Rural Development—Key Issues: NBSE Class 12 Economics notes

Here, you will find summaries, questions, answers, textbook solutions, pdf, extras etc. of (Nagaland Board) NBSE Class 12 (Arts/Commerce) Economics Chapter 10: Government Budget. These solutions, however, should be only treated as references and can be modified/changed.

Introduction

Rural development is critical for India, where the majority of the population still resides in villages. Agriculture continues to be the mainstay of the rural economy, providing livelihoods for 60% of the workforce. However, incomes remain low as agriculture accounts for only around 20% of GDP. Raising agricultural productivity is thus essential.

The government has taken several steps to develop rural areas. Rural infrastructure like roads, electricity, warehouses has improved, helping connect villages and reduce wastage of produce. Institutional credit has expanded significantly through cooperatives, regional rural banks and microfinance, reducing dependence on informal sources. Regulated agricultural markets have benefited farmers by standardizing weights and prices. Minimum support prices provide income assurance.

Diversification into non-farm sectors is also crucial for rural development and to absorb the growing rural labor force. Animal husbandry, fisheries and horticulture have shown good growth. New opportunities are emerging in food processing, handicrafts and tourism.

There are still many challenges. Small and marginal farmers dominate and need access to technology, credit and markets. Rural health and education remain inadequate. Growth is still uneven across states. Promoting decentralized, cluster-based development can balance urban-rural disparities.

Sustainable approaches like organic farming are gaining ground. A second green revolution driven by research, new technology, infrastructure and diversification can usher in rural prosperity. The rural sector has developed but remains the key to India’s growth and equity. Holistic rural development calls for an integrated strategy encompassing agriculture, industry, services and human development.

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Textual questions and answers

A. Very short-answer questions (answer in one word/one sentence)

1. What is meant by rural development?

Answer: Rural development is the provision of health care, education, housing and other related social services to those engaged primarily in agricultural activities so that such people are at par with those in the cities.

2. What is agricultural marketing?

Answer: Agricultural marketing refers to the process of buying and selling agricultural products.

3. What are the different aspects of diversification?

Answer: Diversification is the spread of investment into a new range of products as new crops and also as shifting of work in other sectors.

4. Name the apex institution for rural credit in India.

Answer: The apex institution for rural credit in India is NABARD (National Bank for Agricultural and Rural Development).

5. What is micro-finance?

Answer: Micro-finance refers to the provision of financial services, such as small loans, savings accounts, and insurance, to low-income individuals or groups who typically lack access to traditional banking services.

6. What is market surplus?

Answer: Market surplus refers to the excess of production over consumption in the agricultural sector. It is the quantity of agricultural products that is available for sale in the market after meeting the demand for consumption.

7. Define ‘organic farming’.

Answer: Organic farming refers to a method of agricultural production that does not involve the use of synthetic chemicals such as pesticides and fertilizers.

8. Give the problems associated with horticulture.

Answer: Horticulture faces several challenges, including the perishable nature of horticultural products, which require efficient post-harvest management and storage facilities. Other issues include the lack of proper market linkages, inadequate infrastructure, and limited access to credit and technology for small-scale horticulturists.

9. What is the need for a second green revolution?

Answer: A second productivity revolution in Indian agriculture, coupled with diversification to commercial crops, agro-business, processing industries, agro-exports and massive efforts towards afforestation and wasteland development will generate abundant farm and non-farm employment opportunities for the rural workforce. These, in turn, will stimulate demand for consumer goods and services, uplifting the urban economy and the informal sector as well as causing a rapid expansion of the service sector.

10. Why does India need to focus on development of its rural areas?

Answer: India needs to focus on the development of its rural areas as a significant portion of the population resides in rural areas, and their development is crucial for overall economic growth and poverty reduction. Also, rural areas are the primary source of agricultural production, and their development can contribute to increased agricultural productivity and food security. Lastly, rural development can help bridge the urban-rural divide and promote inclusive growth in the country.

B. Short-answer questions-I (answer in 30-50 words)

1. Why is it important to have agricultural diversification?

Answer: Agricultural diversification is important because it helps reduce the risks associated with relying on a single crop or product. It allows farmers to explore new markets and adapt to changing consumer demands. Additionally, diversification can lead to increased income and improved livelihoods for farmers.

2. Which sector is the most important one in rural areas?

Answer: The most important sector in rural areas is agriculture. It is the primary source of livelihood for a majority of the rural population and contributes significantly to the rural economy.

3. Which sector has the highest employment of labour in India?

Answer: The sector with the highest employment of labour in India is also agriculture. It employs a large number of people, especially in rural areas, where agriculture is the main occupation.

4. How does agriculture contribute to national income?

Answer: Agriculture contributes to national income in several ways. It generates income through the sale of agricultural products, provides employment opportunities, and contributes to the overall economic growth of the country. Additionally, agriculture also contributes to foreign exchange earnings through exports of agricultural products.

5. Give any two ways by which agriculture can promote rural development. 

Answer: Ways in which agriculture can promote rural development are:

• Employment Generation: Agriculture provides employment opportunities to a large number of people in rural areas.
• Income Generation: Agriculture contributes to the income of rural households through the sale of agricultural produce.

6. What is a ‘commune’?

Answer: A ‘commune’ is defined as a form of land ownership where a large group of people share community ownership.

7. In which year were the commercial banks nationalised?

Answer: Commercial banks were nationalised in the year 1969.

8. Give any two agencies providing credit in rural areas. 

Answer: The two agencies providing credit in rural areas are:

Cooperative Credit Societies: These credit societies account for about 17-19 per-cent of rural credit flow and ensure the timely and rapid flow of credits to the farmer. The main focus of these credit societies is to eliminate moneylenders from the profiles of credit agencies and spread credit facilities across all regions of the country.

Land Development Banks and Regional Rural Banks: Land Development Banks and Regional Rural Banks were established to promote credit supplies, especially in rural and backward areas. These banks are under obligations to focus on the credit needs of weaker farmers/sections of the rural population.

9. What is a ‘regulated market’?

Answer: A ‘regulated market’ is a marketplace that ensures standardized weights, prices, and other facilities to prevent hardships or cheating for both buyers and sellers.

