Rural Development Class 11 Notes: CBSE Economics Chapter 5

What is Rural development?

Rural development is the process of improving the quality of life and economic well-being of people living in rural areas. It involves providing better access to basic services like healthcare, education, clean water, and transportation, as well as promoting agriculture, creating jobs, and supporting small businesses to help rural communities grow and thrive.

Rural Credit:

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 time between seeding and harvesting is very long. As a result, farmers have to borrow money to meet their demands at this time.

Sources of Rural credit:

The availability of rural credit can be divided into two categories:

• Non-institutional Sources:  These are the traditional sources of agricultural credit in India. They include money lenders, relatives, traders, commission agents and landlords.

• Institutional Sources: Institutional sources include cooperative credit, commercial banks, regional rural banks, the government, land development banks, National Bank for Agriculture and Rural Development (NBNR), self-help groups etc.

Rural Banking — a Critical Appraisal:

Rural banking plays a crucial role in supporting the economic development of rural areas by providing essential financial services to people who often have limited access to banks. It helps farmers, small businesses, and individuals by offering loans, savings accounts, and other financial products that can improve their livelihoods. However, there are challenges, such as the lack of infrastructure, awareness, and financial literacy among rural populations, which can make it difficult for them to fully benefit from these services. Despite these challenges, rural banking is essential for empowering rural communities and promoting overall growth.

Agricultural Marketing System:

Agricultural Marketing is the process of putting together, storing, processing, transporting, packaging, grading, and distributing various agricultural commodities throughout the country.

Measures to Improve Agricultural Marketing :

Following independence, the government has taken a number of steps to enhance the country's agricultural marketing system. 

In order to regulate the markets, it has enacted the following measures:

• Regulated Markets: The first measure was regulation of markets, to create orderly and transparent marketing conditions. This is set up to safeguard farmers from the misdeeds of sellers and brokers.

• Cooperative Marketing: Marketing societies are formed by farmers to sell the output collectively and to take advantage of collective bargaining for obtaining a better price. However, cooperatives have not been able to function properly in the recent past due to inadequate coverage of farmer members, inefficient management etc.

• Infrastructural facilities: Govt. had also provided infrastructural facilities like roads. railways, warehousing. old storage and processing units in order to develop the rural sector of India.

• Standardization and Grading: Grading and quality control helps farmers to get good prices for quality products produced by them. Also it simplifies the task, and enhances the efficiency of their work by proper segregation and bifurcation of output of different grades and standards.

1. Policy Instruments:

1. Minimum Support Price: It is the price set by the government of India in order to protect farmers' interests in terms of the prices of their agricultural products like wheat, rice, maize, cotton, sugarcane, pulses, and others. To help farmers recover their losses, the government is willing to buy any amount of grains from them at a price greater than the market price.

2. Buffer Stock: Food Corporation of India holds stock of crops like wheat and rice in order to balance the price differences due to demand and supply, or face emergencies.

3. Public Distribution System: PDS is used to distribute food grains and sugar. These tools are designed to secure farmers' revenue while also delivering food grains to the poor at a reduced price. 

Defects of Agricultural Market in India :

The existing agricultural marketing system has a number of flaws. 

The following are some of the flaws that cause the marketing system to be disorganized.

• Insufficient storage facilities: Lack of storage facilities for food grain and crops has damaged the products either by rats or insects or due to rain.

• Distress Sale: Most Indian farmers are poor and they have no capacity to wait for a better price. They sell the commodities at whatever price is available, and hence as a result, they have to sell their output at a low price to village money lenders or traders in distress.

• Lack of transportation: As a result of inefficient transportation system, farmers cannot reach the market to sell their produce at a fair price. Hence, place utility cannot take place.

• Middlemen: Long chain of middlemen or intermediaries between the cultivator and the consumer also reduces the profit of the producer, with a major chunk being taken by the mediator himself.

• Other issues: There are also other defects like lack of institutional finance, lack of guidance etc. which makes the Indian marketing system disorganized.

