XI_Economics_Indian Economic Development_Ch-9_Rural Development_QuesAns.

Class XI

Economics

Indian Economic Development

Chapter – 9

Rural Development

Q.1. What do you mean by rural development? Bring out the key issues in rural development.
Answer. Rural development is a comprehensive term. It essentially means a plan of action for the development of areas which are lagging behind in socio-economic development.
The key issues in rural development are:

→ Human capital formation: Investment should me made in education. health and technical skill development to make people more efficient and able to do work.
→ Development of Productive resources: The rural people are mainly dependent on agriculture to earn their livelihood that usually suffers from low productivity, lack of infrastructure and disguised unemployment. Therefore, efforts must me made towards development of alternative occupation through available resources.
→ Land Reforms: Land reforms with technical reforms allow the farmers to use modern techniques and methods which increase the productivity and aggregate volume of farm output. Land reforms also lead to efficient and optimum use of land, enabling large scale production.
→ Development of Infrastructure: Infrastructure the basic level for all kind development such as electricity, irrigation, bank, credit, transportation, development of markets etc.
→ Alleviation of Poverty: Special measures should be taken to tackle poverty and bringing about significant improvement in the living conditions of the weaker sections of the people emphasizing access to productive employment opportunities.

Q.2. Discuss the importance of credit in rural development.

Answer. Credit Plays an important role in rural development Growth of rural economy depends primarily on infusion of capital from time to time to realize higher productivity in agriculture and non-agriculture sectors. The long gestation period between sowing and harvesting of the crops, credit is extended to the farmers for meeting their initial requirements of farm inputs like seeds, fertilizers, etc. The farmers require funds for meeting their general and specific needs. They also require credit for buying cattle, purchasing land or irrigation facilities.

Q.3. Explain the role of micro-credit in meeting credit requirements of the poor.
Answer. The credit and financial services provided to the poor through Self Help Groups (SHGs) and non government organizations are known as micro credits. The Self Help Groups are playing a crucial role in meeting the credit requirements of the poor by inculcating saving habits among the rural households. The individual savings of many farmers are pooled together to meet the financial requirements of the needy members of the SHGs.

            The members of these groups have been linked with the banks. In other words, SHGs enable the economically poor individual to gain strength as part of a group. Also, the financing done through SHGs reduces transaction costs for both the lenders and the borrowers. The National Bank for Agricultural and Rural Development (NABARD) played a key role in providing credit at special concessional rates. Presently, more than seven lakhs SHGs are operating across different rural areas. SHGs' programs are becoming popular among the small and marginal borrowers owing to their informal credit delivery mechanism along with minimum legal formalities.

Q.4. Explain the steps taken by the government in developing rural markets.
Answer. The various steps taken by the government in developing rural markets are:

→ Regulated Markets: The regulation of markets to creates orderly and transparent market conditions. The sale and purchase of the products are monitored by the Market Committee which consist of farmers, government agents and traders. It helps in enforcement of standard weights, fixation of charges, setting of disputes etc. which is helpful for both farmers and consumers.

→ Development of Infrastructure: The government has taken measures to develop infrastructure like roads, warehouses, railways, cold storages etc. which help in transportation and storage facilities.

→ Co-operative marketing: It is a measure to ensure a fair price to farmers Member farmers sells their surplus to the cooperative society which substitutes collective bargaining in place of individual bargaining.

→ Policy Instruments: Various policy instrument has also been initiated by the government such as fixation of minimum support price, Buffer stock and Public Distribution system which aimed at increasing the income of farmers as well as providing food grains at subsidized rate to poor.

Q.5. Why is agricultural diversification essential for sustainable livelihoods?
Answer. The agricultural diversification means diversification of crop production and shifting of agricultural workforce to other allied activities such as livestock, poultry, fisheries, etc. and non-agriculture sector to raise income and to explore alternative sources of revenues. This is essential because:

→ A substantial portion of Indian farming is dependent on the vagaries of monsoon, making it a risky affair to rely upon solely. Accordingly, the need for diversification is required to enable the farmers to earn from other alternative non-farm occupations. This lessens excess burden on agriculture by reducing disguised unemployment.

→ The kharif season opens up ample opportunities for agricultural employment. However, owing to lack of irrigation facilities, the farmers fail to get gainful employment opportunities during the Rabi season.. Therefore, the need of diversification arises during the Rabi season.

→ Agriculture being over crowded cannot further generate employment opportunities.. Therefore, the prospects of the non-farm sectors should be opened up in the rural areas to provide job opportunities, thereby, diverting workforce from the already crowded agricultural sector.

