Plus One Economics Notes Chapter 6 Rural Development

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Kerala Plus One Economics Notes Chapter 6 Rural Development

Rural Development
Rural development is quite a comprehensive term but it essentially means a plan of action for the development of areas which are lagging behind in socio-economic development. It essentially focuses on the action for the development of areas that are lagging behind in the overall development of the village economy. Some of the areas which are challenging and need fresh initiatives for development in India include:

  • Development of human resources including- literacy, more specifically, female literacy, education, and skill development-health, addressing both sanitation and public health
  • Land reforms
  • Development of the 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 improvement in the living conditions of the weaker sections of the population emphasizing access to productive employment opportunities.

Credit and Marketing in Rural Areas
Credit: Growth of rural economy depends primarily on the infusion of capital, from time to time, to realize higher productivity in agriculture and non-agriculture sectors. 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 of marriage, death, religious ceremonies.

A major change occurred after 1969 when India adopted social banking and a multi-agency approach to adequately meet the needs of rural credit. Later, the National Bank for Agriculture and Rural Development (NABARD) was set up in1982 as an apex body to coordinate the activities of all institutions involved in the rural financing system.

The institutional structure of rural banking today consists of a set of multi-agency institutions, namely, commercial banks, regional rural banks (RRBs), co-operatives and land development banks. Recently, Self-Help Groups (henceforth SHGs) have emerged to fill the gap in the formal credit system because the formal credit delivery mechanism has not only proven inadequate but has also not been fully integrated into the overall rural social and community development. By March end 2003, more than seven lakh SHGs had reportedly been credit linked. Such credit provisions are generally referred to as micro-credit programmes.

Agricultural Market System
Agricultural marketing is a process that involves the assembling, storage, processing, transportation, packaging, grading and distribution of different agricultural commodities across the country. Let us discuss four such measures that were initiated to improve the marketing aspect.

1. The first step was regulation of markets to create orderly and transparent marketing conditions.

2. Second component is provision of physical infrastructure facilities like roads, railways, warehouses, godowns, cold storages and processing units.

3. Co-operative marketing, in realizing fair prices for farmers’ products, is the third aspect of a government initiative.

4. The fourth element is the policy instruments like

  • assurance of minimum support prices (MSP) for 24 agricultural products
  • maintenance of buffer stocks of wheat and rice by Food Corporation of India and
  • distribution of food grains and sugar through PDS.

These instruments are aimed at protecting the income of the farmers and providing food grains at subsidized rate to the poor.

Diversification into Productive Activities
Diversification of farm products has two aspects: The first one relates to the diversification of crop production. The second one relates to the shift of the workforce from agriculture to other allied activities such as livestock, poultry, fishers, etc., and to non-farm sectors like food processing. Diversification of agriculture helps to provide alternative employment opportunities in the non-farm sector and will minimize the risk of depending exclusively on agriculture. These activities related to diversification are given below:

  • Animal husbandry
  • Fisheries
  • Horticulture

Sustainable Development and Organic Farming
In recent years, awareness of the harmful effect of chemical-based fertilizers and pesticides on our health is on a rise. 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. Efforts in evolving technologies which are eco-friendly are essential for sustainable development and one such technology which is eco-friendly is organic farming.

Benefits of Organic Farming:
1. Organic agriculture offers a means to substitute costlier agricultural inputs (such as HYV seeds, chemical fertilizers, pesticides, etc.) with locally produced organic inputs that are cheaper and thereby generate good returns on investment.

2. Organic agriculture also generates income through international exports as the demand for organically grown crops is on a rise.

3. Studies across countries have shown that organically grown food has more nutritional value than chemical farming thus providing us with healthy foods.

4. Since organic farming requires more labour input than conventional farming, India will find organic farming an attractive proposition.

5. Finally, the produce is pesticide-free and produced in an environmentally sustainable way.