Rural Development: Key Areas and Importance

Rural Development and Its Importance

• Focuses on actions for the overall development of the village economy
• Addresses various challenges requiring fresh initiatives
• Agriculture remains the major source of livelihood

Key Areas for Development

• Human resources are key for rural development
• Literacy, especially female literacy, education, and skill development are crucial
• Public health and sanitation need to be addressed
• Land reforms and development of local productive resources are essential
• Infrastructure is part of rural development: electricity, irrigation and transport
• Construction of village roads and highways must be prioritised
• Agricultural research, extension, and information dissemination is key to success
• Alleviating poverty and improving living conditions for the weaker sections can be done by emphasising productive employment
• Farm and non-farm activities can be provided with means to increase productivity
• Opportunities to diversify into non-farm activities should be provided

Credit and Marketing in Rural Areas

• Growth of the economy depends on capital infusion for agriculture and non-agriculture
• Farmers often borrow to meet initial investments like seeds, fertilisers and family expenses
• Pre-1969: Moneylenders and traders lend to farmers at high rates, keeping them in debt traps
• Post-1969: India adopted social banking and a multi-agency approach to meet rural credit needs
• National Bank for Agriculture and Rural Development (NABARD) was established in 1982, as an apex body that coordinates rurar institutions
• The Green Revolution led to diversification of credit towards production-oriented lending
• Today, rural banking includes commercial banks, regional rural banks (RRBs), cooperatives, and land development banks

Self-Help Groups (SHGs)

• SHGs bridge the gap in the formal credit system by enabling small proportions from each member
• Credit is given to needy members with reasonable interest rates
• 54 lakh women in India are members of SHGs
• Micro-credit programs provide approximately ₹10,000-15,000 per SHG; ₹2.5 lakhs as Community Investment Support Fund (CISF)
• Despite the success, expansion and promotion of rural banking slowed due to the large loan default rates
• 50 crore people have opened bank accounts in recent years due to the Jan-Dhan Yojana

Agricultural Marketing System

• Agricultural marketing involves assembling, storage, processing, transportation, grading, and distribution across the country
• Pre-independence, farmers suffered from faulty weighing and manipulation of accounts
• Without information or storage, farmers had to sell at low prices (more than 10% wasted)
• The first step to regulating agricultural activities was to create orderly conditions
• Need to develop around 27,000 rural periodic markets as regulated market places
• Infrastructure like roads, railways, warehouses, cold storages and processing units are quite inadequate
• Milk cooperatives were successful in Gujarat; can offer fair prices for farmers

Government Initiatives

• Policy instruments aim to:
  • Assure minimum support prices (MSP) for agricultural products
  • Maintain buffer stocks of wheat and rice by the Food Corporation of India
  • Distribute food grains and sugar through PDS to protect the income of the farmers
  • Provide food grains at a subsidised rate to the poor

Alternate Marketing Channels

• Increase farmers’ incomes when sell directly to reduce price risks of farmers
• Examples:
  • Apni Mandi (Punjab, Haryana, Rajasthan)
  • Hadaspar Mandi (Pune)
  • Rythu Bazars (Andhra Pradesh, Telangana)
  • Uzhavar Sandies (Tamil Nadu)
• Several national and multinational fast food chains are entering into contracts

Diversification into Productive Activities

• Diversification includes changes in cropping patterns and shifting workforce from agriculture to other activities
• Needed to reduce risk from agriculture and give sustainable livelihood options
• There's a need to focus on allied activities: non-farm employment and other emerging livelihoods

Animal Husbandry

• There are many segments in the non-farm economy:
  • Agro-processing
  • Food processing industries
  • Leather and Tourism
• India uses the mixed crop-livestock farming system
• Livestock provides stability in income, food security, transport, fuel, and nutrition
• The sector provides options to over 70 million small, marginal farmers and labourers
• Poultry accounts for 61 per cent of livestock in India
• Milk increased ten times, 1951-2016 because of 'Operation Flood; all farmers pool their milk which is then graded and marketed
• Gujarat is a successful implementer of milk cooperatives

Fisheries and Horticulture

• Fisheries sector contributes today 0.9 per cent of total GDP
• The main challenges for workers in the Indian sector are:
  • Underemployment
  • Low per capita earnings
  • Illiteracy
  • Indebtedness
• The need to increase credit facilities through cooperatives and SHGs for women
• India grows fruits, vegetables, tuber crops, flowers, medicinal and aromatic plants, spices and plantation crops
• The sector contributes ⅓ of agriculture output and 6% of GDP
• Flower harvesting, hybrid seed production and tissue culture are highly remunerative options for women

Sustainable Development and Organic Farming

• Harmful effects of chemical-based fertilisers and pesticides are rising
• Conventional agriculture relies heavily on chemicals
• Organic farming offers a means to substitute costlier agricultural inputs
• Farmers are becoming more aware and willing to adapt to new tech
• 10% of food system under is based on organic farming
• Organic food commands a higher price of 10-100% than conventional food

Conclusion

• Rural areas are vibrant
• Diversification must occur into:
  • Dairying
  • Poultry
  • Fisheries
  • Vegetables and fruits
• There must be linking between rural production centres;urban and (export) markets

This lesson explores rural development, focusing on actions for the overall development of the village economy. It addresses key areas such as human resources, public health, land reforms and infrastructure. Agriculture remains the major source of livelihood.