Indian Economic Development Chapter 6 Rural Development

Agricultural is the major source of livelihood in the rural sector.

Rural development is a comprehensive term. It focuses on action for the development of areas which are lagging behind in the overall development of the village economy.

Rural development can be achieved through increase in the productivity of grains, cereals, vegetables and fruits. Also, the farmers should be given opportunity to diversify into various non-farm productive activities such as food processing. Rural development can also be done by providing access to health care, sanitation facilities at workplaces and homes and educaiton for all etc.

The share of agriculture sector in GDP (Gross Domestic Product) of India is on a decline but the proportion of dependent on this sector has not shown any significant decline.

After the initiation of reforms, the growth rate of agriculture sector has declined to 2.3% during the 1990s which was lower than earlier years. The reasons for this decline are inadequate infrastructure, alternate employment opportunities in the industry or service sector, increase in casualisation of employment in agriculture etc.

The mechanism through which different agricultural goods like grains, vegetables and fruits reach different places is known as agricultural marketing.

The farmers suffer from many problems relating to agricutural marketing like faulty weighing, manipulation of accounts, forced to sell at lower prices, lack of proper storage facilities, lack of infrastructure facilities, inadequate coverage of farmers by co-operatives and inefficient financial management.

Cooperative marketing has failed to gain adequate success in India because of inadequate coverage of farmer members and lack of appropriate link between marketing and processing management.

The areas of focus for diversification of agriculture are allied activities, non-farm employment and other emerging alternatives of livelihood.

The industries based on agriculture are called agro-processing industries e.g. food processing industries, leather industry, tourism etc.

Following are alternative channels available for agricultural marketing.

1. Cooperative credit societies.

2. Reserve Bank of India.

3. Commercial Banks.

4. Regional Rural Banks.

5. National Bank for Agricultural and Rural Development.

6. Self–Help Groups (SHGs).

Indian farmers require credit for (i) productive and (ii) non-productive purposes.

(i) Non-institutional sources, and

(ii) Institutional sources.

Money-lenders occupy the prime place in non-institutional agricultural finance in India.

The policy instruments are (i) assurance of minimum support price for 21 agricultural products, (ii) maintenance of buffer stock of wheat and rice by FCI and (iii) distribution of food grains and sugar through PDS.

Rural development is defined as improving living standards of mass of low income population residing in rural areas and making the process of their development self-sustaining.

Cooperative societies, Regional Rural Banks, Commercial Bank, SHGs.

1. Limited lending to the weaker section, 2. Too much formalities

Crop-loans are short-term loans. They are generally repayable after harvesting and marketing to crops.

NABARD.

1. Regularising the agricultural markets and 2. Cooperative marketing.

Diversification of crops includes two aspects – (i) one relates to diversification of crops production, and (ii) the other relates to a shift of workers from agriculture to other allied activities (live-stock, poultry, fisheries, etc.) and non-agriculture sectors.

Live-stock, poultry, fishery.

Agro processing, food processing activities, pottery.

(i) Dynamic sub-sectors (such as agro-processing industries, food process industries, leather industry) and (ii) Traditional household based industries (such as pottery, crafts, handloom).

Organic farming is a way of farming which exlcudes the use of chemical fertilizers, insecticides etc. and is primarily based on the

principles of use of national organic inputs and biological plant protection measures.

Operation flood is a system whereby all the farmers can pool their milk produce according to different grading (based on quality) and the same is processed and marketed to urban centres through cooperations.

1. Properly managed organic farming reduces or eliminates water pollution.

2. It helps conserve water and soil on the farm.

1. There were no proper storage facilities.

2. There was faulty weighting.

1. Promotion of cooperative agricultural societies.

2. Development of regulated markets where marketing practices have been standardized.

Rural credit means credit for the farming families.

In 1969.

Agriculture is the main source of livelihood in rural sector.

Two aspects of diversifications are:

(i) Diversification of crop-production and

(ii) Diversification of production activity/ employment.

Diversification of crops implies production of a diverse variety of crops rather than one specialised crop.

Diversification of production activity implies a shift from crop-farming to non-farm areas of production activity to raise income and explore alternative avenues of sustainable livelihood.

Diversification of crop-production is needed to minimise the market risk arising due to price flucatuaions. It is also required to minimise the risk occurring due to monsoon failure.

In kharif crop.

More investments should be made in infrastructure like electricity, cold storage systems, marketing linkage, small scale processing units etc.