Emerging Alternate Marketing Channels: 

Emerging alternate marketing channels refer to new and innovative ways of selling products that are different from traditional methods like stores or markets. These channels include online platforms, direct-to-consumer sales, and farmer markets, where producers can sell their goods directly to consumers without middlemen. These new channels help small businesses and farmers reach more customers, reduce costs, and offer better prices for both sellers and buyers. They are becoming increasingly popular as they provide more flexibility and opportunities for everyone involved in the market.

Diversification of Agricultural Activity:

Diversification includes two aspects:

1. Diversification of crop production: Crop diversification entails switching from a single cropping system to various cropping systems. This also involves shifting cropping patterns from food grains to cash crops. The main aim is to promote the shift from subsistence farming to commercial farming.

2. Diversification of Productive Activities: As the agricultural sector is already congested, the majority of the growing labor population has to look for work and employment in non-agricultural industries, and allied activities such as (livestock, poultry, fisheries etc. This will provide an alternative source of money while also providing a sustainable livelihood. It includes:

1. Animal husbandry: Animal husbandry is the practice of livestock production, as well as breeding and taking care of cattle etc. in order to gain economically.

2. Fisheries: For the fishing communities, the water bodies are the provider and mother. Hence, water sources are an integral part of the lives of the fishing communities. Fisheries in India has progressed significantly as a result of increased financial allocations and the adoption of new technologies in fisheries and aquaculture.

3. Horticulture: Horticulture is the branch of agriculture concerned with growing plants for human consumption, therapeutic purposes, and ornamental gratification.

4. Other Options: IT has played a crucial role in looking for options other than agricultural and farm activities which would help in the sustainable development.

Organic farming 

Organic farming is the natural way of growing food. Synthetic chemical fertilizers and genetically engineered organisms are not used in this procedure. It is both environmentally friendly and necessary for long-term development. It has a zero impact on the environment.

 Advantages of Organic Farming

• It replaces more expensive agricultural inputs like HYV seeds, chemical fertilizers, herbicides, and so on with locally generated organic inputs that are less expensive and offer good returns on investment.

• It generates income through export as the demand for organically grown crops is on the rise.

• It provides nutritious food since organically cultivated food has more nutrients than food produced through chemical farming.

• It has the potential to create more jobs in India because it requires more laborer's to grow organic crops than chemically generated commodities.

• Organic food is pesticide free and is produced in an environmentally sustainable way, thus positively contributing towards the society.

 Disadvantages of Organic Farming

• Lack of awareness: Farmers are unaware and uneducated, hence they aren’t aware much of this concept. Though, through raising farmer awareness and willingness to adopt new methods, this situation could be improved.

• Lack of infrastructure: There is no sufficient infrastructure or marketing facilities available to support the growth of organic crops. Organic farming should be supported by an adequate agriculture policy.

• Production costs: High production costs for growing organic crops, as well as no subsidies in this sector also acts as a hindrance for the development of this sector.

5 Important Topics of Class 11 Economics Chapter 5 Rural development

Importance of Economics Chapter 5 Class 11 Rural development Notes

• Revision notes help students understand the key aspects of improving life in rural areas.

• They save time by focusing on essential information and skipping unnecessary details.

• These notes simplify complex topics, making them easier to understand and use.

• It covers essential topics like rural credit, marketing, and agricultural diversification.

• They increase confidence by clearly understanding what to expect in exams.

• Explains the importance of sustainable development in rural communities.

Tips for Learning the Class 11 Economics Chapter 5 Rural Development Notes

• Focus on understanding the basic concepts like rural credit, marketing, and agricultural diversification.

• Connect the topics to real-life examples of rural development in your country or community.

• Compare real-life case studies or news articles about rural development initiatives to better understand the practical application of concepts.

• Learn how rural credit works, its importance, and the different sources of credit available to farmers.

• Understand the concept of agricultural diversification and why it is essential for rural development.

Conclusion:

The revision notes for Class 11 Economics Chapter 5 "Rural Development" by Vedantu provide a clear and concise understanding of the essential aspects of improving rural areas. These notes cover important topics like rural credit, agricultural diversification, and the role of cooperatives, making it easier for students to grasp these concepts. With these notes, students can prepare effectively for their exams and gain a deeper insight into how rural development is crucial for the overall progress of the country.

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