Rural Development : is a comprehensive term but it essentially means a plan of action for the development of areas which are lagging behind in the socio-economic development Key Issues of Rural Development: Development of human resources which includes: a) Literary- more specifically female literacy, education and skill Development. b) Health- addressing both sanitation and public health. c) Land reforms. d) Development of the productive resources of each locality. e) Infrastructural Development. Like electricity, irrigation, credit marketing, transport facilities including construction of village roads, feeder roads, facilities for agricultural research, extension and information dissemination. f) Special measures for alleviation of poverty and bringing about significant improvement in the living conditions of the weaker sections of the population, emphasizing access to productive employment opportunities. • Importance of Rural credit: Growth of rural economy depends primarily on infusion of capital from time to time to realize higher productivity in agriculture and non-agriculture sector. Farmers borrow from various sources to meet their initial investment on seeds, fertilizers etc. • At the time of Independence moneylenders and traders exploited small and marginal farmers and landless farmers by lending them on high interest rates and by manipulating the accounts to keep them in debt trap. • A major change occurred after 1969 when India adopted social banking and multi agency approach to adequately meet the needs of rural credit. • Micro-credit programme - Self Help Group emerged to fill the gap of formal credit. SHG promotes thrifts in small proportions by minimum contribution from each member. From the pooled money credit is given to the needy at reasonable rate of interest. Such credit provision are generally termed as Micro credit programme. Role of Micro- Credit- has helped empowered women but the borrowings are confined to consumption purpose and negligible proportion is borrowed for agricultural purposes. • Critical appraisal of Rural Banking-

processing. • Banks need to change their approach from just being lenders to building up relationship banking with borrowers. rural political elites. and distribution of different agricultural commodities across the country. transportation. • Obstacles of agricultural marketing: Private traders (moneylenders. iii) Cooperative marketing: in realizing fair prices for farmers’ products Iv) Policy instruments: a) Assurance of minimum support prices (MSP)for 24 agricultural products. Farmers need to be taught to inculcate habit of thrift and efficient utilization of resources. . • With the exception of Commercial banks other formal institutions have failed and effective to develop a culture of deposit mobilization lending to worthwhile borrowers and effective loan recovery. 50% of the defaulters are ‘Willful defaulters’ which is a threat to banking system. cold storage and processing units. • Measures: i) Regulation of markets: to create orderly and transparent marketing conditions which will benefit not only the farmers but also the consumers ii) Provision of physical Infrastructure facilities: like roads. packaging. C) Distribution of Food-grains and sugar through Public Distribution System. • Agricultural marketing System: is a process that involves the assembling. storage. railways. These instruments are aimed at protecting the income of the farmers and providing food-grains at a subsidized rate to the poor.• It has helped farmers to avail services and credit facilities and a variety of loans for meeting their productive needs. go-downs. • Prior to Independence farmers suffered faulty weighing and manipulation of accounts. warehouses. b) Maintenance of buffer stocks of wheat and rice by Food Corporation of India. grading. They were forced to sell at low prices and no proper storage facilities. That is why the State intervention became necessity to regulate the activities of the private traders. Our banking system suffers from chronic under performance of formal credit institutions and high incidence of overdue installments on the farmers. big merchants and rich farmers) predominates agricultural market.

fruits etc) by providing seeds and assured procurement of products at pre-decided prices. agencies and consumer cooperatives constitutes only 10% while the rest is handled by the private sectors. . Rajasthan) • b) Hadarpur Mandi (Pune) • c) Rythu Bazars (vegetable and fruit markets in Andhra Pradesh) • d)Uzhavar Sandies (farmers market in Tamil Nadu) • e) Several national and multinational fast food chains are entering into contract/ alliance with farmers to encourage and cultivate farm products (vegetable. Alternative channels available for agricultural markets: • a) Apni Mandi (Punjab.• The quantity of agricultural products handled by the govt. Haryana. • Lack of awareness and training for farmers to improve their marketing abilities.