In Kharif season, there are many opportunities for gainful employment, whereas in Rabi season, it becomes difficult to find gainful employment.

Gujarat state.

Water bodies consist of sea, oceans, rivers, lakes, natural aquatic ponds, streams etc.

Rural development focuses on the development of those types of area which are lagging behind in the overall development of the village economy.

Kerala, Gujarat, Maharashtra and Tamil Nadu are major producers of marine products.

MSP (Minimum Support Price) is declared by the Government every year before the sowing season to provide incentives to the farmers for raising the production of these crops.

Even today more than 10 percent of goods produced in farms are wasted due to lack of storage.

The aims of the instruments like assurance of minimum support price for agricultural products etc. are:

(i) To protect the income of the farmers.

(ii) To provide food-grains at a subsidised rate to the poor.

Despite Government intervention, moneylenders, rural political elites, big merchants and rich farmers predominate agricultural markets.

Self help groups have emerged recently to fill the gap in the formal credit system. The SHGs promote thrift in small proportion by a minimum contribution from each member.

It is alleged that loan can be taken from cooperative credit societies. The emergency and purpose of loan are neglected.

Micro–credit helps the farmers in the following manner in meeting their credit requirements:

1. It helps in empowerment of women by providing credit for their consumption purposes.

2. It helps in promoting the small savings which can be pooled and utilised in cases of emergencies.

3. It helps in saving the agriculturists from the exploitation of money lenders and traders.

4. It provides loans to farmers at reasonable interest rates repayable in small instalments.

Agricultural diversification is essential for sustainable livelihood because:

1. It helps in diversification of crops production which enables the farmers to earn money throughout the year.

2. It facilitates shifting of workers from agriculture to other allied activities like animal husbandary, poultry, fishing, horticulture etc.

3. Diversification helps in reducing the risk of agricuturists and enables them to get various opportunities to get productive sustainable livelihood options.

4. Diversificaiton is essential to provide supplementary gainful employment and in realising higher levels of income for rural people to overcome poverty.

Rapid expansion of the banking system has a positive effect on rural farm and non-farm output, income and employment, especially after the green revolution. It has helped the farmers to avail services and credit facilities and a variety of loans for meeting their production needs. However, there still exists a number of problems with Indian banking system in meeting rural credit requirements because of the chronic under-performance of formal credit institutions and high incidence of overdue instalments by the farmers. Agricultural loan default rates have been chronically high. Except commercial banks, other formal institutions have failed to develop a culture of deposit mobilisation. Moreover, about 50% of the defaulters have been categorised as 'Wilful defaulters' which poses hurdles in the smooth functioning of the banking system. Hence, the banking system is required to change its outlook from just being lenders to building up relationship banking with the borrowers.

In India, the farming community uses the mixed crop-livestock as is shown in figure below:

Livestock production provides increased stability in income, food security, transport, fuel and nutrition for the family without disrupting other food producing activities. Today, livestock sector alone provides alternate livelihood options to over 70 million small and marginal farmers including landless laboure. A significant number of women also find employment in the livestock sector among different categories of livestock as is shown in the chart above, Indian Dairy Sector has performed well over the last three decades. Milk production in the country has increased by more than four times during 1960-2002.

There is quite a wide gap between the crop sowing and realisation of income after production hence, the farmers have to borrow money from various sources to meet their initial investments on seeds, fertilisers, implements and other family expenses (like marriage–death, religious ceremonies etc). At the time of independence, farmers were exploited by local money lenders and traders. To save the farmers from the exploitation of moneylenders and traders, the government adopted the concept of social banking and multi-agency approach during the year 1969. In a sequel to this attempt, it established National Bank for Agriculture and Rural Development (NABARD) in 1982 as an apex body to coordinate the activities of all institutions involved in the rural financing system.

Following are the problems faced by farmers during the initial years of organic farming:

1. The percentage of produced goods remains less as compared to chemically produced goods.

2. It is expensive hence it is impossible for small and medium scale farmers to use it on a large scale.

3. It is unsuitable for seasonal farming.

Dynamic sub-sectors : 1. Agro-processing industries, 2. Food processing industries, 3. Leather industries, 4. Tourism.