10. Give the need for a Minimum Support Price.

Answer: Minimum Support Price (MSP) is a price below which the market price cannot fall because the government guarantees to purchase the goods at this price. This ensures that farmers get a minimum return for their crop, and market forces, i.e., demand and supply, do not deprive them of a good return.

11. Give the full form of PDS.

Answer: The full form of PDS is Public Distribution System.

12. What is diversification?

Answer: Diversification is the spread of investment into new range of products as new crops and also as shifting of work in other sectors.

13. What is organic farming?

Answer: Organic farming is a method of agriculture that avoids the use of synthetic chemicals. It adopts a holistic approach aimed at benefiting every aspect of nature and life that interacts with agricultural practices. This includes considerations for the environment, agricultural traditions, seed bio-diversity, animal welfare, rural communities, self-reliance, energy efficiency, soil and water conservation, and human health.

14. Give two products from horticulture.

Answer: Common examples of horticultural products include fruits like apples and vegetables like tomatoes.

C. Short-answer questions-II (answer in 60-80 words)

1. How can agriculture contribute to capital formation?

Answer: The greater the capital formation of a country, the faster its development will be. Agriculture has to contribute its share of surplus for economic development. Recently, there was a lot of debate in India on taxing agricultural incomes and reducing government spending and subsidies to this sector in order to reduce government expenditure and generate a surplus for capital formation from this sector. 

2. Is income low in the agricultural sector in India? Explain.

Answer: Although agriculture’s contribution to national income has declined to nearly 23 percent of the GDP, it continues to provide a livelihood to almost 60 percent of the workforce. The Tenth Five-Year Plan had envisaged a 4 percent per annum growth in this sector, but only 2.3 percent per annum was actualized. This implies that a large number of workers earning low incomes are trapped in rural areas, particularly in agriculture. The productivity of rural workers is low, resulting in low incomes, and this proves to be a drag on national development. Additionally, it mentions that 60 percent of the population provides only 23 percent of the GDP, leading to the conclusion that incomes are low in rural areas.

3. List six ways by which agriculture is important to India.

Answer: The six ways in which agriculture is important to India are:

• Major share in national income: Though its share in GDP has fallen from 56 percent in 1950 to 14.5 percent in 2009-10 (GDP at constant prices). However, according to economic survey 2011-12 it is still high. In the UK and in the USA, it is only 2 percent and 4 percent, respectively, of the GDP. 
• Largest share in employment: Nearly 60 percent of the workforce is still employed in agriculture and allied activities in rural areas. In Japan and France, this percentage is only 4, while in the UK and the USA, only 2 percent of the economically active population is engaged in agriculture. Combining 1 and 2, we can conclude that incomes are low in rural areas. This is because 60 percent of the population provides only 23 percent of the GDP. 
• Provision of food surplus for the expanding population: In an economy where the population is expanding rapidly, demand for food increases at a fast pace. Agriculture has to keep up with this rising demand for food to make the country ‘hunger free’. 
• Contribution to capital formation: The greater the capital formation of a country, the faster its development will be. Agriculture has to contribute its share of surplus for economic development. 
• Providing raw materials to industry: Sugar, jute, cotton, vegetable oil, and food processing are examples of some industries dependent on agriculture for their raw materials. These industries do progress with the development of agriculture. 
• Market for industrial products: More than two-thirds of the population resides in rural areas, and that is why an increase in purchasing power stimulates industrial production. If steps are taken to expand agricultural productivity, then the income of the vast rural sector will increase, thereby boosting industrial output with increased demand resulting from higher incomes.

4. Briefly explain how agriculture can be an important source of foreign exchange earnings.

Answer: Agriculture can be an important source of foreign exchange earnings for a country. Here are some ways in which agriculture contributes to foreign exchange earnings:

• Export of Agricultural Products: Agricultural output, such as food grains, fruits, vegetables, and processed food products, can be exported to other countries. India, for example, exports a significant amount of agricultural products, which accounts for a large proportion of its exports.
• Raw Material for Industries: Agriculture provides raw materials to various industries, such as sugar, jute, cotton, vegetable oil, and food processing. These industries rely on agricultural products as inputs for their production processes. The growth and development of agriculture can lead to increased production and export of these raw materials, thereby contributing to foreign exchange earnings.
• Diversification and Value Addition: By diversifying agricultural production and focusing on high-value crops, countries can increase their export earnings. This involves shifting from traditional crops to commercial crops and investing in agro-business and processing industries. 
• Promoting Agricultural Exports: Governments can take measures to promote agricultural exports, such as providing incentives, improving infrastructure, and facilitating trade agreements with other countries.

5. How can you say that rural areas have developed in India?

Answer: Since independence, rural areas have progressed, but not as much as they could have. 

• Per capita edible oil consumption rose by 48.3 percent in rural areas and by only 22.48 percent in urban areas. 
• The proportion of rural households using cooking gas rose manifold from 15 percent to 81.7 percent, while urban population doubled in 2016.
• Per capita monthly consumption in rural India grew by 19 percent from during the 2009-2010 to 2015-2017.
• Electricity use by households increased from 54 to 69 percent in rural areas, while the urban proportion rose to 94 percent from 85 percent. 
• Purchases of readymade garments rose by 83 percent, as did purchases of hosiery products thereof, both in rural and urban areas.
• Refrigerator use increased from 4 to 15 percent in rural households and from 12 to 32 percent in urban households, and this number has increased to 95% in urban areas.
• The proportion of TV households rose from 19 to 26 percent in rural areas and from 59 to 94 percent in urban areas.

6. What is the importance of credit in rural areas?

Answer: Credit is crucial in rural areas for the following reasons:

• To meet their consumption needs every year till harvest time and to purchase seeds, fertilisers, pesticides, etc. Small and marginal farmers have to manage short term credits, which stretch over a period of 6 to 12 months.
• To purchase machinery, construct wells, or meet social obligations, farmers take medium term credits, which generally stretch over a period of 12 months to 5 years.
• Farmers also take long-term credit for the purchase of additional land or for other productive purposes. The long-term credit stretches over a period of 5 to 20 years.

