CHAPTER 6: RURAL DEVELOPMENT

# What is rural development?

Rural development is a comprehensive term. It focuses on action for the development of areas which are lagging
behind in the overall development of the village economy.

# Areas which need fresh development in rural areas:

1. Development of Human resources – literacy, education and skill development, health including both
sanitation and public health.

2. Land reforms

3. Development of the productive resources of each locality.

4. Infrastructure development like electricity, irrigation, credit, marketing, transport facilities, facilities for
agriculture research and extension, and information dissemination.

5. Special measures for alleviation of poverty and bringing about improvement in the living standard of weaker
sections of the population.

# Credit and Marketing in Rural Areas:

➢ Credit

Rural credit is the lifeline of farming activity because:

1. Most of the farmers in India are small and marginal farmers and they do not have surplus production for
further development.

2. Gestation period between sowing and harvesting is quite long and farmers borrow from various sources
to meet their expenses on seeds, fertilisers, implements and other family expenses of marriage, death
and religious ceremonies etc.

• Sources of rural credit:

Sources of rural credit are classified as institutional and non-institutional.

1. Non-Institutional Sources:

Landlords, village traders, and moneylenders.

2. Institutional Sources:

Commercial banks, regional rural banks (RRBs), cooperatives and land development banks. This institutional

structure of rural banking is known as multi-agency system.

• Self-Help Groups (SHGs)

✓ SHGs promote thrift among rural households by a minimum contribution by each member.

✓ No collateral is needed while borrowing from SHG.

✓ From the pooled money, credit is given to the needy members to be repayable in small installments at
reasonable interest rates.

✓ By May 2019, nearly 6 crore women in India have become member in 54 lakh women SHGs.

✓ Credit provisions by SHGs are known as micro-credit programmes.

✓ SHGs have helped in the empowerment of women.

 • Rural Banking – a Critical Appraisal:

1. Institutional credit requires collateral because of which a large number of borrowers are left out.

2. Government has been very lenient on the recovery of loans, because of which there have been large number
of willful defaulters. Agriculture default rates have been chronically high.

3. Except commercial banks, most financial institutions have failed to develop a culture of thrift among the
farming families.

➢ Agriculture Marketing System:

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

Measures taken by Government to improve Market System:

Four measures were initiated to improve the market system:

1. Regulated Markets:

Regulated markets have been established where sale and purchase of the produce is monitored by the market
committee comprising of the representatives of government, farmers and traders. Market system is made
transparent.

2. Provision of Physical Infrastructure:

Physical infrastructure like roads, railways, warehouse, godowns, cold storages and processing units have been
provided because current infrastructure is inadequate.

3. Co-operative Agricultural Marketing:

The government is encouraging the formation of co-operative agriculture marketing societies, farmers get better
prices for their produce. Milk cooperative in Gujarat is brilliant example.

4. MSP Policy:

It includes policy instruments like i) assurance of MSP ii) maintenance of buffer stock of wheat and rice by FCI
and iii) distribution of food grains through PDS.

Agricultural marketing has come a long way with the government intervention but still most
of the agricultural marketing is being handled by the private traders such as moneylenders, rural political elites,
big merchants and rich farmers. So, government intervention is necessary.

# Alternative Marketing Channels:

Direct sale of their products by farmers to consumers increases their incomes. Some examples of these channels are
Apni Mandi (Punjab, Haryana and Rajasthan), Rythu Bazars (Vegetable and fruit markets in Andhra Pradesh and
Telangana) and Uzhavar Sandies (Tamil Nadu).

Several national and international fast food chains are entering into contracts with farmers to encourage
them to cultivate farm products of the desired quality for them. These companies supply advance payments to
farmers and also assure them with a pre-decided price. Such agreements reduce price risks of farmers.
# Diversification:

Diversification includes two aspects:

1. Diversification of crop production: It implies production of a diverse variety of crops rather than one
specialised crop. It implies a shift from simple cropping system to multi-cropping system.

2. Diversification of production activity: It implies a shift of workforce from agriculture to other allied activities
and non-agricultural sector.

Non-farm Areas of Production

1. Animal Husbandry:

In India, the farming community uses the mixed crop-livestock farming system – cattle, goats, fowl, are the widely
used species.

• Benefits of Livestock Production:

1. It provides increased stability in income, food security, transport, fuel and nutrition for the family without
disrupting other food producing activities.