Traditional household base industries:

1. Crafts, 2. Pottery, 3. Handloom.

The weaknesses of agricultural marketing system prior to independence:

1. There was absence of marketing information.

2. There were superfluous middleman and mal-practices.

3. There was absence of grading and standardisation.

4. The weak financial position of the farmers forced to sell their products to the money lenders and middle men.

5. There was faulty weighing.

6. The agricultural markets lacked storing facilities.

All this means that:

1. People engaged in farm and non-farm activities in rural areas have to be provided with various means that help them to increase productivity.

2. They also need to be given opportunities to diversify into various non-farm productive activities such as food-processing.

3. More affordable access to healthcare, sanitation facilities at work-shops and homes.

4. Top-priority to education for all for rapid rural development.

Multi-agency approach to rural banking : Multi-agency approach to rural banking means that there are many institutional sources of rural credit.

Institutional sources of rural credit : The institutional structure of rural banking today consists of:

1. Commercial Banks, 2. Regional Rural Banks (RRBs), 3. Cooperative Banks, 4. Land Development Banks, 5. Cooperative Credit Societies.

The socio-economic status of fishermen is lower due to the problems faced by them. Major problems faced by them are as follows:

1. Rampant under-employment., 2. Low per capita earnings., 3. Absence of mobility of labour to other sectors., 4. A high rate of illiteracy., 5. Indebtedness.

Diversification have two aspects. They are as follows:

1. One aspect relates to change in cropping pattern (Diversification of crop production).

2. The other aspect relates to a shift of workers from agriculture to other allied activities (such as livestock, poultry, fisheries etc.) and non-agriculture sector.

Credit in rural development is important in the following ways:

1. To realise higher productivity in agriculture adequate credit is required by agriculturist.

2. The timely availability of credit helps in enhancing the confidence of the farmer as there is time gap between crop sowing and realisation of income after production.

3. Credit from government agencies helps in relieving the farmers from the burden of local moneylenders and traders. That provides strong base for an efficient growth of agriculture sector.

4. More than two-thirds of India's population depends on agriculture. It is only the credit and marketing facilities that can help them to meet not only their personal expenditures (marriages, ceremonies, other rituals etc.) but also productive expenditures.

5. Credit enables the farmers to have faith in themselves as Indian agriculture, even after fifty nine years of independence, is still dependent on the vagaries of monsoons.

The government has taken following measures to improve the rural markets:

1. Introduction of the concept of regulated markets : The government has tried to regulate the markets to create an orderly and transparent marketing condition.

2. Provision of physical infrastrucutre facilities : The government has tried to provide infrastructure facilities to farmers like roads,

railways, warehouses, godowns, cold storage and processing units. The current infrastructure facilities are quite inadequate to meet the growing demand and need to be improved.

3. Cooperative marketing : The government has taken the initiative to promote cooperative marketing inspired by the success of milk cooperatives in transforming the social and economic landscape of Gujarat and some other parts of the country.

4. Introduction of policy instruments : The government has introduced certain instruments to protect the income of the farmers which are as follows:

1. Assurance of minimum support prices for 24 agricultrual products.

2. Maintenance of buffer stocks of wheat and rice.

3. Distribution of food grains and sugar through public distribution system.

Rural development implies the development of all those rural sector activities which have lagged behind in the developmental processes. Different surveys, economists, processes of development have made it clear that until and unless some spectacular changes occur, the rural sector might continue to remain backward. There is a greater need today to make rural areas more vibrant through diversification into dairying, poultry, fisheries, vegetables and fruits and linking up the rural production centres with the urban and foreign (export) markets to realise higher returns on the investments for the products. Besides, infrastructure elements like credit and formulating farmer-friendly agricultural policies and a constant appraisal and dialogue between farmer groups and state agricultural departments are essential to realise the full potential of the sector.

Agricultural marketing encompasses all activities in moving farm products from the producers to the final consumers such as storage, transport, processing etc. In India, agricultural marketing was regarded as operationally inefficient and exploitative in character. Hence to improve the position of agricultural marketing following things are required:

(a) Facilities for storing goods.

(b) Adequate and economical transport.

(c) Eliminination of intermediaries.

(d) Basic information of market conditions to get better prices for the produce.

The above mentioned requirements for efficient agricultural marketing can be also classified into:

(i) Promotion of cooperative agricultural marketing societies.

(ii) Development of regulated markets where marketing practices have been standardised so as to provide encouragement to farmers to come to mandis to dispose off their produce and prevent them from exploitation in the hands of dalals.