7. Describe two recent developments in the provision of rural credit in India.

Answer: Two recent developments in the provision of rural credit in India are:

• Increase in Rural Credit: Rural credit from all three sources—cooperatives, regional rural banks (RRBs), and commercial banks—has increased tremendously since 2003-04.
• Focus on Local Needs and Awareness: There is an emphasis on making rural credit more suitable to local needs. Additionally, there is a need to create awareness amongst the rural populace of the existence of various credit options.

8. Why is it important to have regulated markets for cultivators?

Answer: Regulated markets play a crucial role in the agricultural sector by providing a platform for cultivators to sell their produce in a fair and transparent manner. These markets ensure that farmers receive a minimum support price for their crops, which helps protect them from exploitation by middlemen and ensures a stable income for their hard work.

By establishing regulated markets, the government can regulate the buying and selling of agricultural commodities, ensuring that cultivators get a fair price for their produce. This helps in reducing the income disparities between farmers and traders, promoting equity in the agricultural sector.

Regulated markets also provide a conducive environment for farmers to sell their produce without any fear of price fluctuations or market uncertainties. They offer facilities like storage, grading, and quality testing, which help maintain the quality of agricultural commodities and increase their market value.

Moreover, regulated markets promote competition among buyers, leading to better prices for farmers. They also provide a platform for farmers to access credit facilities, insurance schemes, and other support services, which are essential for their overall development and financial stability.

9. Why does a farmer need risk management and insurance?

Answer: Farmers need risk management and insurance for the following reasons:

• Larger Risks with New Technologies: As farmers adopt new and untried technology and increase input intensities, they also face larger risks. These arise due to lack of knowledge of the specific requirements of new seeds and other new technology for achieving productivity gains.
• Protection Against Downside Risks: All farmers do not have the ability to bear downside risks, and this is evident from the spate of farmer suicides when new seeds fail to deliver expected output, or expenditure on bore wells proves fruitless, or when market prices collapse unexpectedly.
• Limited Coverage by Crop Insurance: Only 4 percent of farmers are currently covered by any crop insurance. Crop insurance is only against yield loss and does not cover price risk in India. Farmers also lack cover against other risks, for example, accidents, which can also prove crippling.

10. Write a short note on ‘horticulture in India’.

Answer: Horticulture has emerged as a growing profession in rural India. It is considered a matter of pride for the country. India benefits from its diverse climate, which allows for the cultivation of a wide variety of fruits, vegetables, and flowers. In fact, India is the largest producer of cauliflower in the world and the second-largest producer of fruits and vegetables.

The National Horticulture Mission (NHM) aims to double the output of horticulture products by 2012. However, since horticulture products are perishable, efficient linkages need to be established between farms and final buyers. This requires the implementation of modern methods such as grading, post-harvest management, and cold storage.

D. Long-answer questions-I (answer in 90-120 words)

1. Give any four reasons to prove that agriculture plays a major role in the Indian economy.

Answer: Four reasons to prove that agriculture plays a major role in the Indian economy:

• Major Share in National Income: Agriculture is important for the following role it plays in India. Major share in national income: Though its share in GDP has fallen from 56 percent in 1950 to 14.5 percent in 2009-10 (GDP at constant prices). However, according to the 2011–12 economic survey is still high.
• Largest Share in Employment: Largest share in employment: Nearly 60 percent of the workforce is still employed in the agricultural sector.
• Market for Industrial Products: More than two-thirds of the population resides in rural areas, and that is why an increase in purchasing power stimulates industrial production. If steps are taken to expand agricultural productivity, then the income of the vast rural sector will increase, thereby boosting industrial output with increased demand resulting from higher incomes.
• Importance in International Trade: Agricultural output accounts for a large proportion of India’s exports, even though its share has been falling with the development of industry and services sectors.

2. Has economic prosperity bypassed the villages? Give evidence in support of your answer.

Answer: Economic prosperity has not bypassed villages. Between 1993-94 and 2016-17: 

• Per capita edible oil consumption rose by 48.3 percent in rural areas and by only 22.48 percent in urban areas. 
• The proportion of rural households using cooking gas rose manifold from 15 percent to 81.7 percent, while urban population doubled in 2016. 
• Per capita monthly consumption in rural India grew by 19 percent from during the 2009-2010 to 2015-2017. 
• Electricity use by households increased from 54 to 69 percent in rural areas, while urban proportion rose to 94 percent from 85 percent. 
• Purchases of readymade garments rose by 83 percent, as did purchases of hosiery products thereof, both in rural and urban areas. 
• Refrigerator use increased from 4 to 15 percent in rural households and from 12 to 32 percent in urban households, and this number has increased to 95% in urban areas. 
• The proportion of TV households rose from 19 to 26 percent in rural areas and from 59 to 94 percent in urban areas.

3. Discuss any two measures implemented to develop the rural sector.

Answer: One measure implemented to develop the rural sector in India is the provision of infrastructural facilities such as roads, which is essential for social and economic well-being. The government has allocated resources to achieve all-weather road access to all villages with a population above 1,000 by 2003, and for villages with a population between 500 and 1,000 by 2007. 

Another measure implemented to develop the rural sector is the strengthening of rural infrastructure relating to education, health care, transport, telecom, power, and water. Simultaneous efforts are needed to promote a geographically more dispersed and equitable development paradigm, or else widening disparities between rural and urban centers will occur. The government has taken steps to improve rural infrastructure, such as the provision of electricity, water supply, and sanitation facilities.

4. How has rural credit expanded to benefit the farmers in India?

Answer: Rural credit has expanded to benefit farmers in India in several ways. Cooperative societies are playing a significant role in providing credit to farmers, which is the most needed thing in farming. Apart from this, cooperatives help farmers by providing top-quality fertilizers, seeds, insecticides, pesticides, etc. at reasonable prices. Farmers also get marketing, warehousing facility, and transport support from the cooperatives. 

Rural people need credit for farming and for fulfilling their daily necessities, and most of the farming families in India are small and marginal and are not capable of generating surplus for further investment. 