→ The non farm sector has several segments that possess dynamic linkages. Such linkages enhance the healthy growth of an economy.

Q.6. Critically evaluate the role of the rural banking system in the process of rural development in India.

Answer. Rural banking has played a crucial role in the process of rural development in India. The National Bank for Agricultural and Rural Development (NABARD) has made a significant progress in the field of rural credit. It cannot be denied that the institutional credit has freed the farmers from the trap of money lenders. But, on the other hand, institutional credit is not free from deficiencies. The rural or institutional credit has invariably been associated with security or collateral. Consequently, a substantial number of farmers can't avail credit. Also, the commercial banks failed to encourage the habit of thrift among farmers. In addition to this, the leniency on the part of the government to collect taxes was another setback in the rural banking. This further led to the emergence of the feeling among the farmers of not repaying the borrowed amount. This increased the defaulter's rate and led to financial unfeasibility for the rural banks.

Q.7. What do you mean by agricultural marketing?

Answer. Agricultural marketing is a mechanism through which these goods reach different places depends on the market channels. Agricultural marketing is a process that involves the assembling, storage, processing, transportation, packaging, grading and distribution of different agricultural commodities across the country.

Q.8. Mention some obstacles that hinder the mechanism of agricultural marketing.

Answer. Some obstacles that hinder the mechanism of agricultural marketing are:
→ Farmers suffer from faulty weighing and manipulation of accounts.

→ Due to misinformation about market prices and conditions farmers are forced to sell their product at lower prices. 

→ The farmers lack access to proper storage facilities to store their produce for future sell at better prices.

→ The farmers cannot avail agricultural credit, leading to their exploitation by the moneylenders.

Q.9. What are the alternative channels available for agricultural marketing? Give some examples.

Answer. There are various alternative channels available for agricultural marketing under which the farmers can sell their product directly to the consumers, it increases their incomes. Some examples of these channels are Apni Mandi (Punjab, Haryana and Rajasthan); Hadaspar Mandi (Pune); Rythu Bazars (vegetable and fruit markets in Andhra Pradesh and Telangana) and Uzhavar Sandies (farmers markets in Tamil Nadu). Another alternative channel for agricultural marketing is the contract of direct sales between the farmers and the national and international companies. These companies offer advance payments to the farmers for supplying products at pre-determined rates. These alternative agricultural channels raise farmer's income and simultaneously reduce price risk for the small and marginal farmers.

Q.10. Distinguish between 'Green Revolution' and 'Golden Revolution'.

Green Revolution	Golden Revolution
The combined use of HYV seeds and increased use of fertilisers and developed irrigation facilities jointly to increase the production of rice and wheat. This increase in the production of the food grains is known as the Green Revolution.	The rapid growth in the production of the horticultural crops such as fruits, vegetables, tuber crops, flowers, etc. is known as Golden Revolution.
It led to increase in the production of food grains, especially, of rice and wheat.	It led to increase in production of fruits, vegetables, flowers, aromatic plants, spices, etc.
As a result of this revolution, India became self-sufficient in the production of wheat and rice.	As a result of this revolution, India became a world leader in the production of mangoes, bananas, coconut and spices.

Q.11. Do you think various measures taken by the government to improve agricultural marketing are sufficient? Discuss.

Answer. The government has taken various measures to improve agricultural marketing such as regulation of markets, development of infrastructure like cold storage, roads, railways and policy instruments but despite various attempts of the governments private trade (by moneylenders, rural political elites, big merchants and rich farmers) predominates agricultural markets. Also, there are many obstacles in the successful agricultural marketing system:
→ It is found that farmers often fall prey to defecting weighing techniques and misappropriation of accounts.

→ Farmers lack knowledge of market prices and market conditions which forces them to sell their produce at a lower price.

→ Storage facilities are insufficient which forces the farmers to sell their produce at a lower price right after harvesting. Also, insufficient storage makes the crops vulnerable to pests and bad weather.

→ There is lack of institutional sources of finance which forces the farmers to fall back on moneylenders for obtaining credit.

→ Transportation facilities are insufficient as a result of which the farmers are unable to sell their produce at far off places.

