RURAL DEVELOPMENT

Rural Development is a comprehensive term which essentially focus on action for the
development of area which is lacking behind in the overall development of village economy.
The overall development of rural economy comes under rural development such as:
 Development of human resources.
 Development of infrastructure.
 Land reforms.
 Poverty Alleviation program etc.
Agricultural credit:
It refers to the credit for the farming. Due to involvement of long time period and uneven
distribution of land, credit becomes the lifeline of Indian agriculture.
Sources of Agricultural credit:
There exist 2 types of sources which provide agricultural credit in rural areas.
 Non institutional sources
 Institutional sources
Non-Institutional sources:

It is the most common source of rural credit.

 Money lenders
 Zamindar
 Sahukar
 Relatives
 Traders

Merits of taking credit from Non institutional sources:

 No legal formalities are required.

 Loan is provided anytime.
 Ease in taking loan.
Demerits of taking credit from Non institutional sources:
 Higher rate of interest
 Exploitation of farmers
 Farmers were forced to sell their products to the lenders at low price
Institutional sources:
 Co-operative credit societies: They provide adequate credit to the farmers at
reasonable rate of interest.
 Commercial Banks: It is an institution which performs the functions of accepting
deposit, granting loans and making investment, with the aim of earning profit.
  Regional Rural Banks (RRB): These banks are set up to promote credit facilities in
Tural and backward areas of the country.

 NABARD: National Bank for Agriculture and Rural Development is an apex bank in
agricultural and rural credit (established in 1982) The bank has been entrusted with
the matters concerning policy, planning and operations in the field of credit for
agricultural and other economic activities in rural areas of the country.

 Self-Help Groups (SHGs): Self-Help Groups are small groups of poor people. They
help each other to solve their problems. SHGs promote small savings among their
members. The savings are kept with the bank with the name of the self-help groups.
Later on, this common fund is used to give small loans its members. The government
also provides partial financial assistance to SHGs.

Agriculture Marketing:

Agriculture marketing is a process that includes assembling, storage, processing

transportation, packaging, grading and distribution of different agriculture commodities
across the country.
Defects of agriculture marketing:
 Lack of storage facility
 Lack of effective transportation in rural areas
 Lack of marketing information in farmers
 Lack of adequate finance
 Inadequate communication
Measures taken for agriculture marketing:
 Regulated Market: The buying and selling of commodities under this market is
monitored by the committee which includes the representatives of government,
farmers and traders.
 Co-Operative Agriculture Marketing Societies: It refers to the type of marketing
societies are formed by the farmers to sell the output collectively and to take
advantage of collective bargaining in order to get better price for the crops.
 Public Distribution System: Concept of ration shops and fair price shops operates
the public distribution system in the economy. Fair price shops offer essential
commodities like rice, wheat, pulses, kerosene etc, at a lower price to the financially
lower sections (below poverty line) of the societies.
Diversification of Agricultural Activities:
Due to huge amount of rise and sole dependence of rural areas on agriculture there exist a
need to diversify the agricultural activities.
Diversification refers to the shift from crop farming to other areas of production for
employment,
It has 2 aspects:
  Diversification of crop production: It refers to changing the single cropping system
into multi-cropping system, Multi-cropping refers to production of more than 1 crop
in a year.
 Diversification of productive activities: Due to overburden of crop farming sector,
major portion of the increasing workforce were given employment opportunities in
non-farming sectors.
Non-farming primary sector includes:
 Animal husbandry (includes breeding, caring and rearing of farm animals, like cattles,
goats, duck etc).
 Fisheries (includes catching, processing and selling of water animals).
 Horticulture (includes cultivation of fruits, vegetables, flowers, medicinal plants etc).
(The revolution connected to horticulture is known as golden revolution.)

Organic farming:

It is a process of producing food naturally; under such farming the use of chemical Fertilizers
and highly yielding variety of seeds is totally prohibited.
Benefits of organic farming:
 Eco-friendly system of production (Due to non-involvement of fertilizers)
 It is a less expensive method because of use of traditional technique of production.
 Increases the level of income, as the demand for organic products is increasing rapidly
in international market.
 It provides healthier and tastier food.
 Provides more employment opportunities as it is labour intensive.
I. Multiple choice Questions

1).......... is the apex body which co-ordinates functioning of different financial Institutions. the
working for expansion of rural credit

a) NABARD b) Self Help Groups

c) Regional Rural Banks d) commercial Banks

Ans a) NABARD

2) Which Source of micro finance programme emerged to fully integrate the formal credit system into
the overall rural social and Community development?

a) Commercial Banks b) Regional Rural Banks

c) Self-help-Groups d) None of these

Ans: c) Self Help Groups.