3. Grading and standardisation of produce to help the farmer to fetch better prices.

4. Developing warehousing facilities, road transport etc.

5. Declaration of support price that offers a minimum price to the farmers for their produce.

Agricultural diversification is a system of farming that encourages production of a variety of plant and animals and their products. Non-farm employment provides greater income stability, economies of size also reduces uncertainty of business. It involves maximum number of persons as it is labour intensive in nature. Small and marginal holdings account for about three-fourths of the total operational holdings in the country, operating over one-fourths of the total area. Majority of small and marginal farmers cultivate mainly low value subsistence crops. In the absence of farm and non-farm employment opportunities, they are forced to live below poverty line. So this problem is solved with the help of commercialisation and diversification of small farmers within and outside agriculutre and their proper integration with local and global markets. This is helpful not only in liberating the small and marginal farmers from the poverty trap, but also to meet the country's growing demands for fruits, vegetables, milk and milk products, meat, fishes, eggs etc. which generally show rising trends with increasing levels of per capita income in the economy.

Organic farming is a sustainable farming system which maintains the long term fertility of the soil and uses loss of the earth's finite resources to produce high quaility, nutritious food. Organic farming uses crop rotation, the application of animal manures and composts, mechanical cultivation and natural integrated pest control to maintain soil fertility to supply plants with the nutrients they need and to control insects, weeds and other pests.Organic farming has the capability to take care of many problems associated with agriculture. It has positive effects on environment. It is a natural farming. The quality of food is high. It helps the farmer to become self-sufficient in his requirement for agro-inputs and helps in reducing farmers' plights.

So, for unpolluted environment and sustainable development, organic farming is the answer. Organic farming helps in getting safe, healthy and nutritious food.

Animal Husbandary : In India, livestock sector provides alternate livelihood options to over 70 million small and marginal farmers including landless labourers. India has about 287 million cattle, including 90 million buffaloes. The performance of the Indian Dairy Sector over the last three decades has been quite impressive. Because of 'Operation Flood' from 1966 onwards, the production of milk has increased by more than four times 'Operation Flood' is a system whereby all the farmers pool their milk produce according to different grading and the same is processed and marketed to urban centres through cooperatives. In this system the farmers are assured of a fair price and income from the supply of milk to urban markets. Gujarat state can be cited as an example of success story in the efficient implementation of milk cooperatives. Meat, eggs, wool and other by products are also emerging as important productive sectors for diversificaiton.

Fisheries : In India, after progressive increase in budgetary allocations and introduction of new technologies in fisheries and aquaculture, the development of fisheires has come a long way. Presently fish production from inland sources contribute about 49% of the total fish production and the balance 51% comes from the marine sector, accounting (total fish production) 1.4% of total GDP for Kerala, Gujarat, Maharashtra and Tamil Nadu are the major producers of marine products. The overall socio-economic status of fishermen is comparatively lower than that of other back ward sections of our economy. Under employment, low per capita earnings, absence of mobility of labour to other sectors and a high rate of illiteracy and indebtedness are some of the major problems associated with fishermen. There is a need to increase credit facilities, cooperatives and SHGs for fishermen to meet the working capital requirements for marketing.

3. Horticulture : Our country India has a varying climate and soil conditions. As the consequence of this, we have a large number of horticultural crops like fruits, vegetables, tuber crops, flowers, medicinal and aromatic plants, spices and plantation crops. These crops play an important role in providing food and nutrition besides giving employment opportunities. The period after 1991 is known as 'Golden Revolution' in the field of horticulture as excellent growth has taken place in the field of horticulture. India has emerged as a world leader in producing a variety of fruits and spices and second largest producer of fruits and vegetables. Economic conditions of many farmers employed in horticulture has improved and it has become a means of improving livelihood for many unpriviledged classes too. Flower harvesting, nursery maintenance, hybrid seed production and tissue culture propagation of fruits and flowers are highly remunerative employment options for women in rural areas. This sector provides employment to around 19% of the total labour force in India.

Diversification of agricultural activities means that small farmers would not only undertake seasonal crop farming but also animal husbandary, fishing, agro–forestry, industrial and other non-farm economic–activities as either self employed or wage earners.

