RURAL DEVELOPMENT

INTRODUCTION
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.
Que. Why should we attach such significance to rural development when we see around us fast
growing cities with large industries and modern information technology hubs?
Ans. A) It is because more than two-third of India’s population depends on agriculture that is yet to
become productive enough to provide for them.
B) One-fourth of rural India still lives in abject poverty.

What is rural development?

Rural development is a comprehensive term. It essentially focuses on 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 rural India
include :-
i. Development of human resources including –
a) literacy, more specifically, female literacy, education and skill development
b) health, addressing both sanitation and public health.
ii. Land reforms
iii. Development of the productive resources of each locality.
iv. 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.
v. Special measures for alleviation of poverty and bringing about significant improvement in
the living conditions of the weaker sections of the population emphasising access to
productive employment opportunities.
All this means that people engaged in farm and non-farm activities in rural areas have to be provided
with various means that help them increase the productivity.
• They also 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.
• Education for all would also need to be given top priority for rapid rural development.

CREDIT AND MARKETING IN RURAL AREAS

CREDIT
• Growth of rural economy depends primarily on infusion of capital, from time to time, to realise
higher productivity in agriculture and non-agriculture sectors.
• As the time gestation between crop sowing and realisation of income after production is quite
long, farmers borrow from various sources to meet their: -
i. Initial investment on seeds, fertilisers, implements.
ii. Other family expenses of marriage, death, religious ceremonies etc.

BY GAURAV JAIN(INDIRA AWARD WINNER)

 • At the time of independence, moneylenders and traders exploited small and marginal farmers
and landless labourers by:-
i. lending to them on high interest rates.
ii. Manipulating the accounts to keep them in a debt-trap.

• A major change occurred after 1969 when India adopted social banking and multiagency
approach to adequately meet the needs of rural credit.
• National Bank for Agriculture and Rural Development (NABARD) was set up in 1982 as
an apex body to coordinate the activities of all institutions involved in the rural financing
system.
• The Green Revolution led to the diversification of the portfolio of rural credit towards
production-oriented lending.

The institutional structure of rural banking today consists of a set of multi-agency institutions: -
1. Commercial banks
2. Regional Rural Banks (RRBs)
3. Cooperatives
4. land development banks.
They are expected to dispense adequate credit at cheaper rates.
Limitation of formal credit system:-
i. The formal credit delivery mechanism is inadequate.
ii. It has not been fully integrated into the overall rural social and community development.
iii. Since some kind of collateral is required, vast proportion of poor rural households were
automatically out of the credit network.

SELF-HELP GROUP
Self-Help Groups have emerged to fill the gap in the formal credit system. The SHGs promote thrift in
small proportions by a minimum contribution from each member. From the pooled money, credit is
given to the needy members to be repayable in small instalments at reasonable interest rates.
• By May 2019, nearly 6 crore women in India have become member in 54 lakh women SHGs.
• About 10- 15 Lakh per SHG and another 2.5 lakhs per SHG as a Community Investment
Support Fund (CISF) are provided as part of renovating fund to take up self-employment for
income generation.
• Such credit provisions are generally referred to as micro-credit programmes.
• SHGs have helped in the empowerment of women.
Rural Banking — a Critical Appraisal:
Rapid expansion of the banking system had a positive effect on rural farm and non-farm output, income
and employment, especially after the green revolution
i. It helped farmers to avail services and credit facilities and a variety of loans for meeting their
production needs.
ii. Famines became events of the past; we have now achieved food security which is reflected in
the abundant buffer stocks of grains.
However, all is not well with our banking system.
i. With the possible exception of the commercial banks, other formal institutions have failed to
develop a culture of deposit mobilisation — lending to worthwhile borrowers and effective loan
recovery.
ii. Agriculture loan default rates have been chronically high.

BY GAURAV JAIN(INDIRA AWARD WINNER)

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.
Prior to independence :-
i. Farmers, while selling their produce to traders, suffered from faulty weighing and manipulation
of accounts.
ii. Farmers who did not have the required information on prices prevailing in markets were often
forced to sell at low prices.
iii. They also did not have proper storage facilities to keep back their produce for selling later at a
better price.
Four such measures that were initiated to improve the marketing aspect.
i. Regulation of markets to create orderly and transparent marketing conditions. By and large,
this policy benefited farmers as well as consumers. However, there is still a need to develop
about 27,000 rural periodic markets as regulated market places to realise the full potential of
rural markets.
ii. Provision of physical infrastructure facilities like roads, railways, warehouses, godowns,
cold storages and processing units. The current infrastructure facilities are quite inadequate to
meet the growing demand and need to be improved.
iii. Cooperative marketing, to realising fair prices for farmers’ products. The success of milk
cooperatives in transforming the social and economic landscape of Gujarat and some other parts
of the country is testimony to the role of cooperatives.
However, cooperatives have received a setback during the recent past due to
a) Inadequate coverage of farmer members.
b) lack of appropriate link between marketing and processing cooperatives.
c) Inefficient financial management.

iv. 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
(iii) Distribution of food grains and sugar through PDS.