Credit needs of the typical Indian farmer are broadly classified into three categories, viz: 

• To meet their consumption needs every year till harvest time and to purchase inputs like seeds, fertilizers, pesticides, etc. Small and marginal farmers have to manage short-term credits which stretch over a period of 6 to 12 months.
• To purchase machinery or constructing wells or to meet social obligations, farmers take medium-term credits which generally stretch over a period of 12 months to 5 years.
• Farmers also take long-term credit for the purchase of additional land or for some other productive purposes. The long-term credit stretches over a period of 5 to 20 years. 

The government has taken several measures to improve rural credit facilities in India, such as the establishment of Regional Rural Banks (RRBs), the National Bank for Agriculture and Rural Development (NABARD), and the Kisan Credit Card scheme. These measures have helped to expand rural credit facilities and benefit farmers in India.

5. Outline the performance of animal husbandry and fisheries in India.

Answer: Animal husbandry and fisheries have performed well in India and are a significant contributor to the country’s economy. According to , animal husbandry and fishery provide for about 30% of the value of the output of Agriculture and Allied Sector and provide full-time and part-time employment to 5.5% of the total working population, the majority of whom are women. 

India continues to be the largest producer of milk in the world, with a total production of 91 million tonnes in 2005-06 . However, the per capita availability of milk at 231 gm per day during 2003-04 is still very low compared to nutritional requirements, suggesting scope for further expansion . Milk, eggs, meat, egg powder, and live poultry are some of the products that are even exported to countries such as Japan, Denmark, Poland, and the USA . 

The fisheries sector has also performed well, but vast potential exists, particularly in inland fishery . The setting up of the National Fisheries Board should bring better technical focus . The government has taken several measures to promote the fisheries sector, such as the establishment of the National Fisheries Development Board (NFDB) and the introduction of the Blue Revolution scheme . The Blue Revolution scheme aims to increase fish production and productivity by adopting the latest technology and best practices in the sector . 

E. Long-answer questions-II (answer in 130-200 words)

1. Discuss the importance of the development of rural sector in India.

Answer: The development of the rural sector is significant for several reasons. According to , the rural sector, largely represented by agriculture, needs to be considered as a leading element of national development. Without the concomitant development of agriculture, industries would be restricted, and internal imbalances in the economy would result in deepening the problems of poverty, inequality, and unemployment. 

Rural development is to be seen as a broad spectrum of rural improvement initiatives in education, health and nutrition, housing, and a variety of related social services that lead to better levels of living for the rural people engaged primarily in agriculture. The development of the rural sector is essential for reducing regional disparities and promoting balanced regional development. The rural sector is often neglected in favor of urban areas, and the development of the rural sector can help to reduce the gap between rural and urban areas and promote balanced regional development. 

The development of the rural sector is also crucial for achieving food security in India. The rural sector is the primary source of food production in India, and the development of this sector is essential for ensuring adequate food supply for the country’s growing population. 

The development of the rural sector is also essential for generating employment opportunities in rural areas. The majority of India’s population lives in rural areas, and the development of the rural sector can help to create employment opportunities and reduce poverty in these areas. 

2. How has the marketing system changed for the better in rural areas? Explain some outstanding improvements that have emerged in this sector.

Answer: The marketing system in rural areas has undergone significant changes in recent years, leading to some outstanding improvements in this sector. One of the most notable changes is the establishment of regulated markets, which has put an end to the exploitation of farmers and ensured a reasonable price for their products. This has helped to create a more transparent and efficient marketing system, benefiting both farmers and consumers.

Another significant improvement is the enhancement of infrastructural facilities in rural areas, including the provision of roads for connectivity. Families residing alongside roads benefit from better health facilities, greater educational opportunities, and higher ownership of assets compared to those living in unconnected remote villages. This has helped to bridge the gap between rural and urban areas, making it easier for farmers to transport their products to markets and access essential services.

Moreover, the role of cooperative societies in promoting rural development cannot be overstated. Cooperatives such as Krishak Bharathi Cooperative Ltd. (KRIBHCO) and the Kaira District Cooperative Milk Producers Union Ltd. that markets its products under the brand name Amul provide support to farmers in improving their livelihood. These cooperatives have helped to create a more sustainable and equitable marketing system, empowering farmers and promoting rural diversification.

3. ‘Organic farming is a holistic way of life’. Do you think so? Give arguments in support of and against this statement.

Answer: Arguments in support of the statement:

• Organic farming is not just about producing food without chemicals, but it also involves a way of life that promotes environmental sustainability, animal welfare, and community development.
• Organic farming practices focus on maintaining soil health, conserving water, and preserving biodiversity, which are all essential components of a healthy ecosystem.
• Organic farming encourages the use of renewable resources, such as compost and natural fertilizers, which reduce the dependence on non-renewable resources and promote sustainable agriculture.
• Organic farming promotes the use of traditional and indigenous knowledge, which helps to preserve cultural heritage and promote local food systems.

Arguments against the statement:

• Organic farming may not be feasible for all farmers, especially those who lack the resources and knowledge to implement organic practices.
• Organic farming may not always be more productive than conventional farming, which could lead to food shortages and higher prices for consumers.
• Organic farming may not be able to meet the growing demand for food in a world with a rapidly increasing population.
• Organic farming may not be able to compete with conventional farming in terms of cost and efficiency, which could limit its adoption by farmers and consumers.

4. What do you mean by rural development? Bring out the key issues in rural development.

Answer: Rural development refers to a broad spectrum of initiatives aimed at improving the living standards of people living in rural areas. It involves the development of agriculture, infrastructure, education, health, and other related social services that lead to better levels of living for rural people engaged primarily in agriculture. Rural development also aims to decrease inequalities in the distribution of rural incomes and in urban-rural imbalances in incomes and economic opportunities, and enhance the capacity of the rural sector to sustain and accelerate the pace of these improvements over time.