Q.12. Explain the role of non-farm employment in promoting rural diversification.
Answer. The agricultural sector in India is overcrowded, a major portion of labour force needs to find alternate employment opportunities in other non-farm sectors. Diversification towards non-farm sectors not only to reduce the risk from agriculture sector but also to provide productive sustainable livelihood options to rural people. Non-farm economy has several segments in it; some possess dynamic linkages that permit healthy growth while others are in subsistence, low productivity propositions. The dynamic sub-sectors include agro-processing industries, food processing industries, leather industry, tourism, etc. Those sectors which have the potential but seriously lack infrastructure and other support include traditional home-based industries like pottery, crafts, handlooms etc. Majority of rural women find employment in agriculture while men generally look for non-farm employment. In recent times, women have also begun looking for non-farm jobs.

Q.13. Bring out the importance of animal husbandry, fisheries and horticulture as a source of diversification.

Answer. Animal husbandry, fisheries and horticulture can be very important as a source of diversification in rural economy. While animal husbandry and horticulture can be practiced in almost every village, fishery can be practiced only at select locations. However, these activities will help in ensuring alternate sources of income to the farmers. These activities are also more sustainable compared to farming which involves just two major cropping seasons in a year. The success of Operation Flood has shown that dairy farming can help in making the farmers prosperous. At present, about 70 million small farmers earn their livelihood from animal husbandry. Animal husbandry can be especially helpful in ensuring livelihood for landless farmers. Similarly, the success of Blue Revolution has helped in improving the condition of the fishing community. Today, the total fish production accounts for 0.7% of the GDP.

Q.14. ‘Information technology plays a very significant role in achieving sustainable development and food security’ — comment.

Answer. Information technology (IT) plays a very significant role in achieving sustainable development and food security. Governments can predict areas of food insecurity and vulnerability using appropriate

            information and software tools so that action can be taken to prevent or reduce the likelihood of an emergency. It also has a positive impact on the agriculture sector as it can disseminate information regarding emerging technologies and its applications, prices, weather and soil conditions for growing different crops etc. Though IT is, by itself, no catalyst of change but it can act as a tool for releasing the creative potential and knowledge embedded in the society. It also has potential of employment generation in rural areas. Thus, it can be said that IT plays a vital role in assuring food security and sustainable development in India.

Q.15. What is organic farming and how does it promote sustainable development?
Answer. Organic farming is a whole system of farming that restores, maintains and enhances the ecological balance. In other words, this system of farming relies upon the use of organic inputs for cultivation. The traditional farming involves the use of chemical fertilizers, toxic pesticides, etc. that harms the eco system drastically. So, this type of farming is practiced to produce toxic-free food for the consumers while simultaneously maintaining the fertility of the soil and contributing to ecological balance. This type of farming enables eco friendly sustainable economic development.

Q.16. Identify the benefits and limitations of organic farming.

Answer. Benefits of Organic Farming are:

→ It offers a means to substitute costlier agricultural inputs (such as HYV seeds, chemical fertilizers, pesticides etc.) with locally produced organic inputs that are cheaper and thereby generate good returns on investment.

→ The use of chemical fertilizers leads to erosion of soil fertility. As organic farming discards the use of chemical fertilizers, this farming is practiced to produce non-toxic food for the consumers without degrading the soil fertility.

→ Organically grown food has more nutritional value than chemical farming thus providing us with healthy foods.

→ Since organic farming requires more labour input than conventional farming, India will find organic farming an attractive proposition.

→ It also generates income through exports as the demand for organically grown crops is on a rise.

Limitations of Organic Farming:

→ Organic Farming offers lesser yield than the conventional farming. Therefore, the productivity of the Organic Farming is lower than that of the conventional farming.

→ The popularity of organic farming depends on the awareness and willingness of the farmers to adopt this technology. Due to lower productivity, farmers lack initiative to adopt Organic Farming techniques.

→ The inadequate infrastructure and problem of marketing are the major concerns that need to be addressed to promote Organic Farming.

→ As Organic Farming offers lesser yield than conventional farming, this farming is not financially viable for the small and marginal land-holdings farmers.

Q.17. Enlist some problems faced by farmers during the initial years of organic farming.
Answer. In the initial years, it has been observed that the yields from Organic Farming are lesser than the modern agricultural farming. So, the farmers found it difficult to undertake large scale production. Also, due to the low yield per hectare, this technique was not financially viable for the small and marginal workers. The products obtained from organic farming have shorter life and are quickly-perishable. Moreover, the choice in production during off-season is quite limited in Organic Farming. Despite these shortcomings in the initial years, India has attained comparative advantage in Organic Farming due to labour intensive techniques. Hence, the availability of labour in abundance popularised Organic Farming in India.