NCERT Class 11 Economics Chapter 6: Rural Development YouTube Lecture Handouts

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• Majority of poor live in rural areas

• Rural area – Agriculture is main livelihood (2/3^rd population depends on it)

• Development of villages is development of nation – MK Gandhi

Rural Development

• Development of area lagging behind in overall development of village economy

  • Literacy, education and skill development

  • Health and public health

  • Land reforms

  • Productive resources of locality

  • Infrastructure development

  • Alleviate poverty – uplift weaker sections of society

  • Engage people in farm and non-farm activities

• Share of agriculture to GDP was on decline but population related to this sector didn’t show any change

• Inadequate infrastructure, lack of alternate employment opportunities in industry or service sector, increasing casualization of employment etc. impede rural development

Credit

• Growth of economy is governed by infusion of capital & higher productivity

• As gestation time between sowing and real income is high – farmers borrow for initial investment on seeds, fertilizers, implements and religious ceremonies

• At independence, money lenders and traders exploited small and marginal farmers and landless labourers by high interest rate and debt trap

• After 1969, social banking & multiagency approach for rural credit – NABARD (National Bank for Agriculture and Rural Development) was set in 1982 to coordinate rural financing system

• Green revolution – led to diversification of credit towards production oriented lending

• Now, RRB (Regional Rural Banks), cooperatives and land development banks – dispense credit at cheap rate

• SHGs – fill the gap in formal credit system because formal credit delivery mechanism has not only proven inadequate – for loans collateral is required and SHG promotes thrift in small proportions by minimum contribution from each member – credit is given from the pooled money (repayable in small installments at reasonable interest rate) – micro credit programs

• ‘Kudumbashree’: Women-oriented community-based poverty reduction program implemented in Kerala. In 1995, a thrift and credit society was started as a small savings bank for poor women with the objective to encourage savings.

• Thrift and credit society mobilized Rs 1 crore as thrift savings. These societies have been acclaimed as the largest informal banks in Asia in terms of participation and savings mobilized.

Rural Banking

• Positive impact on output, income, employment to avail services and credit

• Food security as buffer stocks

• Except commercial banks, other formal institutions failed to develop deposit mobilization (lending to worthwhile borrowers and effective loan recovery)

• Agriculture loan default rate is high

Agricultural Market System

• Involves the assembling, storage, processing, transportation, packaging, grading and distribution of different agricultural commodities

• Farmers who did not had idea of the existing price were forced to sell at lower price

• Lot of goods were wasted due to storage issues (so intervention of private traders became must)

Methods to Improve Marketing

• Regulating market to create orderly transparent marketing conditions (develop 27,000 rural periodic markets as regulated markets)

• Provision of physical infrastructure facilities like roads, railways, warehouses, godowns, cold storages and processing units

• Cooperative marketing for fair prices – received setback due to inadequate coverage of farmer members, lack of appropriate link between marketing and processing cooperatives and inefficient financial management

• Assurance for Minimum Support Price (MSP)

• Maintain buffer stock by FCI

• Distribution of foodgrains and sugar by PDS

Alternate Marketing Channels

• Apni Mandi (Punjab, Haryana and Rajasthan)

• Hadaspar Mandi (Pune)

• Rythu Bazars (vegetable and fruit markets in Andhra Pradesh and Telangana)

• Uzhavar Sandies (farmers markets in Tamil Nadu)

Fast food chains are entering in contract with farmers to cultivate farm products of desired quality – provide them seeds, inputs and procurement at pre-decided prices

• It reduces price risk of farmers

• Expands market for farm products

• Raise income of small farmers

Diversification into Productive Activities

• Change in cropping pattern

• Shift of workforce from agriculture to allied activities

• Provide sustainable livelihood options to rural people (gainful employment in rabi season when irrigation is inadequate)

• Non-farm activities – agro-processing industries, food processing, leather, tourism

• Meat, egg, wool

• Women in agriculture and men in non-farm activities

Animal Husbandry: mixed crop livestock farming system – provides stable income, food security, transport, fuel and nutrition requirements

• Livestock provides option to 70 million small and landless laborers (poultry accounts for 58%)

• 2012 – India has 300 million cattle, 108 million buffaloes

• Milk production increased 8 times from 1951 to 2014 by operation flood

• Improved technology & promotion of good breeds of animals to enhance productivity

• Improved veterinary care & credit facilities

Fisheries – fishing community considers water as mother or provider. Inland fish production contribute to 64% value and 36% to marine sector.

• Total fish production account to 0.8% of total GDP (major states - West Bengal, Andhra Pradesh, Kerala, Gujarat, Maharashtra and Tamil Nadu)

• 60% workforce in export marketing & 40% in internal marketing are women in fishery

Horticulture – fruits, vegetables, tubers, flowers, spices

• 1/3^rd of value of agricultural output & 6% of GDP

• India is leader in mangoes, bananas, coconuts, cashew nuts and a number of spices and is the second largest producer of fruits and vegetables

• Employment options – Flower harvesting, nursery maintenance, hybrid seed production and tissue culture, propagation of fruits and flowers and food processing

IT revolution – sustainable development and food security

Tamil Nadu Women in Agriculture (TANWA): Project initiated in Tamil Nadu to train women in latest agricultural techniques. It induces women to actively participate in raising agricultural productivity and family income - in Thiruchirapalli run by Anthoniammal

Sustainable Development & Organic Farming

• Conventional agriculture relies heavily on chemical fertilisers and toxic pesticides – harm livestock, deplete soil and devastate natural ecosystem

• Organic farming - whole system of farming that restores, maintains and enhances the ecological balance; increasing demand for organically grown food to enhance food safety

• Saansad Adarsh Gram Yojana (SAGY): MPs need to identify and develop one village from their constituencies. To begin with, MPs can develop one village as a model village by 2016, and two more by 2019, covering over 2,500 villages in India.

Benefits of Organic Farming

• Substitute costlier agricultural inputs with locally produced organic inputs which are cheap

• Income by exports

• More nutritional value

• Requires more labor input

• Pesticide free and environmentally sustainable way

• Awareness for new technology

• More blemishes and a shorter shelf life

• Limited choice in production of off season crops

1995: Kisan Mehta of Prakruti (an NGO) first suggested that cotton, biggest user of chemical pesticides, could be grown organically. Tested by German Accredited Agency, AGRECO

-Manishika