Chapter – 6 (Rural Development)

1.What are the two types of purposes for which Indian farmers require credit?
Ans: Productive Purpose: and Non-productive Purposes.
2. What are the two main categories of agriculture fiancé in India?
Ans: Non-institutional sources: and Institutional.
3. Who occupies the prime place in non-institutional agriculture finance in India?
Ans: Moneylender.
4. Name the main sources of institutional agriculture finance in India?
Ans: Co-operative Credit Societies; Commercial Banks; Regional Rural Banks.
5. Give two main weaknesses of institutional agriculture finance in India?
Ans: (i) Inadequate and taken away by the rich farmers.
(ii)High level of overdues and defaults.
6. Mention two important government measures undertaken to improve the
agriculture marketing.
Ans: (i)Organization of regulated markets.
(ii)Co-operative marketing.
7. What is organic farming?
Ans: When farming is done with the use of organic manure, bio- fertilizers and organic
pesticides, it is called organic farming.
8. What do you mean by agriculture marketing?
Ans: Agricultural marketing is a process that involves the assembling, storage, processing,
transportation, packaging, grading and distribution of different agricultural commodities
across the country.
9. What do you mean by rural development?
Ans: Rural development implies both the economic betterment of the people as well as greater
social transformation in the rural sector. Rural Development is a continuous and
comprehensive socio-economic process, attempting to improve all aspects of rural life.
10. Why is agricultural diversification essential for sustainable livelihoods?
Ans: Agricultural diversification is essential for rural people to generate supplementary
gainful employment and realizing higher levels of income.
11. What is cooperative marketing?
Ans: Co-operative marketing is a measure to ensure a fair price to farmers. Cooperative
marketing refers a system in which marketing societies are formed by farmers to sell the output
collectively and to take advantage of collective bargaining.
12. What are the two aspects of diversification of activities?
Ans: Diversification includes two aspects: (i) Diversification of Crop Production; (ii)
Diversification of Productive Activities (shift of workforce from agriculture to other allied
activities and non-agriculture sector.

13. Classify rural credit on the basis of time.

Ans: On the basis of time, rural credit can be classified as : Short-term credit, Medium-term
credit and long-term credit.

14. Which is the apex institution in rural financing?

Ans: National Bank of Agriculture and Rural Development (NABARD), established in 1982.
15. What is distress sale?
Ans: It refers to a sale in which farmers are forced to sell their surplus produce to the
moneylenders or traders at lower prices.
16. What is Micro finance?
Ans: Micro finance is a scheme extended to the poor through Self-Help Groups (SGHs).
17. Why have self – Help Groups (SGHs) been set up?
Ans: The Self-Help Groups (SGHs) have been set up to promote thrift in small proportions by
a minimum contribution from each member. From the pooled money, credit is given to the
needy members to be repayable in small instalments at reasonable interest rates.
18. What do you mean by ‘Operation Flood’?
Ans: Operation Flood is a system, whereby all the farmers can pool their milk produce
according to different grading and the same is processed and marketed to urban centres
through cooperatives.
19. Give any one limitation of organic farming.
Ans: Yields from organic farming are less than modern farming
20. Why is Minimum Support Price (MSP) fixed by the government?
Ans: Minimum Support Price (MSP) is fixed by the government to safeguard the interest of
farmers.
21. Why do people seek employment in non-farm sectors?
Ans: People seek employment in non-farm sectors as agriculture is already over-crowded and
cannot offer additional employment.
22. What is the share of total fish production in the total GDP in the year 2005-06?
Ans: 0.8 per cent
23. State one advantage of organic farming.
Ans: Organic farming required cheaper agriculture inputs.
24. Why the period of 1991-2003 is known as period of Golden Revolution?
Ans: The period of 1991-2003 is known as Golden Revolution because during this period, the
planned investment in horticulture became highly productive and the sector emerges as a
sustainable livelihood option. 25
25. What is the main function of co-operative marketing societies?
Ans: The main function is to improve agriculture marketing.
26. What is TANWA?
Ans: Tamil Nadu Women in Agriculture (TANWA) is a project initiated in Tamil Nadu where
rural women find employment in non-farm jobs, as well as they are trained in latest
agricultural techniques.
27. What is the problem and solution with fisheries?
Ans: Problems related to fisheries such as overfishing and pollution need to be regulated and
controlled. The solution is:
a) Welfare programmes for the fishing community have to be reoriented in a manner which
can matter which can provide long term gains and sustenance of livelihoods.
b) Pollution of water bodies needs to be controlled.
28. Give three functions of NABARD.
Ans: The main functions of NABARD are:
1. To provide short, medium and long-term credits to State Co-operative Banks, RRBs, Land
Development, Banks and Other financial institution, approved by the RBI.
2. To grant long-term loans to the State Government for subscribing to the share capital of co-
operative societies.
3. To give loans to the approved institutions to invest in securities or to contribute to share
capital of institution engaged in agricultural and rural development.
29. What is the problem and solution with livestock?
Ans: The livestock faces low productivity as compared to other countries.
The solution is:
(a) Promotion of good breeds of animals to raise productivity.
(b) Improved veterinary care is essential.
30. Give weaknesses of RRBs.
Ans: Weaknesses of RRBs are:
1. Regional Disparities in Growth
2. Continuous Losses
3. Problem of Growing Overdues
4. Various Shortcomings in Dealings
5. Methods of Operation.

31. Name the key issues relating to rural development.

Ans: Key Issues in Rural Development:
1. Literacy
2. Health
3. Land Reforms
4. Infrastructure Development
5. Poverty Alleviation.

32. Name the states which are major products of marine products?
Ans: Among states, Kerala, Gujarat, Maharashtra and Tamil Nadu are the major producers of
marine products.
33. What do you mean by agricultural credit?
Ans: Agricultural credit means credit for the farming families.
34. Which states has an efficient implementation of milk co-operatives?
Ans: Gujarat state has the success story in the efficient implementation of milk co-operatives