3) Name the state which is held as a Success story in the efficient implementation of milk co-
operatives

a) Maharashtra b) Jammu and Kashmir

c) Gujarat d) Andhra Pradesh

Ans c) Gujarat

4) Why is minimum support price fixed by the government?

a) For government’s own benefit b) To safeguard the interest of farmers

c) To safeguard the interest of Consumers d) None of these

Ans: b) To safeguard the interest of farmers

5) White Revolution is associated with

a) Horticulture b) Fisheries
c) Dairying d) Animal Husbandry

Ans. c) Dairying

6) Agriculture marketing does not comprise of …………..

a) Transportation of the produce to the market place for Sale

b) Grading of the produce according to the quality
c) Storage of the Produce for sale in future
d) Credit taken to meet expenditure on agriculture

Ans. d) Credit taken to meet expenditure on agriculture.

7) The Period between ……………… is known as Golden Revolution Period.

a) 1991-2001 b) 1991-2003 c) 1993-2001 d) 1990-2003

Ans b) 1991-2003.
8) Distress Sale by the farmers refer to

a) Sale of rotten crop

b) sale of crop through commission agents
c) sale of crop at the MSP (Minimum Support Price) fixed by the government
d) Sale of crop at a very poor price

Ans d) sale of crop at a very poor price.

9) India ranks …………….. in the world in milk production

a) First b) Second c) Third d) Fourth

Ans: a) First

10) In India, ……………. accounts for the largest share in the livestock.

a) Cattle and Buffalos b) Poultry c) Sheeps and Goats d) None of these

Ans: b) Poultry

11) Operation flood is also known as

a) Green Revolution b) Golden Revolution c) White Revolution d) None of these

Ans. c) white Revolution.

12) Saansad Adarsh Gram Yojana (SAGY) is meant for

a) adoption of village by Members of Parliament

b) adoption of city by Members of Parliament
c) adoption of school by Members of Parliament.
d) adoption of children by Members of Parliament.

Ans: a) adoption of village by Members of Parliament.

13) ……………. is woman-oriented project to train the women about the latest agricultural
techniques in Tamil Nadu.

a) Kudumbashree b) Self Help Group C) TANWA d) None of the above

Ans: c) TANWA

14) In which category, the loan taken for buying agriculture equipment is generally put:

a) Short-term loan b) Medium-Term Loan c) Long-term loan d) All of the above

Ans.. b) Medium - Term Loan

15) In which year Regional Rural Banks were established ?

a) 1969 b) 1971 C) 1975 d) 1980

Ans: c) 1975

16) When Was NABARD Constituted?

a) July 1982 b) June 1982 c) July 1980 d) July 1984

Ans. a) July 1982

17) Which institute do not provide direct loan to farmers?

a) NABARD b) Commercial Bank c) Regional Rural Bank d) Primary Agriculture Debit Society

Ans a) NABARD

18) TRYSEM a programme made for the

a) Employment to retired government employees b) Employment to Rural youths

c) Employment to urban youths d) Credit to rural People.

Ans. b) Employment to Rural youths

19) ‘AGMARK' is related with

a) Agricultural Production in government farms b) Standard Quality of Agricultural Produce

c) Heavy machinery d) None of the above.

Ans: b) Standard Quality of Agricultural Produce

20) Which Industry employs the largest number of women in India?

a) Tea b) Textile c) Jute d) Coal

Ans. a) Tea

II. Fill in the Blanks.

1) Diversification of crop Production involves a shift from single cropping system to …………….
System

Ans. Multi cropping

2) ……………. (Traditional/organic) farming discards the use of chemical fertilizers and Pesticides.

Ans. Organic

3) Under livestock farming in India, ……………. accounts for the largest share, followed by Others.

Ans. Poultry

4) ……………. refers to art of the science of cultivating fruits, vegetables, tuber crops, flowers,
medicinal and aromatic plants, spices and plantation crops

Ans. Horticulture

5) Nationalisation of commercial banks took place in …………….

Ans. 1969
6) The fishing community regards the water body as …………….

Ans. Mother and Providers.

7) The scheme of Micro Finance is extended through ……………. (Regional Rural banks / Self-Help
Groups)

Ans. Self Help Group.

8) Milk Production in the country increased by more than ……………. times between 1960 and
2009.