The other important area of diversification is information technology. It has revolutionized many sectors of the Indian economy. It is playing a critical role in achieving sustainable development and food security in the twenty-first century e.g. ability of the government to predict areas of food insecurity and vulnerability using appropriate information and software tools so that actions can be taken to prevent or reduce the likelihood of an emergency. It has a positive impact on the agricultural sector as it disseminates infomation regarding emerging technologies, and its application, prices, weather and soil conditions for growing different crops etc. It has also brought 'knowledge economy' which can act as a catalyst of change. It also has potential of employment generation in rural areas.

Benefits of organic farming:

(i) In organic farming synthetic chemicals, (petroleum based) are not required.

(ii) Organic crops contain more secondary metabolites than the conventionally grown plants. Secondary metabolites are substances that form part of plants' immune systems and which also help to fight cancer in humans.

(iii) Organic fields have more nutrients in the soil.

(iv) Organic fields have more biological activities and biodiversity.

(v) Organic crop production rates change little over time.

(vi) Organic soil fertility increases over time.

(vii) Organic crops have measurably higher levels of vitamins.

Disadvantages of organic farming :

(i) Its produce is more expensive

(ii) Organic farming is more work intensive.

(iii) Organic farming uses animal manures which can harbour deadly bacteria.

(iv) Organic farming yields on average around 20% less produce than does conventional farming.

(v) Organic farmers periodically lose all or large portions of their crops to pests.

The growth of horticulture sector at a spectacular speed is called 'Golden Revolution'. The period between 1991-2003 is called the period of 'Golden Revolution' because during this period, the planned investment in horticulture became highly productive and the sector emerged as a sustainable livelihood option. India has emerged as world leader in producing a variety of fruits like mangoes, bananas, coconuts and cashew nuts and a number of spices and Green Revolution in India began in the 1960s, through the introduction of high-yield crop varieties and application of modern agricultural techniques, and led to an increase in food production in India. It began after high-yielding wheat was first introduced to India in 1963. India's programme of Green Revolution was led by Dr. M. S. swaminathan, known as 'the Father of the Green Revolution in India'. The introduction of high-yielding varities of seeds and the increased use of chemical fertilizers and irrigation led to the increase in production needed to make India self-sufficient in food grains.

The government has taken several initatives for diversification as a means of agricultural development. These are as follows:

1. Launching a technology mission for the Integrated Development of Horticulture in the North-eastern Region : This programme will establish effective linkages between research, production, extension, post harvest management processing, marketing and exports and bring about a rapid development of agriculture in the region.

2. Implementing National Agriculture Food Insurance Scheme : It will cover crop and oilseeds and annual commercial and horticulture crops. Small and marginal farmers are eligible for fifty percent subsidy under the scheme.

3. Operationalising Technology Mission on Cotton : This mission will have separate mini-missions on technology generation, product support and extension, market infrastructure and modernisation of grinding and pressing units.

4. Provision of Capital Subsidy : 25 percent subsidy will be given for construction/ modernisation/ expansion of cold storages and storages for horticultural produce.

5. Creation of Watershed Development Fund : This fund was established at the national level for the development of rain-fed lands.

6. Strengthening Agricultural Marketing : Greater attention to be paid for development of a comprehensive efficient and responsive marketing system for domestic marketing as well as for exports by ensuring proper quality control and standardization.

7. Seed Bank Scheme : About 7-8% of certified seed produced in the country will be kept in buffer stocks to meet any eventuality arising out of drought, flood or any other form of natural calamities.

Ill effects of chemical fertilizers based farming : Following are the ill-effects of chemical based farming:

1. Heavy imports of fertilizers impose a huge burden on our balance of trade.

2. Continuous use of ground water irrigation through tube-wells has reduced the ground water level much below. If ground water resources are destroyed then it will be very difficult to restore them.

3. The use of chemical fertilizers will make the soil less fertile than even before. Its use led to the degradation of soil health. It is very much clear from the experience of farming in Punjab.

4. Excessive use of chemical fertilizers and pesticides is also responsible for health hazards and environmental pollution.

Significance of rural development : The statement given by Mahatma Gandhi is relevant even today. We must attach significance to rural development due to following reasons :

1. Agriculture — the mainstay of Indian economy : Agriculture is the mainstay of Indian economy. More than two-third of India's population depends on agriculture. It has high share in employment. It provides employment to 52 percent of the work force.

2. Providing raw materials to manufacturing industries : Agriculture plays an important role in the development of the industrial sector. It provides raw materials like cotton, wood, sugarcane, jute, oil seeds etc. to the manufacturing industries.

