Revision Notes

Class - 11 Economics
Chapter 6 - Rural Development Notes

Rural Development
It is a broad word that focuses on taking action to develop regions that are falling
behind in the overall growth of the village economy.
Objectives of Rural Development
● Increasing productivity of the agricultural sector.
● Generating alternative means of livelihood in the rural sector.
● Increasing access to education and health care in rural communities.

● Infrastructural development.

● Human resource development in rural areas.

● Poverty alleviation.

Key Initiatives in rural development:

● Crop diversification reduces production risks and encourages
commercialization of agriculture.

● Promotion of organic farming with a view to make crop cultivation

environmentally friendly as well as a sustainable process over a long period
of time.

● Human resource development.

● Healthcare improvement, addressing both cleanliness and public health.
● Diversification of production activities in order to identify alternatives to
crop-cultivation as a source of sustainable existence.

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 ● A marketing mechanism that ensures the farmer receives a fair price for his
produce.

Rural Credit:
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 time between seeding
and harvesting is very long. As a result, farmers have to borrow money to meet their
demands at this time.

Sources of Rural credit:

The availability of rural credit can be divided into two categories:

● Non-institutional Sources: These are the traditional sources of agricultural

credit in India. They include money lenders, relatives, traders, commission
agents and landlords.

● Institutional Sources: Institutional sources include cooperative credit,

commercial banks, regional rural banks, the government, land development
banks, National Bank for Agriculture and Rural Development (NBNR), self-
help groups etc.

Agricultural Marketing System:

Agricultural Marketing is the process of putting together, storing, processing,
transporting, packaging, grading, and distributing various agricultural commodities
throughout the country.

Measures to Improve Agricultural Marketing :

Following independence, the government has taken a number of steps to enhance
the country's agricultural marketing system.

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In order to regulate the markets, it has enacted the following measures:
● Regulated Markets: The first measure was regulation of markets, to create
orderly and transparent marketing conditions. This is set up to safeguard
farmers from the misdeeds of sellers and brokers.

● Cooperative Marketing: Marketing societies are formed by farmers to sell

the output collectively and to take advantage of collective bargaining for
obtaining a better price. However, cooperatives have not been able to function
properly in the recent past due to inadequate coverage of farmer members,
inefficient management etc.

● Infrastructural facilities: Govt. had also provided infrastructural facilities

like roads. railways, warehousing. old storage and processing units in order to
develop the rural sector of India.

● Standardization and Grading: Grading and quality control helps farmers to

get good prices for quality products produced by them. Also it simplifies the
task, and enhances the efficiency of their work by proper segregation and
bifurcation of output of different grades and standards.

● Policy Instruments:
○ Minimum Support Price: It is the price set by the government of India
in order to protect farmers' interests in terms of the prices of their
agricultural products like wheat, rice, maize, cotton, sugarcane, pulses,
and others. To help farmers recover their losses, the government is
willing to buy any amount of grains from them at a price greater than
the market price.
○ Buffer Stock: Food Corporation of India holds stock of crops like
wheat and rice in order to balance the price differences due to demand
and supply, or face emergencies.

○ Public Distribution System: PDS is used to distribute food grains and

sugar. These tools are designed to secure farmers' revenue while also
delivering foodgrains to the poor at a reduced price.

Defects of Agricultural Market in India :

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The existing agricultural marketing system has a number of flaws.
The following are some of the flaws that cause the marketing system to be
disorganised.

● Insufficient storage facilities: Lack of storage facilities for food grain and
crops has damaged the products either by rats or insects or due to rain.
● Distress Sale: Most Indian farmers are poor and they have no capacity to wait
for a better price. They sell the commodities at whatever price is available,
and hence as a result, they have to sell their output at a low price to village
money lenders or traders in distress.
● Lack of transportation: As a result of inefficient transportation system,
farmers cannot reach the market to sell their produce at a fair price. Hence,
place utility cannot take place.

● Middlemen: Long chain of middlemen or intermediaries between the

cultivator and the consumer also reduces the profit of the producer, with a
major chunk being taken by the mediator himself.

● Other issues: There are also other defects like lack of institutional finance,
lack of guidance etc. which makes the Indian marketing system disorganized.