Some of the key issues in rural development include:

• Rural credit: Access to credit is essential for farmers to invest in their farms and improve their livelihoods. However, many farmers in rural areas lack access to formal credit, which limits their ability to invest in their farms and improve their productivity.
• Rural marketing: Efficient marketing with a dynamic supply chain is instrumental for the development of the agricultural sector. The government has established regulated markets to end the exploitation of farmers and ensure a reasonable price for their products.
• Use of new technology for diversification: The use of new technology can help farmers to diversify their crops and increase their productivity. However, many farmers lack access to new technology and the knowledge to use it effectively.
• Organic farming: Organic farming has gained popularity in recent years as a more sustainable and environmentally friendly alternative to conventional farming. However, organic farming may not be feasible or practical for all farmers, and it may face challenges in meeting the growing demand for food.
• Infrastructure development: Rural areas often lack basic infrastructure such as roads, electricity, and water supply, which limits their ability to access essential services and markets. The government has invested in infrastructure development to bridge the gap between rural and urban areas and promote rural development.

5. Explain the steps taken by the government in developing rural markets.

Answer: The government has taken several steps to develop rural markets and promote agricultural and rural development. Some of these steps are:

• Establishment of regulated markets: The government has established regulated markets to end the exploitation of farmers and ensure a reasonable price for their products. These markets are monitored by a market committee that includes representatives of the government, farmers, and traders.
• Provision of warehouses: The government has built warehouses for farmers to avoid the wastage and distress sale of agricultural produce. Central and state warehousing corporations are the principal government agencies offering storage space to farmers.
• Subsidized transport: The government has made provisions for subsidized transport through railways. Railways are offering subsidized transport facility to marginal farmers so that they can bring their agricultural produce when they get enough profits.
• Cooperative agricultural marketing societies: The government is taking initiatives to form cooperative agricultural marketing societies. Being a member of these societies, farmers find themselves better bargainers in the market, getting better prices for their agricultural produce through creative sale.
• Agricultural Produce Market Committee (APMC) Act: The APMC Act was enacted to regulate the marketing of agricultural produce and to provide a fair price to farmers. The act provides for the establishment of market committees to regulate the marketing of agricultural produce.
• National Agriculture Market (e-NAM): The government has launched the National Agriculture Market (e-NAM) to create a unified national market for agricultural commodities. The e-NAM platform provides a single window service for all APMC-related information and services.

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

Answer: The rural banking system plays a crucial role in the process of rural development in India. It provides financial services and support to the rural population, especially farmers and small-scale entrepreneurs.

• Access to Credit: Rural banks, such as cooperative credit societies, regional rural banks, and commercial banks, provide credit facilities to farmers and rural individuals. This enables them to invest in agricultural activities, purchase machinery, and meet their daily needs. Access to credit promotes agricultural productivity and economic growth in rural areas.
• Financial Inclusion: The rural banking system aims to bring financial services to the unbanked and underbanked rural population. By establishing branches and banking facilities in remote areas, it ensures that people have access to basic banking services like savings accounts, loans, and insurance. This promotes financial inclusion and empowers rural communities.
• Support for Rural Economy: Rural banks play a vital role in supporting the rural economy by providing financial assistance to various sectors. They offer loans for agricultural activities, livestock rearing, small businesses, and rural infrastructure development. This boosts employment opportunities, income generation, and overall economic development in rural areas.
• Risk Management: The rural banking system also helps farmers and rural individuals manage risks associated with agriculture and other economic activities. They provide insurance products and services that protect against crop failures, natural disasters, and other unforeseen events. This helps in stabilizing rural livelihoods and reducing vulnerability.
• Promotion of Savings: Rural banks encourage rural individuals to save their earnings by offering attractive savings schemes and incentives. This promotes a savings culture among the rural population and helps them build financial resilience. Savings mobilization also provides a source of funds for investment in rural development projects.

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

Answer: The alternative channels available for agricultural marketing are:

• Private Traders and Commission Agents: Private traders and commission agents continue to play a significant role in agricultural marketing. They provide a direct channel for farmers to sell their produce.
• E-Choupals: Farmers have access to e-choupals, which are digital platforms that provide information on prices and allow farmers to sell their produce online. This enables them to bypass traditional intermediaries and reach a wider market.
• Supermarket Retailers: Some farmers are now being approached by supermarket retailers, such as the Reliance group, who are interested in sourcing directly from farmers. This provides an alternative channel for farmers to sell their produce.
• Cooperative Agricultural Marketing Societies: The government is promoting the formation of cooperative agricultural marketing societies. These societies enable farmers to collectively market their produce and negotiate better prices in the market.
• Exports: Farmers can also explore the option of exporting their agricultural produce. This allows them to tap into international markets and potentially earn higher profits.

8. Explain four measures taken by the government to improve agricultural marketing.

Answer: Four measures taken by the government to improve agricultural marketing in India are:

• Minimum Support Price Policy (MSP): This policy assures farmers that their produce will be purchased by the government at a specified price, providing them with a minimum income from the sale of their agricultural produce.
• Provision of Warehouse: The government has built warehouses for farmers to avoid wastage and distress sale of agricultural produce. Central and State warehousing corporations offer storage space to farmers, helping them sell their produce at the right time and in the right condition.
• Regulated Markets: The government has established regulated markets where farmers can sell their produce at a monitored price. A market committee, including representatives of the government, farmers, and traders, ensures that farmers receive an appropriate price for their produce.
• Cooperative Agricultural Marketing Societies: The government is taking initiatives to form Cooperative Agricultural Marketing Societies. By being a member of these societies, farmers can become better bargainers in the market and get a better price for their agricultural produce through creative sale.

9. Explain the role of non-farm employment in promoting rural diversification.

Answer: Non-farm employment plays a crucial role in promoting rural diversification. In India, agriculture is the primary source of income for rural communities. However, it is often seasonal and subject to the vagaries of weather and market fluctuations. This makes rural communities vulnerable to poverty and uncertainty. Non-farm employment refers to alternative work such as agro-industry, livestock, fisheries, agro-processing industries, handicrafts, bamboo work, tailoring, papad-making, food preservation, and tourism. These industries provide supplementary sources of work and earning in rural India, which helps to overcome seasonal unemployment, poverty, and uncertainty in rural life.

By diversifying into different crops or taking up alternative work, rural communities can reduce their dependence on agriculture and create new income streams. This, in turn, can lead to a more sustainable and diversified rural economy. Non-farm employment also helps to promote rural-urban linkages by creating demand for goods and services produced in rural areas. This can lead to the development of new markets and value chains, which can benefit both rural and urban communities.