3. Providing food-grains : Agriculture provides food-grains.

4. People living in object poverty : One third of rural India still lives in object poverty.

Key issues in Rural Development:

1. Development of human resources including illiteracy, more specifically female literacy, education and skill development.

2. Health, addressing both sanitation and public health.

3. Land reforms.

4. Development of the productive resources of each locality.

5. Infrastructure development like electricity, irrigation, credit, marketing, transport facilities etc.

6. Special measures for alleviation of poverty and bringing about significant improvement in the living conditions of the weaker sections of the population emphasising access to productive employment opportunities.

Problems relating to agricultural finance:

1. Inadequate agricultural credits : The sources of institutional finance are inadequate to meet the requirements of agricultural credit. Farmers still depend on moneylenders for their credit needs.

2. Regional inequalities : There exists regional inequalities in the distribution of institutional credit.

3. High rate of interest charged by Mahajans etc. : Due to insufficient credit provided by the formal financial institutions, the farmers have to depend on non-formal financial institutions such as mahajans, moneylenders for meeting their financial needs. The non-formal financial institutions charge very high interest on the loan provided by them.

4. Marginal and small farmers do not become beneficiary : Small and marginal farmers receive only a very small portion of the institutional credit. A lot portion of institutional credit is taken away by the rich farmers. In this way, marginal and small farmers do not become a good beneficiary.

5. Problem of over-dues and default rate : Rural banking is suffering from the problems of large amount of over-dues and default rate. Recovery of agricultural loans has become a serious problem in the functioning of rural banking. About 50% of defaulters are wilful defaulters. This constitutes a threat to the existence of rural banking. It is an alarming situation.

6. Failure to encouraging saving : With the possible exception of the commercial banks, other formal institutions have failed to develop a culture of deposite mobilisation.

Positive role of rural banking:

1. Rural banking has helped in raising farm and non-farm out by providing services and credit facilities to farmers.

2. It has helped in achieving food security which is reflected in the abundant stocks of grains.

3. It provides long-term loans with better repayment options. It, thus helps in eliminating moneylenders from the scene.

4. It had a positive effect on income and employment especially after the green revolution.

Negative aspect of rural banking:

1. The formal institutions (except commercial banks) of rural credit have failed to develop a culture of deposit mobilisation.

2. The sources of institutional finance are inadequate to meet the requirements of agricultural credit.

3. Vast proportion of rural households are out of the credit network as some kind of collateral security is required for taking loan.

4. Small and marginal farmers receive only a very small portion of the institutional credit as a large portion of institutional credit is taken away by the rich farmers.

5. Recovery of agricultural loans has become a serious problem.

Solutions to problems:

1. The banks should change their approach from just being lenders to building up relationship banking with the borrowers.

2. The habit of thrift should be inculcated among the farmers.

3. The farmers should be guided how to make efficient utilisation of financial resources.

4. An effective mechanism for the recovery of agricultural loans should be evolved at the earliest.

5. Cooperative credit societies in rural areas should be strengthened and their working should be made transparent and efficient.

Farmers need credit for:

1. Purchasing seeds, tools, manure, and fertilizers.

2. Digging wells, fencing, buying machinery.

3. Purchasing land, costly equipments etc.

4. Personal expenses like marriage, death, religious ceremonies etc.

Rural banking system consists of:

1. Commercial banks.

2. Regional rural banks

3. Cooperative credit societies.

4. Land development banks.

NABARD : National Bank for Agriculture and Rural Development was set up in 1982. It is an apex institution entrusted with all matters concerning policy, planning and operations in the field of rural credit and related economic activities. It has gone a long way in liberating the farmers from the debt-trap of mahajans and moneylenders.

Because mahajans and moneylenders used to lend to the small/marginal farmers and landless labourers on high interest rate and manipulated the accounts.

Kudumbashree.

First rank.

TANWA (Tamil Nadu Women in Agriculture) Project.

As a member of co-operative agricultural marketing, they find themselves better bargainers in the market getting better price of their produce due to collective sale.

Various types of non-farm production activities in rural areas : Following are various types of non-farm production activities in rural areas :

1. Animal Husbandry : Animal Husbandry is the most important non-form area of employment in India. It is also called live-stock farming. Poultry, cattle, and goats/sheep are important components of live-stock farming in India. It provides increased stability in income, food security etc. Milk production in the country has increased by more than four times between 1960-2002. Meat,eggs,wool and other by products are also emerging as important productive sectors for diversification. Live-stock farming in India is an important source of employment for women. However live-stock sector is not free from problems. Though the number of live-stock is very impressive but its productivity is quite low as compared to other countries.