Ans. Five times

9) ……………. is the apex institution which plans and evaluates needs policies related to rural credit

Ans. NABARD

10) Borrowings from Self Help Groups (SHGs) are mainly confined to ……………. Purposes.

Ans. Consumption.

III. Statement based Questions.

Read the following I and choose the following statements carefully correct alternative from the
following:

Alternatives:

a) Both the Statement are true

b) Both the statement are false
c) Statement 1 is true and statement 2 is false
d) Statement 2 true and statement 1 is false.

1) Statement 1: Farmers need credit due to long time gap between crop sowing and realisation of
income.
Statement 2: Farmers borrow only from non-institutional Sources to meet their credit needs

Ans. c) Statement 1 is true and statement 2 is false.

2) Statement 1: Milk co-operatives in Gujarat transformed the social and economic Condition of
Gujarat and some other parts of the Country.
Statement 2: The aim of co-operative marketing is to realise fair Price for farmer's Product

Ans. a) Both the Statement are true.

3) Statement 1: Diversification of crop Production involves a shift from single cropping system to
Multi cropping system.
Statement 2: Risk of price fluctuations in the crops increases due to diversification of crop production.

Ans. 4) Statement 2 is false 1 is true and statement

4) Statement 1: The Period between 1981 to 1991 is known as the period of Golden Revolution in
India.
Statement 2: Golden Revolution made India a world leader in the Production of milk.

Ans. b) Both the statements are false

5) Statement 1: Organic farming generates more employment opportunities as compared to

conventional farming.
Statement 2: There is a lesser yield in initial years in organic farming as compared to modern
agricultural farming

Ans. a) Both the statements are true

6) Statement 1: Self Help Groups (SHG) have emerged to fill the gap in formal credit System.
Statement 2: Formal credit system in India is not only inadequate but also not fully integrated with
rural social community development.

Ans. a) Both the Statements. are true

7) Statement 1: Agricultural diversification is essential for Sustainable livelihoods options to rural

people.
Statement 2: The need for diversification of agricultural activities arises because there is a greater risk
in depending exclusively on farming for livelihood.

Ans. a) Both the statements are true.

8) Statement 1: The institutional sources of credit are exploitative in nature.

Statement 2: The rate of interest of institutional credit is very high.

Ans. b) Both the Statements are false

9) Statement 1: Much of the agricultural employment activities are concentrated in the Kharif Season.
Statement 2: Diversification of crop production aims to shift from commercial farming to subsistence
farming.

Ans. Statement 1 is true and Statement 2 is false.

10) Statement 1: The various institutional sources used to exploit small farmers by lending them to
credit at high interest rates.

Statement 2: NABARD is the Apex Bank which works for the expansion of rural credit.

Ans. d) Statement 2 is true and Statement 1 is false.

IV. Assertion Based Reason Questions.

Read the following statements: Assertion(A) and Reason(R). Choose one of the correct alternatives.

Alternatives:
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is true but Reason (R) is false.
d) Assertion (A) is false but Reason (R) is true.

1) Assertion (A): India ranks first in the World in milk production

Reason (R): India's milk Production increased due to Operation flood.
Ans. a) Both Assertion (A) and (R) are true and Reason (R) is not the correct explanation of
Assertion(A).

2) Assertion (A): Rural banking has always given lesser attention on the credit requirements of small
and marginal farmers.
Reason (R): Marginal farmers enjoy belter credit worthiness.

Ans. (c) Assertion (A) is true but Reason (R) is false

3) Assertion (A): Organic farming generate, more employment opportunities than conventional
farming.
Reason (R): The produce of organic farming is Pesticide – free.

Ans. (b) both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of
Assertion (A).

4) Assertion (A): Rural Development includes only agricultural development

Reason (R): Rural Development aims at improving the economic and social conditions of people
living in villages

Ans. d) Assertion (A) is false but Reason (R) is true.

5) Assertion (A): Diversification of crop Production leads to shift from single- cropping system to
multi cropping System
Reason (R): It reduced the income of farmers due to increase in market risk because of price
fluctuation.

Ans. c) Assertion (A) is true but Reason (R) is false.

6) Assertion (A): At the time of Independence, money - lenders exploited small and marginal farmers
by lending to them at a high rate.
Reason (R): Such farmers did not have access of institutional sources of credit.

Ans. a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (1)

7) Assertion (A): Since independence, the economic condition of many farmers across India has
improved as they have adopted horticulture as a secondary source of income.
Reason(R): Varying climate and soil conditions have given India an added advantage to be the
producer of diverse horticultural crops.

