Rural development
Lingering problems Emerging problems
Credit > sustainable livelihood
Marketing > organic farming
Credit challenges:
1. Most farmers are small landholders and could harvest only for once subsistence not
commercial sale
2. The gap between sowing to harvesting is long in between it money is required
Types of credit:
1. Short term – 1 year – raw material, seeds, pesticides
2. Medium term – 1 to 5 years – machine, fences, digging wells
3. Long term – 5 to 20 years – land renewing, buying new land
Sources of credit:
Non- Institutional Institutional
< money lenders, relatives, family < govt and commercial banks, cooperatives
< 93% in the starting 1st 5 year plan < 7% in the starting 1st 5 year plan now 63%
Institutional agencies:
Cooperative credit society- provides credit at a reasonable interest – 16 to 17% of
total loan supplied
1. Eliminet money lenders
2. Rapid and timely flow
3. Spread credit facilities all around
State bank and other commercial banks : 1955
- All the credit needs could not be met by
cooperatives alone
Regional banks and land development banks – work on district level
- Major purpose is to grant loans to
weaker sections eg Punjab gramin bank
etc
NABARD- apex handling policy, planning, operating in field of rural credit and related
activities. Functions: - Fund and give credit
- Improve credit system
- Coordinate the financial credit of all the
institutions
- Keep liaison with govt
- Monitor the projects funded
Problems faced by rural banks:
1. Insufficiency – demand>supply
Inadequate coverage
2. Low attention to poor farmers
3. Inadequate amount received – spent on unproductive work
4. Growing overdues
Agricultural marketing
is a process which involves assembling, storage, processing, transportation, packaging, grading and
distribution of different agricultural commodities across the country.
GPGPSS
Gather
Process
Grading
Pack
Store sell
Problems with agricultural marketing:
1. Lack of transportation
2. Lack of storage
3. Lack of credit and market knowledge
4. Forced sales
5. Middlemen
Govt measures to improve:
1. Cooperative markets - fair price
2. Warehouse facilities – storage
3. Subsidized transport- railways offer it so produce could be bought to urban center
4. Spread info through media – so farmers can decide what to sell
5. Msp policy – govt will buy there produce
6. Regulated markets –
Agricultural diversification
Market risk decreases
Stabilization
1. crop production - single cropping system to multiple cropping system.
2. Productive Activities - animal husbandry, horticulture