2. Fisheries : Kerala, Maharashtra, Gujarat and Tamil Nadu are the principal states in India where fisheries is an important source of livelihood in the rural areas. The fishing community in India depends almost equally inland sources and marine sources of fishing. All the sources are called 'water bodies' The fishing community calls the 'water bodies' as the 'mother' or 'provider'. In India after progressive increase in budgetary allocation and introduction of new technologies in fisheries and aquaculture, the development of fisheries has come a long way. Despite a significant segment of rural population engaged in fisheries, this sector contribute merely 2% to GDP. A large share of fish-worker families are poor. Fishing community faces many problems such as rampant unemployment, low per capita earnings, absence of mobility of labour to other sectors, a high rate of illiteracy, indebtedness etc.

3. Horticulture: Horticulture crops include fruits, vegetables, flowers etc. Over times there has been a substantial increase in area under these crops. These crops play a vital role in providing food and nutrition, besides providing opportunities for employment. Economic condition of many farmers engaged in horticulture has improved. Presently, India is a second largest producer of fruits and vegetables in the world. We are emerging as leading producer of mangoes, bananas, coconuts, cashewnuts etc. For enhancing the role of horticulture,more investments should be made in infrastructure like electricity, cold storage systems, marketing linkages etc.

4. Other alternate livelihood operation i.e. Information Technology : Information technology revolutionalised many sectors in the Indian economy. lt plays a very significant role in acheiving sustainable development and food security. It has potential of employment generation in rural areas. It has ushered in a knowledge economy. It has also a positive impact on the agriculture sector. With the help of it, the quality and quantity of crops can be increased.

Obstacles in agricultural marketing : Following are four obstacles in agricultural marketing.

1. Malpractices in unregulated markets : A number of malpractices prevails in Indian markets. Brokers take undue advantages of the ignorance and illiteracy of farmers. They use unfair means to cheat them.

2. Lack of adequate warehouses : We do not have adequate ware-houses. Due to it, the cultivator is obliged to sell the produce immediately after harvesting at very low prices.

3. Indebtedness : Generally the farmers are in debt. They are obliged to sell their harvests to their concerned money lenders at the prices fixed by them.

4. Inadequate market information : A farmer does not have adequate information regarding prices prevailing in the different markets. In such a situation he has to depend mostly on hearsay and reports received from local traders. He not brings his product to the market not when the prices are profitable but when they needs money.

Distress sale is that sale which is made to the moneylender at low price unwillingly by the farmers.

Three drawbacks of rural banking:

1. Banking credit has invariably been linked with collateral. Due to this, a large section of small and marginal holders has remained out of its ambit.

2. Eying on the gains of population, the government has been very lament on the recovery of loans, because of which there has been large number of wilful defaulters.

Main objectives of comparative credit societies:

1. To ensure time and increased flow of credit to the farmers.

2. To spread credit facilities across all regions of the country.

3. To provide adequate credit support to areas covered by special programmes of development.

4. To gradually eliminate the money-lenders from the markets.

Following four steps have been taken by the government for improving argicultural marketing system:

1. Regulated markets have been established to remove most of the evils of unorganised market system.

2. The government has encouraged the formation of co-operative agricultural marketing societies so that farmers may get better price of their produce through collective sale.

3. The government has taken measures to develop infrastructural facilities like roads railways etc.

4. Electronic media and print-media are being widely used by the government to disseminate market information to the farmers particularly relating to price.

Instruments aiming at protecting the income of the farmers and providing food-grains at a subsidised rate to the poor : These instruments are as follows :

1. Fixing of minimum support price : Presently government fixed MSP for 24 agricultural products. MPS is announced before the sowing season and assures the minimum price. It provides long-term guarantee to the farmers.

2. Buffer stock : Buffer stock is the stock of food-grains namely wheat and rice procured by the government through Food Corporation of India (FCI). The buffer stock is created by the Government to distribute food-grains in the deficit areas and among the poorer strata of society at a price lower than the market price.

3. Public Distribution System (PDS) : It is a system under which the food procured by FCI is distributed.

D.

All the above

D.

All the above.

B.

1969

B.

1991

B.

Poor women

C.

50%

A.

Two percent

D.

All the a bove.