Ans. a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A).

8) Assertion (A): Minimum Support Price (MSP) is an important step towards improving the
agricultural marketing system in India.
Reason (R): An assurance is given to the farmers that their Produce would be Purchased by the
government at the specified price.

Ans: a) Both are true Assertion (A) and Reason (R) and Reason (R) is the correct explanation of
Assertion. (4)

9) Assertion (A): After independence there was an expansion in farm and non-farm output, income
and employment.
Reason (R): Rural banking has helped farmers to avail benefits of credit facilities for meeting their
needs.

Ans. a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of
Assertion (A).

10) Assertion (A): Indian Government took various marketing measures to improve agricultural
marketing.
Reason (R): Farmers were often forced to sell at low prices due to lack of required market information

Ans. (b) both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of
Assertion (A)

V. Short Answer Type Questions:

1) What do you mean by rural development,

Rural development is a Continuous and comprehensive Socio-economic process, attempting to

improve all aspects of rural life.

2) What are the two aspects of diversification of activities?

(i) Diversification of crop Production

(ii) Diversification of Productive activities

3) What is organic farming?

Organic farming is a system of farming that relies upon the use of organic inputs like green manure,
compost, biological pest control etc., for cultivation.

4) What is Micro Finance?

Micro finance is a credit Scheme extended to the poor through Self Help Groups (SGHs)

5) Why have Self Help Groups (SHGs) been set up?

The Self Help Groups have been set up to 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 rates at reasonable interest

6) Why do people seek employment in non-farm sector?

People seek employment in non-farm sectors as agriculture is already over-crowded and cannot offer
additional employment.

7) State the meaning of Agricultural Marketing

Agricultural marketing is the process that involves assembling, storage, processing. transportation,
packaging, grading and distribution of different agricultural commodities across the country.

8) Define Golden Revolution

Golden Revolution refers to the period in which there was a tremendous rise in the Production of
horticultural Products like fruits, vegetables etc.
9) Define White Revolution

The movement for massive rise in the milk production in India is termed as White Revolution.

10) Jan Dhan Yojna helps in the rural development Do you agree statement? Explain.

Jan Dhan Yojna was a government programme aimed to integrate each and every individual to the
finance system by opening Zero Balance Accounts.
Through this programme many individuals were actually connected with the formal sector that helped
to access easy and affordable credit.

11) Why do farmers need credit?

Due to long time gap between crop sowing and realisation of income, farmers need credit.

12) What are the benefits of organic farming?

 Eco friendly system of production.

 It is less expensive method.
 It provides healthier and tastier food.
 It provides more employment.

VI. Short Answer type Questions.

1) Mention some obstacles that hinder the mechanism of agricultural, marketing.

 Faulty weighing and manipulation of accounts by traders which results in exploitation of

farmers when they sell their products to traders
 Farmers do not have proper storage facilities to store their Produce for selling later at a better
price. Hence they are forced to sell even at lower price to save the produce from decaying.
 Due to lack of knowledge about the prices prevailing in the markets, farmers are forced to sell
their produce at low prices.

2) What are the alternative channels available for Agricultural Marketing? Give Some examples.

* Alternative marketing channels were developed to bring the farmers in direct contact with the
consumers. These channels help in increasing farmers share in prices paid by the consumers.

Examples:

(i) Apni Mandi (Punjab, Haryana and Rajasthan)

(ii) Hadaspar Mandi (Pune)
(iii) Rythu Barjars (Vegetable and fruit markets in Andhra Pradesh)
(iv) Uzhavar Sandhais (Farmers markets in Tamil Nadu)

3) Why is agricultural diversification essential for sustainable livelihoods?

* Diversification is essential because there is greater risk in depending exclusively on farming for
livelihood and to provide productive sustainable livelihood options to rural People.
* Most of the agricultural employment activities are concentrated in the Kharif season while during
the Rabi season, it becomes difficult to find gainful employment in areas lacking in irrigation
facilities.
* Therefore, expansion into other sectors is essential to provide supplementary gainful employment
and in realising higher levels of income for rural people to overcome poverty and other problems.
VII. Long Answers type Questions.

1) Explain the steps taken by the government in developing the rural markets

(i) Regulation of Markets:

* The government has established regulated markets where the sale and purchase of the produce is
monitored by market committee consisting of representatives of government, farmers and traders.