Moreover, non-farm employment can also help to promote gender equality and social inclusion by providing opportunities for women and marginalized groups to participate in the workforce. This can lead to greater empowerment and economic independence for these groups, which can have positive social and economic impacts on their families and communities.

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

Answer: Animal husbandry and fishery provide for about 30% of the value of the output of Agriculture and Allied Sector and provide full-time and part-time employment to 5.5% of the total working population, the majority of whom are women. It is a major source of occupation in arid and semi-arid regions. Milk, eggs, meat, egg powder, and live poultry are some of the products that are even exported to countries such as Japan, Denmark, Poland, and the USA. Uninterrupted supply of feed and preparedness for external Diversification is the spread of Investment Into new range of products as new crops and as shifting of work to other sectors.

Horticulture, on the other hand, has emerged as a growing profession in rural India. India produces maximum cauliflower in the world and is the second-largest producer of fruits and vegetables. The National Horticulture Mission (NHM) proposes to double this output by 2012. Horticulture products are perishable commodities, and therefore, very efficient linkages need to be put in place between farms and final buyers. This requires modern methods of grading, post-harvest management, cold storage, etc.

11. ‘Information technology plays a very significant role in achieving sustainable development and food security’. Comment.

Answer: Information technology (IT) has become a pivotal tool in the quest for sustainable development and food security. Here’s a commentary on the significant role IT plays in these areas:

• Data Collection and Analysis: IT enables the collection of vast amounts of data related to soil quality, weather patterns, and crop yields. This data can be analyzed to make informed decisions about planting, harvesting, and distribution of food resources.
• Precision Agriculture: Through the use of IT tools like drones, GPS, and sensors, farmers can monitor and manage their crops more efficiently. This allows for the precise application of water, fertilizers, and pesticides, reducing waste and ensuring optimal crop yields.
• Supply Chain Management: IT helps in tracking the movement of food products from the farm to the table. This ensures that food reaches consumers in a timely manner, reducing wastage due to spoilage.
• Resource Management: IT tools can monitor and manage water resources, ensuring that they are used efficiently. This is crucial in areas where water is scarce and needs to be used judiciously for agriculture.
• Education and Training: Through online platforms and mobile applications, farmers can access training materials and best practices. This helps them adopt sustainable farming practices and improve their yields.
• Market Access: IT platforms can connect farmers directly to consumers or retailers, eliminating middlemen. This ensures better prices for farmers and fresher produce for consumers.
• Early Warning Systems: IT can be used to develop systems that provide early warnings about pest infestations, diseases, or adverse weather conditions. This allows farmers to take preventive measures in time.
• Sustainable Practices Promotion: IT can be used to promote sustainable farming practices. For instance, apps can advise farmers on crop rotation, which can improve soil health and reduce the need for chemical fertilizers.

Additional/extra questions and answers

1. Why is agriculture significant in the context of rural development in India?

Answer: The development of the rural sector is significant as it is largely represented by agriculture. Agriculture plays important roles including: having a major share in national income, being the largest source of employment, provision of food surplus for the expanding population, contributing to capital formation, providing raw material to industry, acting as a market for industrial products, and holding importance in international trade.

2. What percentage of India’s GDP did agriculture account for in 1950 and 2009-10?

Answer: In 1950, agriculture accounted for 56 per cent of India’s GDP. By 2009-10, its share in GDP had fallen to 14.5 per cent.

3. Compare the share of workforce employed in agriculture in India to that in Japan, France, the UK, and the USA.

Answer: Nearly 60 per cent of the workforce in India is still employed in agriculture and allied activities in rural areas. In contrast, this percentage is only 4 in Japan and France, while in the UK and the USA only 2 per cent of the economically active population is engaged in agriculture.

4. Highlight the implications of the fact that agriculture, which provides livelihood to almost 60 per cent of the workforce, contributes to nearly 23 per cent of the GDP in India.

Answer: This implies that a large number of workers earning low incomes are trapped in rural areas, particularly in agriculture. The productivity of rural workers is low, resulting in low incomes and this proves to be a drag on national development. Development of the village community and of agriculture in particular will pave the way for a general development of the economy.

5. List the improvements in various areas of consumption and amenities in rural India between 1993-94 and 2016-17.

Answer: Between 1993-94 and 2016-17:

• The per capita edible oil consumption in rural areas rose by 48.3 per cent.
• The proportion of rural households using cooking gas increased manifold from 15 per cent to 81.7 per cent.
• Per Capita monthly consumption in rural India grew by 19 per cent.
• Electricity usage in households increased from 54 to 69 per cent in rural areas.
• Purchase of readymade garments rose by 83 per cent and of hosiery products.
• Refrigerator use in rural households increased from 4 to 15 per cent.
• Proportion of TV households in rural areas rose from 19 to 26 per cent.

6. What was the decline in poverty rate in India between 1993-94 and 2016-17?

Answer: Between 1993-94 and 2016-17, poverty declined from 26 per cent to 21.9 per cent. That is, 49 million people rose above the poverty line as per the official statistics.

7. How does the Chinese experience relate to the importance of improving the rural sector for achieving a high rate of growth?

Answer: Rural development is important and it is ongoing in India. It will be appropriate at this point to understand the Chinese experience of achieving a high rate of growth by first improving its rural sector.

8. What are the three categories into which credit needs of the typical Indian farmer are classified?

Answer: The credit needs of the typical Indian farmer are broadly classified into three categories:

• Short term credits to meet their consumption needs every year till harvest time and to purchase inputs like seeds, fertilizers, pesticides, etc. This stretches over a period of 6 to 12 months.
• Medium term credits to purchase machinery or constructing wells or to meet social obligations, which generally stretches over a period of 12 months to 5 years.
• Long-term credit for the purchase of additional land or for some other productive purposes, stretching over a period of 5 to 20 years.

9. How are the sources of rural credit divided?

Answer: The sources of rural credit are divided into two categories, i.e. non Institutional and Institutional.

10. What are the non-institutional sources of rural credit in India?

Answer: The non-institutional sources of rural credit in India are Moneylenders, landlords, and village traders.

