Chapter 6. Rural Development

Rural Development
• Rural development is a comprehensive term. It essentially focuses on action for development of areas that are lagging behind in overall development of village economy.
• Real progress of India is possible only when rural areas and rural people are developed, so overall growth of India could be achieved.
• Some of areas which are challenging and need fresh initiatives for development in rural India include:
• Development of human resources;
(1) Proper attention to literacy specifically, female
(2) Education and skill development, and
(3) Better Health facilities for physical growth.
• Land reforms, and
• Development of productive resources of each locality.
• Infrastructure development like electricity, irrigation, credit, marketing, transport facilities including construction of village roads and feeder roads to nearby highways, facilities for agriculture research and extension, and information dissemination.
• Special measures for alleviation of poverty and bringing about significant improvements in living conditions of weaker sections of population emphasising access to productive employment opportunities.
• All this means that people engaged in farm and nonfarm activities in rural areas have to be provided with various means that help them increase their productivity. They need to be given opportunities to diversify into various non-farm productive activities such as food processing.
• Enabling them better and more affordable access to healthcare, sanitation facilities at workplaces and homes and education for all would need to be given top priority for rapid rural development.
• Inadequate infrastructure, lack of alternate employment opportunities in industry or service sector, increasing casualisation of employment., further impede rural development.

Credit and Marketing in Rural Areas

• growth of rural economy depends primarily on infusion of capital from time to time to realise higher productivity in agriculture and nonagriculture sectors.
• As time of gestation between crop sowing and realisation of income after production is quite long, farmers borrow from various sources to meet their initial investment in seeds, fertilisers, implements, and other family expenses like marriage, death, religious ceremonies.
• National Bank for Agriculture and Rural Development [NABARD] was set up in 1982 as an apex body to coordinate activities of all institutions involved in rural financing system.
• institutional structure of rural banking today consists of a set of multi-agency institutions, namely, commercial banks, regional rural banks [RRBs], cooperatives and land development banks. They are expected to dispense adequate credit at cheaper rates.
• Self-Help Groups have emerged to fill gap in formal credit system because formal credit delivery mechanism has not only proven inadequate but has not been fully integrated into overall rural social and community development.
• SHGs promote thrift in small proportions by a minimum contribution from each member. From pooled money, credit is given to needy members to be repayable in small installments at reasonable interest rates.
• Presently, nearly 54 lakh women SHGs with almost 6 crore women as member are operating across different rural areas.
• Such credit provisions are usually referred to as micro-credit programmes. SHGs have helped in empowerment of women.

Rural Banking
• rapid expansion of banking system had a positive effect on rural farm and non-farm output, income & employment, especially after green revolution — it helped farmers to avail services and credit facilities and a variety of loans for meeting their production needs.
• With possible exception of commercial banks, other formal institutions have failed to develop a culture of deposit mobilisation — lending to worthwhile borrowers and effective loan recovery. Agriculture loan default rates have been chronically high.
• expansion and promotion of rural banking sector has taken a backseat after reforms.
• In recent years, all adults are encouraged to open bank accounts as a part of a scheme called JanDhan Yojana.
• Those bank holders can get ` 1-2 lakh accidental insurance coverage and overdraft facilities for ` 10,000 & get their wages, old-age pension and other social security payments of government transferred to bank accounts. There is no need to keep a minimum bank balance.

Agricultural Market System
• Rural people not only face problems with regard to finance but encounter difficulties in marketing their goods. Thus issue of agricultural marketing needs urgent attention in scheme of securing rapid rural development.
• Agricultural marketing is a process that involves assembling, storage, processing, transportation, packaging, grading & distribution of different agricultural commodities across country.
• More than 10% of goods produced on farms are wasted due to a lack of storage. Therefore, government intervention became necessary to regulate activities of private traders.
• first step was regulation of markets to create orderly and transparent marketing conditions.
• second component is provision of physical infrastructure facilities like roads, railways, warehouses, godowns, cold storage and processing units.
• Cooperative marketing, in realising fair prices for farmers’ products, is third aspect of government initiative.
• fourth element is policy instruments like; [i] assurance of minimum support prices [MSP] for agricultural products [ii] maintenance of buffer stocks of wheat and rice by Food Corporation of India and [iii] distribution of food grains and sugar through PDS. These instruments are aimed at protecting income of farmers and providing at a subsidised rate to poor.