(ii) Improvement in physical Infrastructure:

* Through this measure the government ensures the improvement in Physical infrastructure such as
roads, railways. warehouse, cold storages etc

(iii) Co-operative Marketing:

* The government encourages farmers to form Producer marketing co-operative Societies, so that they
get better price for their produce, through collective Sale.

(iv) Supportive Policies:

(a) Minimum support Price (MSP): The government fixes MSP for agricultural Output. This Policy
assures a minimum Income to the farmers.

b) Maintenance of buffer stock of wheat and Rice: When market price falls below the MSP, then
government purchases the produce from the farmers at MSP and maintains buffer stock.

c) Distribution of food grains and sugar: The buffer stocks of foodgrains and sugar are distributed
among the poor through the Public Distribution System (PDS) at subsidised prices.

2) Distinguish between 'Green Revolution' and 'Golden Revolution'.

Ans. Differences between Green Revolution and Golden Revolution are as follows:

Green Revolution:
The introduction of High-Yielding Varieties (HYV) of seeds and the increased use of fertilisers,
pesticides and irrigation facilities which led to substantial increase in output of cereals is known as the
Green Revolution.
 It led to increase in the production of rice and wheat.
 It made India self- sufficient in the production of foodgrains.
 It provided food security and raised agricultural incomes.
Golden Revolution:
The rapid growth in the production of diverse horticultural crops such as fruits, vegetables, tuber
crops, flowers, medicinal and aromatic plants, spices and plantation crops is known as Golden
Revolution.
 It led to increase in the production of fruits, vegetables, flowers, aromatic plants, spices, etc.
 It made India a world leader in the production of mangoes, bananas, coconut and spices.
 It provided nutrition and sustainable livelihood options.
3) Bring out the importance of animal husbandry, fisheries and horticulture as a source of
diversification.

 Importance of Animal Husbandry

The following points explain the importance of animal husbandry as a source of diversification

(i) Today, this sector alone provides alternate livelihood options to a significant number of women and
over 70 million small and marginal farmers including landless labourers.

(ii) Meat, eggs, wool and other by-products are also emerging as important productive sectors for
diversification.

 Importance of Fisheries

(i) Today, total fish production accounts for 0.9% of the total GDP. Kerala, Gujarat, Maharashtra and
Tamil Nadu are the major producers of marine products,

(ii) Fishing has become a source of women empowerment. About 60% of the workforce in export
marketing and 40% in internal marketing are women.

 Importance of Horticulture

Diverse horticultural crops such as fruits, vegetables, tuber crops, flowers, medicinal and aromatic
plants, spices and plantation crops are grown in India.

(i) These crops play a vital role in providing food and nutrition, along with sustainable employment
opportunities.

(ii) During 1991-2003, 'Golden Revolution' took place. Horticulture became highly productive during
this period due to planned investment.

(iii) 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.)

4) What is organic farming and how does it promote sustainable development?

 Organic farming is a technology which restores, maintains and enhances the ecological
balance.

 Organic farming is an eco-friendly technique of growing crops, which promotes sustainable

development.

 In other words, organic agriculture is a whole system of farming that restores, maintains and
enhances the ecological balance and enhances the food safety, thus encouraging the practices
towards sustainable development.

VIII. Case Based Question

A. In agriculture, due to long time gap between crop sowing and realisation of income, farmers
are in strong need for credit. Farmers need money to meet initial investment on seeds. fertilisers,
implements and other family expenses of marriage, death, religious ceremonies, etc. So, credit is one
of the important factors, which contribute to agricultural production. An efficient and effective rural
credit delivery system is crucial for raising agricultural productivity and incomes.

Questions:

1. Which one of the following is not a non-institutional source of credit?

(a) Money lenders (b) Co-operative Credit (c) Trader and commission agents d) Land development
bank

2. _________________ (NABARD/RBI) is the Apex Bank which coordinates the functioning of

different financial institutions, working for expansion of rural credit.

3. Regulated markets were organised to protect the farmers from the malpractices of consumers.
(True/ False)

B. Prior to independence, farmers, while selling their produce to traders, suffered from faulty
weighing and manipulation of accounts. Farmers who did not have the required information on prices
prevailing in markets were often forced to sell at low prices. They also did not have proper storage
facilities to keep back their produce for selling later at a better price. Measures that were initiated to
improve the marketing aspect.

Questions:

1. Government improve agriculture marketing system through (Controlling/Regulation).

2. Agricultural marketing is a process that involves the:

(a) Transportation (b) Packaging (c) Grading (d) All of these

3. The first step was regulation of markets to create orderly and transparent marketing conditions
(True/False).

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