Diversification of Agricultural Activity:

Diversification includes 2 aspects:

● Diversification of crop production: Crop diversification entails switching

from a single cropping system to various cropping systems. This also involves
shifting cropping patterns from food grains to cash crops. The main aim is to
promote the shift from subsistence farming to commercial farming.

● Diversification of Productive Activities: As the agricultural sector is already

congested, the majority of the growing labour population has to look for work
and employment in non-agricultural industries, and allied activities such as
(livestock, poultry, fisheries etc. This will provide an alternative source of
money while also providing a sustainable livelihood. It includes:

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 ○ Animal husbandry: Animal husbandry is the practice of livestock
production, as well as breeding and taking care of cattles etc in order to
gain economically.

○ Fisheries: For the fishing communities, the water bodies are the
provider and mother. Hence, water sources are an integral part of the
lives of the fishing communities. Fisheries in India has progressed
significantly as a result of increased financial allocations and the
adoption of new technologies in fisheries and aquaculture.

○ Horticulture: Horticulture is the branch of agriculture concerned with

growing plants for human consumption, therapeutic purposes, and
ornamental gratification.
○ Other Options: IT has played a crucial role in looking for options other
than agricultural and farm activities which would help in the sustainable
development.

Organic farming
Organic farming is the natural way of growing food. Synthetic chemical fertilisers
and genetically engineered organisms are not used in this procedure. It is both
environmentally friendly and necessary for long-term development. It has a zero
impact on the environment.

Advantages of Organic Farming

● It replaces more expensive agricultural inputs like HYV seeds, chemical
fertilisers, herbicides, and so on with locally generated organic inputs that are
less expensive and offer good returns on investment.

● It generates income through export as the demand for organically grown crops
is on the rise.

● It provides nutritious food since organically cultivated food has more nutrients
than food produced through chemical farming.
● It has the potential to create more jobs in India because it requires more
labourers to grow organic crops than chemically generated commodities.

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 ● Organic food is pesticide free and is produced in an environmentally
sustainable way, thus positively contributing towards the society.

Disadvantages of Organic Farming

● Lack of awareness: Farmers are unaware and uneducated, hence they aren’t
aware much of this concept. Though, through raising farmer awareness and
willingness to adopt new methods, this situation could be improved.

● Lack of infrastructure: There is no sufficient infrastructure or marketing

facilities available to support the growth of organic crops. Organic farming
should be supported by an adequate agriculture policy.

● Production costs: High production costs for growing organic crops, as well
as no subsidies in this sector also acts as a hindrance for the development of
this sector.

Sustainable Development
It is the development which aims to develop the present generation without affecting
the quality of life of future generations. Sustainable development does not ban the
use of any resources, but rather tries to limit their use so that they are preserved for
future generations.

Operation Flood
Launched in 1966, Operation Flood is a system of milk cooperatives. This system
emphasises the pooling of milk (as per different grading/ quality standards) by
farmers through cooperatives societies. This leads to an increase in the quantum of
sales as well as the market value of the product. The production in milk is also said
to have increased four-fold due to this system.

Labour Force
It refers to the actual number of people available for work.

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Cooperative Marketing
It is a system in which farmers organise marketing societies to sell their produce
collectively and take advantage of collective bargaining tactics.

Non-farm sector
It refers to jobs in the government. manufacturing. services, construction, mining,
retail, etc.

Labour intensive Process

It refers to a process or industry that uses a significant quantity of labour to produce
its products.

Role of IT Industries in Agriculture Development

● Many sectors of the Indian economy have been transformed by information
technology. There is a broad agreement that IT will play a critical role in
achieving sustainable development and food security in the 20 th century.

● Through proper information and software tools, the government has been able
to predict areas of food insecurity and vulnerability to prevent or reduce the
situations of emergency food requirements.

● It also has a positive impact on the agricultural sector as it circulates

information regarding technologies and its application prices, weather and soil
condition for growing different crops.

● This has resulted in a greater understanding of agriculture, and the related

aspects.

● The aim of increasing the role of information technology is to make every

village a knowledge centre, where IT provides a sustainable option of
employment and livelihood.

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