Alternate Marketing Channels
• It has been realised that if farmers directly sell their produce to consumers, it increases their incomes.
• concept of ‘Farmers Market’ was started, to give boost to small farmers by providing them direct access to consumer and eliminating middlemen.
• Some examples of these channels are Apni Mandi [Punjab, Haryana & Rajasthan]; Hadapsar Mandi [Pune]; Rythu Bazars [vegetable and fruit markets in Andhra Pradesh and Telangana] and Uzhavar Sandies [farmers markets in Tamil Nadu].
• Several national and multinational fast-food chains are increasingly entering into contracts/alliances with farmers to encourage them to cultivate farm products [vegetables, fruits.] of desired quality by providing them with not only seeds and other inputs but assured procurement of produce at predecided prices.

Diversification into Productive Activities
• Diversification includes two aspects: one relates to changes in cropping pattern and other relates to a shift of workforce from agriculture to other allied activities [livestock, poultry, fisheries.] & non-agriculture sector.
• Diversification towards new areas is necessary not only to reduce risk from agriculture sector but to provide productive sustainable livelihood options to rural people.
• Much of agricultural employment activities are concentrated in Kharif season.
• But during Rabi season, in areas where there are inadequate irrigation facilities, it becomes difficult to find gainful employment. Therefore, expansion into other sectors is essential to provide supplementary gainful employment and to realise higher levels of income for rural people to overcome poverty and other tribulations.
• As agriculture is already overcrowded, a major proportion of increasing labour force needs to find alternate employment opportunities in other non-farm sectors.
• non-farm economy has several segments in it; some possess dynamic linkages that permit healthy growth while others are in subsistence, low productivity propositions.
• dynamic sub-sectors include agro-processing industries, food processing industries, leather industry, tourism. Those sectors which have potential but seriously lack infrastructure and other support include traditional home-based industries like pottery, crafts, handlooms .

• India has adopted growing of diverse horticultural crops such as fruits, vegetables, tuber crops, flowers, medicinal & aromatic plants, spices & plantation crops.
• These crops play a vital role in providing food and nutrition, besides addressing employment concerns.
• horticulture sector contributes nearly one-third of value of agricultural 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 second-largest producer of fruits and vegetables.
• 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.Animal Husbandry
• Animal Husbandry is that branch of agriculture, which is concerned with breeding, rearing & caring for farm animals.
• In India, farming community uses mixed crop-livestock farming system —cattle, goats, & fowl are widely held species.
• Livestock production provides increased stability in income, food security, transport, fuel & nutrition for family without disrupting other food-producing activities.
• performance of Indian dairy sector over last three decades has been quite impressive. Milk production in country has increased by about ten times between 1951-2016.
• This can be attributed mainly to successful implementation of ‘Operation Flood’. This is a system whereby all farmers can pool their milk produced according to different gradings [based on quality], processed & marketed to urban centres through cooperatives.
• In this system, farmers are assured of a fair price and income from supply of milk to urban markets.
• Meat, eggs, wool & other by-products are emerging as important productive sectors for diversification.
• Fisheries refer to occupation devoted to catching, processing or selling of fish and other aquatic animals.
• People who fish see bodies of water as “mothers” or “providers.” So, bodies of water like sea, oceans, rivers, lakes, natural ponds, streams. are an important part of fishing community and a source of life. In India, fisheries have come a long way since budgets have been steadily increased and new technologies have been used in fisheries and aquaculture.
• Presently, fish production from inland sources contributes about 65% of total value of fish production and balance of 35% comes from marine sector [sea and oceans].
• Today total fish production accounts for 0.9% of total GDP.
• In India, West Bengal, Andhra Pradesh, Kerala, Gujarat, Maharashtra and Tamil Nadu are major fish producing states.
• Rampant underemployment, low per capita earnings, absence of mobility of labour to other sectors and a high rate of illiteracy and indebtedness are some of major problems of fishing community.

Sustainable Development and Organic Farming
• Conventional agriculture relies heavily on chemical fertilisers and toxic pesticides ., which enter food supply, penetrate water sources, harm livestock, deplete soil and devastate natural ecosystems.
• Efforts in evolving technologies which are ecofriendly are essential for sustainable development and one such technology which is eco-friendly is organic farming.
• Organic agriculture is a whole system of farming that restores, maintains & enhances ecological balance.
• Organic agriculture offers a means to substitute costlier agricultural inputs [such as HYV seeds, chemical fertilisers, pesticides .] with locally produced organic inputs that are cheaper and thereby generate good returns on investment.
• Organic agriculture generates income through exports as demand for organically grown crops is on rise.
• Studies across countries have shown that organically grown food has more nutritional value than chemical farming thus providing us with healthy foods.
• Since organic farming requires more labour input than conventional farming, India will find organic farming an attractive proposition.
• Organic farming helps in sustainable development of agriculture and India has a clear advantage in producing organic products for both domestic and international markets.

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