These instruments are aimed at protecting the income of the farmers and providing foodgrains
at a subsidised rate to the poor.
Emerging Alternate Marketing Channels:
1. It has been realised that if farmers directly sell their produce to consumers, it increases
their incomes. Some examples of these channels are
a) Apni Mandi (Punjab, Haryana and Rajasthan)
b) Hadaspar Mandi (Pune)
c) Rythu Bazars (vegetable and fruit markets in Andhra Pradesh and Telangana)
d) Uzhavar Sandies (farmers markets in Tamil Nadu).
2. Further, several national and multinational fast-food chains are increasingly entering
into contracts/ alliances with farmers to encourage them to cultivate farm products
(vegetables, fruits, etc.) of the desired quality by providing them with not only seeds
and other inputs but also assured procurement of the produce at pre decided prices.
It is argued that such arrangements will help in reducing the price risks of farmers and would also
expand the markets for farm products.
DIVERSIFICATION INTO PRODUCTIVE ACTIVITIES
Diversification includes two aspects
i. To change in cropping pattern.
ii. Shift of workforce from agriculture to other allied activities (livestock, poultry, fisheries
etc.) and non-agriculture sector.

BY GAURAV JAIN(INDIRA AWARD WINNER)

Need for diversification
I. To reduce the risk from agriculture sector.
II. To provide productive sustainable livelihood options to rural people.
III. To provide supplementary gainful employment.
IV. To realising higher levels of income for rural people to overcome poverty and other tribulations.
Hence, there is a need to focus on allied activities, non-farm employment and other emerging
alternatives of livelihood.

As agriculture is already overcrowded, a major proportion of the 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.
The dynamic sub-sectors include agro-processing industries, food processing industries, leather
industry, tourism, etc.
While others are in subsistence, low productivity propositions.
Those sectors which have the potential but seriously lack infrastructure and other support include
traditional home-based industries like pottery, crafts, handlooms etc.
Majority of rural women find employment in agriculture while men generally look for non-farm
employment. In recent times, women have also begun looking for non-farm jobs.

Animal Husbandry:
• In India, the farming community uses the mixed crop-livestock farming system —cattle, goats,
fowl are the widely held species.
• Livestock production provides increased stability in income, food security, transport, fuel and
nutrition for the family without disrupting other food-producing activities.
• Today, livestock sector alone provides alternate livelihood options to over 70 million small and
marginal farmers including landless labourers. A significant number of women also find
employment in the livestock sector.
• Poultry accounts for the largest share with 61 per cent followed by others.
• Other animals which include camels, asses, horses, ponies and mules are in the lowest rung.
• India had about 303 million cattle, including 110 million buffaloes in 2019.
• Performance of the Indian dairy sector over the last three decades has been quite impressive.
• Milk production in the country has increased by about ten times between 1951-2016. This can
be attributed mainly to the successful implementation of ‘Operation Flood’.
• Operation Flood: It is a system whereby all the farmers can pool their milk produced according
to different grading (based on quality), processed and marketed to urban centres through
cooperatives. In this system the farmers are assured of a fair price and income from the supply
of milk to urban markets. As pointed out earlier Gujarat state is held as a success story in the
efficient implementation of milk cooperatives which has been emulated by many states.
Gujarat, Madhya Pradesh, Uttar Pradesh, Andhra Pradesh, Maharashtra, Punjab and Rajasthan,
are major milk producing states.
• Meat, eggs, wool and other by- products are also emerging as important productive sectors for
diversification.
Fisheries:
• The fishing community regards the water body as ‘mother’ or ‘provider’. The water bodies
consisting of sea, oceans, rivers, lakes, natural aquatic ponds, streams etc. are, therefore, an
integral and life-giving source for the fishing community.
• In India, after progressive increase in budgetary allocations and introduction of new
technologies in fisheries and aquaculture, the development of fisheries has come a long way.
• Presently, fish production from inland sources contributes about 65 per cent to the total value
of fish production and the balance 35 per cent comes from the marine sector (sea and oceans).
BY GAURAV JAIN(INDIRA AWARD WINNER)
 • Today total fish production accounts for 0.9 per cent of the total GDP. In India, West Bengal,
Andhra Pradesh, Kerala, Gujarat, Maharashtra and Tamil Nadu are major fish producing states.
• Even though women are not involved in active fishing, about 60 per cent of the workforce in
export marketing and 40 per cent in internal marketing are women.
• There is a need to increase credit facilities through cooperatives and SHGs for fisherwomen to
meet the working capital requirements for marketing

