used globally.

Objectives of rural development

2. Generating alternative means of livelihood in rural sector.

3. Promoting education and health facilities in the rural areas.

4.Increasing access to education and health care in rural communities.

5. Infrastructural development.

6. Human resource development in rural areas.

7. Poverty alleviation.
Key issues in rural development
(i) A robust system of rural credit.

(ii) A system of marketing that ensures remunerative price to the farmer for his produce.

(iii) Diversification of crops that reduce risks of production and induces commercialisation of farming.

(iv) Diversification of production activity with a view to find alternative means of sustainable living other
than crop-cultivation.

(v) Promotion of organic farming with a view to make crop cultivation environmental friendly as well as a
sustainable process over a long period of time.

(vi) Honest system of land reforms.

(vii) Development of human resource like health, addressing both sanitation and public health.

(viii) Development of human resource including literacy, education and skill development.

(ix) Development of Infrastructure like electricity, irrigation, transport facility, etc.

Rural credit
Rural credit means credit for the farming communities. Farmers require credit for various purposes like
purchasing agricultural tools and machines, digging wells and tube wells, purchasing seeds, fertilizers,
pesticides, etc.

The gestation period between sowing and harvesting is high. so, farmers have to borrow to fulfill their
needs during this period.

Sources of rural credit in India

2. Institutional sources are as follow:

(i) Co-operative credit societies.

(ii) Commercial Banks

(iv) NABARD (National Bank for Agriculture and Rural Development.) (established in 1982)

(v) Self Help Groups (SHGs)

The above institutional structure of rural banking which is called multi-agency system which has initiated
by govt. in 1969.

Agricultural marketing
Agricultural marketing means all those activities which includes-gathering the produce after harvesting,
processing the produce, grading the produce according to its quality, packaging the produce according to
preferences of buyers, storing the produce for future sale and selling the produce when price is lucrative.

In other words, Agricultural marketing covers the services involved in moving an agricultural product
from the farm to the consumer.

Defects of agricultural marketing

(i) Inadequate warehouses

(ii) Multiplicity of middlemen

(iii) Malpractice in unregulated markets.

(iv) Lack of Adequate finance

(v) Inadequate means of transport and communication.

Measures adopted by the government to improve marketing system

(i) Regulation of markets.

(ii) Co-operative agricultural marketing societies.

(iii) Provision of warehousing facilities.

(iv) Subsidised transport.

(v) Dissemination of marketing information.

(vii) Public Distribution System (PDS)

(viii) Alternative marketing channels

(ix) Improvement of physical Infrastructure

Diversification in agriculture activities-It has the two aspects.

1. Diversification of crop production refers to a system of multiple cropping rather than mono cropping.
It may also mean a shift from subsistence farming to commercial farming.

It has the three advantages:

(i) It lowers the risk of farmer on account of failure of monsoon.

(ii) It enhances the scope for commercialisation of farming.

(iii) Minimise the market risk arising due to price fluctuation.

2. Diversification of productive activities imply a shift from crop farming to non-farming areas of
employment. Non-farm areas of employment include.

(i) Animal husbandry.

(ii) Fisheries.

(iii) Horticulture.

(iv) Cottage and household industry.

(v) Information technology-every village a knowledge Centre

It has following advantages:

1. Reduce the risk from agriculture sector.

2. Provide ecological balance.

3. Provide sustainable livelihood option to people living in village.

Organic Farming
Organic farming is a system of farming that maintains, enhances and restores the ecological balance. It
helps in sustainable development of the agricultural sector, In organic forming, farmers use organic
manure, bio fertilizers and organic pesticides.

Advantages of organic farming:

(i) Inexpensive process.

(ii) Generates income.

(iii) Healthier and tastier food.

(iv) Solves unemployment problem.

(v) Environment friendly.

Limitation of Organic farming:

(i) Yields from organic farming is less than modern agricultural farming in initial years.

(ii) Organic produce have shorter shelf life than sprayed produce.

(iii) Choice in production of off-season crops is quite limited in organic farming.

Organic farming involves labour-intensive process of production of labour so India has comparative
advantage in organic farming.

Operation Flood

It is a system of milk co-operatives, launched in 1966. This system emphasised the pooling of milk by
farmers through co-operatives societies.

This increased the quantum of sale as well the market value of product. The production in milk increased
four-fold. This system if commonly called operation flood.

Defects of Agricultural Market in India

· Non-farm sector: It refers to jobs in govt. manufacturing, services, construction, mining, retail,
etc
· Labour intensive Process: It refers to the process or industry that requires a large amount of
labour to produce its goods.

· The existing agricultural marketing system has a number of flaws.

· The following are some of the flaws that cause the marketing system to be disorganized.

· Insufficient storage facilities: Lack of storage facilities for food grain and crops has damaged the
products either by rats or insects or due to rain.

· Distress Sale: Most Indian farmers are poor and they have no capacity to wait for a better price.
They sell the commodities at whatever price is available, and hence as a result, they have to sell
their output at a low price to village money lenders or traders in distress.

· Lack of transportation: As a result of inefficient transportation system, farmers cannot reach the
market to sell their produce at a fair price. Hence, place utility cannot take place

· Middlemen: Long chain of middlemen or intermediaries between the cultivator and the
consumer also reduces the profit of the producer, with a major chunk being taken by the
mediator himself

· Other issues: There are also other defects like lack of institutional finance, lack of guidance etc.
which makes the Indian marketing system disorganized.