11. Highlight the roles and significance of Cooperative Credit Societies in rural credit.

Answer: Cooperative Credit Societies account for about 17-19 per cent of rural credit flow and ensure timely and rapid flow of credits to the farmer. The main focus of these credit societies is to eliminate the moneylenders from the profile of credit agencies and spread credit facilities across all regions of the country.

12. What is the main aim of cooperatives in the rural credit market?

Answer: The main aim of the cooperative was to get the poor and indebted farmers out of poverty and out from the clutches of money lenders.

13. Describe the role and functions of NABARD in the field of rural credit.

Answer: NABARD (National Bank for Agricultural and Rural Development) handles policy, planning, and operations in the field of rural credit and related economic activities. It sources as a funding agency for institutions providing credit to rural areas. NABARD takes measures to improve the credit delivery system and monitors and evaluates the projects refinanced by it.

14. Explain the significance of Cooperative Societies in the Rural Credit Market and their contributions to the development of the rural sector.

Answer: Cooperatives play a significant role in the development process of the rural sector, contributing to the overall economy of India. Cooperatives cover more than 97% of Indian villages. They provide credit to farmers, offer top-quality fertilizers, seeds, insecticides, pesticides, etc., at reasonable prices, and provide marketing, warehousing, and transport support. Service cooperative societies help the poor and marginal farmers with machinery on rent. Rural cooperative societies have also expanded into sectors like real estate, power, insurance, health care, and communication. The main aim of cooperatives is to uplift poor and indebted farmers from poverty and free them from the clutches of money lenders. If these cooperatives continue working towards development, the quality of rural life could surpass that of urban India.

15. Discuss the development and significance of institutional agencies like Cooperative Credit Cooperatives, Land Development Banks, and Central Cooperative Banks in the rural credit scenario post the sixties.

Answer: Post the sixties, Agricultural Credit Cooperatives, Land Development Banks, and Central Cooperative Banks were established to provide credit at low rates and for varying needs in rural areas. Commercial banks were nationalised in 1969. Regional Rural Banks (RRB’s) were established later. In 1982, the National Bank for Agriculture and Rural Development (NABARD) was set up as the apex refinancing institution for rural and agricultural credit. Recently, Self-Help Groups (SHG’s) were established to assist the existing institutions that have proven to be inadequate and much distanced from the rural beneficiaries to understand their needs fully. Credit from all these sources has increased significantly since 2003-04. However, challenges like farmer suicides in regions like Vidarbha highlight the need for further improvements in making rural credit more suitable to local needs and raising awareness of its existence.

16. When was the Indian Co-operative Societies Act promulgated?

Answer: The Indian Co-operative Societies Act was promulgated in 1904.

17. How did the role of cooperative societies change after independence?

Answer: After independence, the role of cooperative societies grew to encompass socio-economic development and eradication of poverty in rural India. It became an integral part of Five-Year Plans, making cooperative societies a fundamental part of our economy.

18. What was the importance of the Royal Commission on Agriculture in relation to cooperatives?

Answer: The importance of co-operative was highlighted in the Royal Commission on Agriculture in 1928.

19. In which year was the Reserve Bank of India formed, and what was its stance on cooperative societies?

Answer: The Reserve Bank of India (RBI) was formed in 1935. With its formation, developing more cooperative societies was given due importance.

20. By 1951, how many cooperatives of all kinds were there in India?

Answer: In 1951, there were 1,81,000 cooperatives of all kinds in India.

21. What significant role do farming cooperatives play for farmers?

Answer: Farming cooperatives help farmers to pool their small and fragmented land holdings. This facilitates improvements on the land. It paves the way for intensive cultivation by using modern technology.

22. How do Agricultural processing cooperatives support farmers?

Answer: Agricultural processing cooperatives provide support towards paddy milling, oil seed crushing, processing fruits, vegetables and so on. Farmers, gain through value addition to their produce.

23. Describe the role of Agricultural marketing societies in supporting farmers.

Answer: Agricultural marketing societies enable farmers to benefit from increased bargaining strength. By removing intermediaries they help farmers to have a direct interaction with the consumer. The National Agricultural Cooperative Marketing Federation of India (NAFED) is an example.

24. How do cooperative societies play a role in financing the rural sector through NABARD?

Answer: The financial support to the rural sector is provided through National Bank for Agriculture and Rural Development (NABARD). NABARD provides funds to State Cooperative Banks (SCBS) which in turn, indirectly finances the rural sector. The bulk of the credit goes to the agricultural sector through the District Cooperative Banks and the Primary Agricultural Credit Societies.

25. Highlight the steps taken by the government to regulate the private purchasers of rural products.

Answer: The government undertook the following steps to regulate the private purchasers of rural products: Established regulated markets, encouraged cooperative marketing, developed infrastructure such as godowns, warehouses and cold storage facilities, roads, railways and crop insurance. They also brought in policy changes such as support price, maintenance of buffer stocks and public distribution of essential items. Regulated Markets ensured that the weights used were standardized, so that the brokers and commission agents might not give a low price and would not deduct unnecessary charges from the purchase price.

26. What is the significance of the brand name ‘Amul’ in the context of agricultural marketing?

Answer: The initiative of brand name ‘Amul’ by Gujarat Cooperative Milk Marketing Federation (GCMMF) has been a success story in heralding Operation Flood or the White Revolution since 1946. Its products include liquid and powder milk, sweetened condensed milk, butter, vegetarian cheese, ghee, chocolates, cream, mithaee, Amul Masti Dahi and Shakti, Stamina and Nutramul brand of health drinks. In 2006-07, it has become a billion-dollar entity.

27. What is the Minimum Support Price Policy (MSP)?

Answer: The Minimum Support Price Policy (MSP) is an important step initiated by the government to improve the agricultural marketing system. Under this policy, farmers are given assurance that their produce would be purchased by the government at the specified price. The farmers are free to sell their produce at a price higher than the minimum support price in the open market. Therefore, the farmers are always assured of some minimum income from the sale of their agricultural produce. 