2. It provides alternate livelihood to small and marginal farmers, including landless labourers.

3. Women also find employment in this sector.

• Distribution of Poultry and Livestock in India, 2012

1) Poultry – 58% 2) Cattle and Buffaloes – 24%

3) Sheeps and goats – 16% 4) Pigs – 1%

5) Others – 1%

Operation Flood:

It is a system whereby all the farmers can pool their milk produced according to different grading (based on quality)
and the same is processed and marketed to urban areas through cooperatives.

In this system, farmers are assured of a fair price and income from the supply of milk to
urban markets. Gujarat is the success story in milk cooperatives.

2. Fisheries:

• Inland sources contributes about 64% to the total fish production and 36% comes from the marine sector
(seas and oceans)

• Total fish production accounts for 0.8% of total GDP.

• West Bengal, Andhra Pradesh, Kerala, Gujarat, Maharashtra and Tamil Nadu are major fish producing states.

Problems of Fishing Community:

• Large underemployment

• Low per-capita earning

• Absence of mobility of labour to other sectors

• High rate of illiteracy

• Indebtedness
 3. Horticulture:

• India grows diverse horticulture crops such as fruits, vegetables, tuber crops, flowers, medicinal and
aromatic plants, spices and plantation crops.

• Horticulture sector contributes nearly one-third of the value of agriculture output and about 6% of GDP of
India.

• India is the second largest producers 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.

Requirements in Animal Husbandry, Fisheries and Horticulture Sector:

• It requires improved technology and promotion of good breeds of animals to enhance productivity.

• Improved veterinary care and credit facilities to small and marginal farmers and landless labourers.

• Problems of over-fishing and pollution needs to be regulated and controlled.

• Welfare programmes for the fishing community have to be reoriented to provide long term gains and
sustenance of livelihoods.

• It requires investment in infrastructure like electricity, cold storage system, marketing linkages, small scale
processing units etc.

Other Alternate Livelihood Options:

• IT is seen to play a critical role in achieving sustainable development and food security in the coming times.

• It can act as a tool for releasing the creative potential and knowledge embedded in the society.

#The Poor Women’s Bank

• ‘Kudumbashree’ is a women-oriented community based poverty reduction programme being implemented

in Kerala.
• It was started in 1995 as a thrift and credit society for poor women with the objective to encourage small
savings.

#TAmil Nadu Women in Agriculture (TANWA)

1. It is a project intiated in Tamil Nadu to train women in latest agricultural techniques.

2. Women are trained to raise agricultural productivity and family income.

#Adoption of Villages by Parliamentarians

• In October 2014, The Government of India introduced a new scheme called ‘Sansad Adarsh Gram Yojana
(SAGY).

• Under this scheme, MPs need to identify and develop one village from their constituencies.

• MPs can develop one village by 2016, and two more by 2019, covering over 2500 villages in India.

• According to this scheme, the village can have a population of 3000-5000 in the plains and 1000-3000 in the
hills and should not be MPs’ own or their spouse’s village.

• MPs are expected to facilitate a village development programme, motivate villagers to take up activities and
build infrastructure in the areas of health, nutrition and education.
Sustainable Development and Organic Farming:

• In recent years, awareness of the harmful effect of chemical-based fertilisers and pesticides on our health is
on a rise.
• Conventional agriculture relies heavily on chemical fertilisers and toxic pesticides etc., which enter the food
supply, penetrate the water sources, harm the livestock, deplete the soil and devastate natural eco-systems.
• Efforts in evolving technologies which are eco-friendly are essential for sustainable development and one
such technology which is eco-friendly is organic farming.
• In short, organic agriculture is a whole system of farming that restores, maintains and enhances the
ecological balance. There is an increasing demand for organically grown food to enhance food safety
throughout the world.

Benefits of Organic Farming:

• Organic agriculture offers a means to substitute costlier agricultural inputs (such as HYV seeds, chemical
fertilisers, pesticides etc.) with 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.
• 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 employment option.
• Finally, the produce is pesticide-free and produced in an environmentally sustainable way and hence it is
eco-friendly.

Problems of Organic Farming:

• Organic farming 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 which need to be
addressed apart from an appropriate agriculture policy to promote organic farming.
• It has been observed that the yields from organic farming are less than modern agricultural farming in the
initial years. Therefore, small and marginal farmers may find it difficult to adapt to largescale production.
• Organic produce may also have more blemishes and a shorter shelf life than sprayed produce.
• Choice in production of off-season crops is quite limited in organic farming.

Nevertheless, organic farming helps in sustainable development of agriculture and India has a
clear advantage in producing organic products for both domestic and international markets.

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, the 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.