Problems faced by fishing community

• A large share of fish worker families are poor.
• Rampant underemployment
• low per capita earnings
• Absence of mobility of labour to other sectors
• A high rate of illiteracy and indebtedness are some of the major problems fishing community
face today.
Horticulture:
• Blessed with a varying climate and soil conditions, India has adopted growing of diverse
horticultural crops such as fruits, vegetables, tuber crops, flowers, medicinal and aromatic
plants, spices and plantation crops.
• These crops play a vital role in providing food and nutrition, besides addressing employment
concerns.
• Horticulture sector contributes nearly one-third of the value of agriculture 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 the second largest producer of fruits and
vegetables.
• Economic condition of many farmers engaged in horticulture has improved and it has become
a means of improving livelihood for many unprivileged classes.
• 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.

CHALLENGES

ANIMAL HUSBANDRY
I. Though, in terms of numbers, our livestock population is quite impressive but its productivity
is quite low as compared to other countries.
II. It requires improved technology and promotion of good breeds of animals to enhance
productivity.
III. Improved veterinary care and credit facilities to small and marginal farmers and landless
labourers would enhance sustainable livelihood options through livestock production.
FISHRIES
I. Production of fisheries has already increased substantially.
II. However, problems related to over- fishing and pollution need to be regulated and controlled.
III. Welfare programmes for the fishing community have to be reoriented in a manner which can
provide long-term gains and sustenance of livelihoods.
Horticulture
I. Horticulture has emerged as a successful sustainable livelihood option and needs to be
encouraged significantly.
II. Enhancing its role requires investment in infrastructure like electricity, cold storage systems,
marketing linkages, small-scale processing units and technology improvement and
dissemination.
BY GAURAV JAIN(INDIRA AWARD WINNER)
Other Alternate Livelihood Options:
Information and technology
The IT has revolutionised many sectors in the Indian economy. There is broad consensus that IT can
play a critical role in achieving sustainable development and food security in the twenty-first century.
For Agriculture
I. Governments can predict areas of food insecurity and vulnerability using appropriate
information and software tools so that action can be taken to prevent or reduce the likelihood
of an emergency.
II. It can disseminate information regarding emerging technologies and its applications, prices,
weather and soil conditions for growing different crops etc.
III. Though IT is, by itself, no catalyst of change but it can act as a tool for releasing the creative
potential and knowledge embedded in the society.
III. It also has potential of employment generation in rural areas.

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:
i. 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
is on a rise.
ii. Studies across countries have shown that organically grown food has more nutritional value
than chemical farming thus providing us with healthy foods.
iii. Since organic farming requires more labour input than conventional farming, India will find
organic farming an attractive proposition.
iv. Finally, the produce is pesticide-free and produced in an environmentally sustainable way.
Challenges
i. Popularising organic farming requires awareness and willingness on the part of farmers to adapt
to new technology.
ii. Inadequate infrastructure and the problem of marketing the products are major concerns which
thereby generate good returns on investment.
iii. Organic agriculture also generates income through exports as the demand for organically grown
crops need to be addressed apart from an appropriate agriculture policy to promote organic
farming.
iv. 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.
v. Organic produce may also have more blemishes and a shorter shelf life than sprayed produce.
vi. Moreover, 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.

BY GAURAV JAIN(INDIRA AWARD WINNER)

CONCLUSION:
• It is clear that until and unless some spectacular changes occur, the rural sector might continue
to remain backward.
• There is a greater need today to make rural areas more vibrant through diversification into
dairying, poultry, fisheries, vegetables and fruits and linking up the rural production centres
with the urban and foreign (export) markets to realise higher returns on the investments for the
products.
• Moreover, infrastructure elements like credit and marketing, farmer friendly agricultural
policies.
• A constant appraisal and dialogue between farmers’ groups and state agricultural departments
are essential to realise the full potential of the sector.
• Today we cannot look at the environment and rural development as two distinct subjects.
• There is need to invent or procure alternate sets of eco-friendly technologies that lead to
sustainable development in different circumstances.

BY GAURAV JAIN(INDIRA AWARD WINNER)