Chapter Notes - Rural Development Commerce Notes | EduRev

Economics Class 11

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Commerce : Chapter Notes - Rural Development Commerce Notes | EduRev

The document Chapter Notes - Rural Development Commerce Notes | EduRev is a part of the Commerce Course Economics Class 11.
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Rural development is a comprehensive term which essentially focuses on action for the development of area which is lagging behind in overall development of village economy.

Objectives of rural development:
1. Increasing productivity of agricultural sector.
2. Generating alternative means of livelihood in rural sector.
3. Promoting education and health facilities in the rural areas.

Key issues in rural development.
(i) A robust system of rural credit.
(ii) A system of marketing that ensures remunerative price to the farmer for his produce.
(iii) Diversification of crops that reduce risks of production and induces commercialisation of farming.
(iv) Diversification of production activity with a view to find alternative means of sustainable living other than crop-cultivation.
(v) Promotion of organic farming with a view to make crop cultivation environmental friendly as well as a sustainable process over a long period of time.
(vi) Honest system of land reforms.
(vii) Development of human resource like health, addressing both sanitation and public health.
(viii) Development of human resource including literacy, education and skill development.
(ix) Development of Infrastructure like electricity, irrigation, transport facility, etc.
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 gestation period between sowing and harvesting is high. so, farmers have to borrow to fulfill their needs during this period.

Sources of rural credit in India.
1. Non-institutional sources are money lenders, traders and commission agents, landlord,
relatives and friends.
2. Institutional sources are as follow:
(i) Co-operative credit societies.
(ii) Commercial Banks
(iii) Regional Rural Banks
(iv) NABARD (National Bank for Agriculture and Rural Development.) (established in 1982)
(v) Self Help Groups (SHGs)
The above institutional structure of rural banking which is called multi agency system which has initiated by govt. in 1969.
Agricultural marketing means all those activities which includes-gathering the produce after harvesting, processing the produce, grading the produce according to its quality,
packaging the produce according to preferences of buyers, storing the produce for future sale and selling the produce when price is lucrative.
In other words, Agricultural marketing covers the services involved in moving an agricultural product from the farm to the consumer.

Defects of agricultural marketing
(i) Inadequate warehouses
(ii) Multiplicity of middlemen
(iii) Malpractice in unregulated markets.
(iv) Lack of Adequate finance
(v) Inadequate means of transport and communication.

Measures adopted by the government to improve marketing system.
(i) Regulation of markets.
(ii) Co-operative agricultural marketing societies.
(iii) Provision of warehousing facilities.
(iv) Subsidised transport.
(v) Dissemination of marketing information.
(vi) Buffer stocks and minimum support price (MSP)
(vii) Public Distribution System (PDS)
(viii) Alternative marketing channels
(ix) Improvement of physical Infrastructure

Diversification in agriculture activities-It has the two aspects.
1. Diversification of crop production refers to a system of multiple cropping rather than mono cropping. It may also mean a shift from subsistence farming to commercial farming.
It has the three advantages:
(i) It lowers the risk of farmer on account of failure of monsoon.
(ii) It enhances the scope for commercialisation of farming.
(iii) Minimise the market risk arising due to price fluctuation.

2. Diversification of productive activities imply a shift from crop farming to non-farming areas of employment. Non-farm areas of employment include.
(i) Animal husbandry.
(ii) Fisheries.
(iii) Horticulture.
(iv) Cottage and household industry.
(v) Information technology-every village a knowledge Centre

It has following advantages:
1. Reduce the risk from agriculture sector.
2. Provide ecological balance.
3. Provide sustainable livelihood option to people living in village.
Organic farming is a system of farming that maintains, enhances and restores the ecological balance. It helps in sustainable development of the agricultural sector, In organic forming, farmers use organic manure, bio fertilizers and organic pesticides.
Advantages of organic farming:
(i) Inexpensive process.
(ii) Generates income.
(iii) Healthier and tastier food.
(iv) Solves unemployment problem.
(v) Environment friendly.

Limitation of Organic farming:
(i) Yields from organic farming is less than modern agricultural farming in initial years.
(ii) Organic produce have shorter shelf life than sprayed produce.
(iii) Choice in production of off-season crops is quite limited in organic farming.
Organic farming involves labour-intensive process of production of labour so India has comparative advantage in organic farming.

Operation Flood
It is a system of milk co-operatives, launched in 1966. This system emphasised the pooling of milk by farmers through co-operatives societies.
This increased the quantum of sale as well the market value of product. The production in milk increased four-fold. This system if commonly called operation flood.
Labour force: It refers to actual member of people available for work.
Non-farm sector: It refers to jobs in govt. manufacturing, services, construction, mining, retail, etc.
Labour intensive Process: It refers to the process or industry that requires a large amount of labour to produce its goods.

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