RURAL DEVELOPMENT

Agriculture is the major source of livelihood in the rural sector. Mahatma Gandhi once said that the real progress of India did not mean simply the growth and expansion of industrial urban centres but mainly the development of the villages. This idea of village development being at the centre of the overall development of the nation is relevant even today. It is because more than two-third of India’s population depends on agriculture that is not productive enough to provide for them; one-third of rural India still lives in abject poverty. 

What is Rural Development 

Rural development means an action- plan for the social and economic upliftment of the rural areas. The key issues of action plan for rural development are:

i). Development of infrastructure like electricity, irrigation, credit marketing, transport etc. 

ii). Human capital formation including literacy and health.

iii). Development of productive resources.

iv). Special measures like Poverty alleviation.

v). Land reforms.

Credit and Marketing in Rural Areas

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.

i). Short Term Credit: It needs relates basically to the purchase of inputs like seeds fertilizers etc. short term borrowings generally stretches over a period of 6 to 12 months.

ii). Medium Term Credit: Medium term loans are required for purchasing machinery constructing fences and digging wells. Such loans are generally stretch over a period of 12 months to 5 years.

iii). Long Term Credit: It is meant for the purchase of additional land. The period of such loan ranges between 5 to 20 years.

Sources of Rural Credit 

The various sources can be classified into two groups:

1. Non Institutional Sources or Informal Sector: It includes money lenders, traders, landlords, friends, relatives etc.

2. Institutional Sources or formal sources : It includes:

i). Co- operative Credit Societies: They provide adequate credit at a reasonable rate of interest. They also provide financial guidance in the planning of agricultural operations, assistance in raising crops & its productivity. Currently, cooperatives account for 43% share in credit flow of agricultural credit.

ii). Regional Rural Banks (RRBs): These were set up in 1976 to provide adequate credit at cheaper rates. Nearly, 90% of the loans of RRBs are provided to the weaker sections.

iii). Commercial Banks: Commercial banks provide both direct & indirect loans for the agriculture & allied activities for a maximum period of 15 years.

iv). National Bank for Agriculture & Rural Development (NABARD): It was set up in July 1982 with an authorized share capital of Rs.500crores on a 50- 50 basis between RBI & the Union government. Deputy Governor of RBI is the chairman of NABARD. It gives loans to state cooperatives, RRB & land development banks. It Coordinates the activities of government in the development of small scale industries, village industries & rural craft.

v). Self Help Groups (SHGs): The SHGs promote thrift among rural households by minimum contribution from each member. From the pooled money, credit needs are fulfilled. The members have to repay the credit in small installments at a low rate of interest. They have helped in empowerment of women. Such credit provisions are generally referred as Micro Credit Programs.

Rural Banking - A Critical Appraisal

1. Rapid expansion of the banking system had a positive effect on rural farm and non-farm output, income and employment. It helped farmers to avail services and credit facilities and a variety of loans for meeting their production needs.

2. Famines became events of the past; we have now achieved food security which is reflected in the abundant buffer stocks of grains.

3. With the possible exception of the commercial banks, other formal institutions have failed to develop a culture of deposit mobilization - lending to worthwhile borrowers and effective loan recovery. 

4. Thus, the expansion and promotion of the rural banking sector has taken a backseat after reforms. To improve the situation, banks need to change their approach from just being lenders to building up relationship banking with the borrowers. Inculcating the habit of thrift and efficient utilization of financial resources needs to be enhanced among the farmers too.

Agriculture Marketing System

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

2. Even today, more than 10 percent of goods produced in farms are wasted due to lack of storage.

3. Measures Initiated by the Government to Improve Market System are:

i). Regulation of markets - is to create orderly and transport marketing conditions.

ii).  Co-operative agricultural marketing societies- in realizing fair products for farmers products.

iii).  Physical infrastructure like warehousing facilities, roads, railways, go downs, cold storage, processing units etc.

iv).  Policy instruments:

a). Assurance of minimum support prices (MSP) for 24 agricultural products

b).  Maintenance of buffer stocks of wheat and rice by Food Corporation of India and

c). Distribution of food grains and sugar through PDS.

d).  The rapid commercialization of agriculture in the era of globalization offers tremendous opportunities for value addition of agro -based products through processing and this needs to be encouraged apart from awareness and training of the farmers to improve their marketing ability.

Emerging Alternative Marketing Channels 

1. It has been realized that if farmers directly sell their produce to consumers, it increases their incomes like apni mandi, hadaspar mandi, rythu bazars etc. 

2. Several national and multinational fast food chains are increasingly entering into contracts/alliance with farmers to encourage them to cultivate farm products of the desired quality by providing them without only seeds and other inputs but also assured procurement of the produce at pre-decided prices. 

Agricultural Diversification in India

Diversification Diversification is an emerging challenge in the context of rural development. It has two aspects :

i). Diversification of Crop Production It implies production of a diverse variety of crops rather than one specialized crop. It means a shift from single-cropping system to multi-cropping system.

ii). Diversification of Production Activity/Employment It implies a shift from crop farming to other areas of production activity employment. 

Non-Farm Areas of Production Activity/Employment for the Rural Population 

1. Non-farm economy has several segments in it, some possess dynamic linkages that permit healthy growth while others are in subsistence, low productivity propositions.

2. The dynamic sub-sectors include agro-processing industries, food processing industries, leather industry, tourism, etc.

3. Those sectors which have the potential but seriously lack infrastructure and other support include traditional household-based industries like pottery, crafts, handlooms etc. 

Animal Husbandry 

i) It is the most important area of employment in India different from crop farming. It is also called livestock farming, poultry, cattle etc.

ii) Today livestock sector alone provides alternative livelihood options to over 70 million small and marginal farmers including landless labourers.

iii) Operation flood - Milk production in the country has increased by more than five times between 1960-2009.

Fisheries 

i) The fishing community in India depends almost equally on inland sources and marine sources of fishing. Inland sources include rivers, lakes, ponds and streams etc.

ii) Presently fish production from inland sources contributes about 61% to the total fish production, while 39% comes from the marine sector.

iii) Today fish production accounts for 0.7% of the total GDP.

iv) A large share of fish workers families are poor. Almost 40% of workers are women.

Horticulture 

i) Horticultural crops include fruits, vegetables and flowers besides several others. Over time, there has been a substantial increase in area under horticulture.

ii) These crops play a vital role in providing food and nutrition, besides addressing employment concerns.

iii) The period between 1991-2003 is also called an effort to herald a ‘Golden Revolution’ because during this period, the planned investment in horticulture became highly productive and the sector emerged as a sustainable livelihood option.

iv) India has emerged as a world leader in producing a variety of fruits like mangoes, bananas, coconuts, cashew nuts and a number of spices.

v) Second largest producer of fruits and vegetables.

vi) 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. This sector provides employment to around 19 percent of the total labour force.

vii) Improved veterinary care and credit facilities to small and marginal farmers and landless labourers would enhance sustainable livelihood options through livestock production. 

viii) Cottage and Household Industry: This industry has been dominated by such activities as spinning, weaving, dyeing and bleaching.

ix) Other Alternative Livelihood: IT has revolutionized many sectors in the Indian economy. There is broad consensus that IT will play a critical role in achieving sustainable development and food security in the twenty-first century. It also has a positive impact on the agriculture sector as it disseminates information regarding emerging technologies and its applications, prices, weather and soil conditions for growing different crops etc. Most importantly, it has ushered in a knowledge economy that is a thousand times more powerful than the industrial revolution. It also has potential for employment generation in rural areas.

Sustainable Development and Organic Farming 

i). Organic farming is a system of farming that relies upon the use of organic inputs for cultivation. Organic inputs basically include animal manures and composts.

ii). Advantages of organic farming:

a) Inexpensive technology for the small and marginal farmers

b) Generates income.

c) Discards the use of non-renewable resources

d) Environment friendly

e) Sustains soil fertility

f) Healthier and tastier food.

iii). Limitations :

a) Yields from organic farming are less than modern agricultural farming in initial years.

b) Organic produce has a shorter shelf life than sprayed produce.

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

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

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