28. Why has the government built warehouses for farmers?

Answer: The government built warehouses for the farmers with a view to avoiding wastage and distress sale. Millions of tonnes of agricultural produce is spoiled under the open sky because of the lack of availability of warehouses. Central and State warehousing corporations are the principal government agencies offering storage space to the farmers. This has helped farmers to sell their agricultural produce at the right time in the right condition. 

29. Describe the role of regulated markets in agricultural marketing.

Answer: Regulated markets are another major step taken by the government where farmers can sell their produce at a monitored price. There is a market committee that includes representatives of the government, the farmers, and the traders. This committee ensures that the farmers get an appropriate price for their produce. 

30. Highlight the developments related to infrastructural facilities in rural India.

Answer: Infrastructural facilities in rural India have been enhanced. A significant component of rural development is the provision of roads for connectivity, which is essential for social and economic well-being. Families living alongside roads benefit from better health facilities, greater educational opportunities, and higher ownership of assets compared to families in unconnected remote villages. Although villages with a population above 1,500 are mostly connected by road, more than 45 per cent of villages with fewer than 1,000 people still need connection. The government has allocated resources to ensure all-weather road access to all villages with population above 1,000 by 2003, and for villages with population between 500 and 1,000 by 2007, and this has been satisfactorily implemented. The Bharat Nirman initiative also aims at improved connectivity. 

31. Explain the significance of insurance and risk management in rural areas.

Answer: Insurance and risk management have expanded in rural areas due to the larger risks faced by farmers as they adopt new technologies and increase input intensities. Risks arise due to a lack of knowledge of the requirements of new seeds and other technologies for achieving productivity gains. Many farmers cannot bear the downside risks, as evident from incidents of farmer suicides when new seeds fail to deliver the expected output, expenditures on bore wells prove fruitless, or market prices collapse unexpectedly. Farmers need protection against these risks. Insurance provides one way, but only 4 per cent of farmers are currently covered by any crop insurance in India. Crop insurance only protects against yield loss and doesn’t cover price risk. Additionally, farmers also need coverage against other risks like accidents. For instance, in Gujarat and Maharashtra, governments have assisted farmers in constructing warehouses to store crops. 

32. How has the Public Distribution System (PDS) been designed to support farmers and the economically weaker sections?

Answer: The Public Distribution System (PDS) was established to provide procured goods to households at reasonable prices through a well-established system. Cooperative trading agencies such as the Food Corporation of India (FCI) and the Tobacco Board were set up to buy any excess with the farmer at the Minimum Support Price (MSP). ‘Ration shops’ have been established to supply essential commodities to the Economically Weaker Sections (EWS’s) at very low prices. 

33. Discuss the significance of regulated markets and private initiatives in servicing agricultural production.

Answer: Agricultural production was serviced through 7,566 regulated markets, and there were 21,780 rural primary/periodic markets, known as mandis, bazaars, or haats. These local markets ensured farmers a minimum return for their produce. However, there is still a predominance of private traders and commission agents in agricultural goods due to factors like a lack of regulation at the retail level and under-performance by the government in providing adequate roads and storage facilities. There were also novel private initiatives, like farmers getting price information from e-choupals via satellite receivers. After bargaining, they could sell online to supermarkets, then buy all their inputs and necessities. This shows the evolution of the Indian farmer from selling to local agents and wholesalers to being sought after by supermarket retailers, like the Reliance group. 

34. What do economists believe is crucial for the development of rural India and India as a whole?

Answer: Economists believe that education and connectivity are vital for the development of rural India and India at large. They argue for strengthening rural infrastructure related to education, healthcare, transport, telecom, power, and water. Unless there are bold steps towards a more geographically dispersed and equitable development paradigm, disparities between rural and urban areas will widen, leading to increased migration to cities and the rapid expansion of urban slum areas. One proposed approach is to link clusters of villages together by high-speed circular highways, bringing large populations into circular communities and promoting a balanced and distributed development of urban services along the ring roads. 

35. What are some of the new avenues and techniques in farming that can lead to faster development of rural areas?

Answer: Diversification, Horticulture, Animal husbandry and fishery, Organic farming.

36. How can Rural Development be achieved?

Answer: Rural Development can be achieved by agricultural diversification into different crops or by taking to alternative work such as agro-industry or livestock, fisheries, etc. Organic farming is also coming up in a big way in India with many people becoming aware of the need for pesticide-free food.

37. What role does diversification play in rural development?

Answer: Diversification calls for specific requirements of different markets to be serviced, and these requirements vary depending on whether the market is domestic consumption, agro-processing or exports. Producers’ cooperatives and contract farming are ways to help establish these linkages and also to provide farmers with necessary inputs, extension and other advice.

38. What significance does horticulture hold for India?

Answer: Horticulture has emerged as a growing profession in rural India. It is India’s pride. The diverse climate has been a boon in providing a variety of fruits, vegetables, and flowers. India produces the maximum cauliflower in the world and is the second-largest producer of fruits and vegetables. The National Horticulture Mission (NHM) proposes to double this output by 2012. Horticulture products are perishable commodities, and therefore, very efficient linkages need to be put in place between farms and final buyers. This requires modern methods of grading, post-harvest management, cold storage, etc.

39. Explain the role of Animal husbandry and fishery in rural development.

Answer: Animal husbandry and fishery provide for about 30 per cent of the value of the output of Agriculture and Allied Sector and provide full time and part-time employment to 5.5 per cent of the total working population, the majority of whom are women. It is a major source of occupation in arid and semi-arid regions. Products like milk, eggs, meat, egg powder, and live poultry are even exported to countries such as Japan, Denmark, Poland, and the USA. India continues to be the largest producer of milk in the world with a total production of 91 million tonnes in 2005-06. Yet the per capita availability of milk at 231 gm per day during 2003-04 is still very low. The fisheries sector has performed well, but vast potential exists, particularly in inland fishery.

40. What is the Approach Paper to the Twelfth Five-Year Plan’s view on sustaining agricultural productivity?

Answer: The Approach Paper to the Twelfth Five-Year Plan states: “In the longer run, growth in agricultural productivity can be sustained only through continuous technological progress. This calls for a well-considered strategy for prioritised basic research, which is now all the more urgent in view of mounting pressure on scarce natural resources, climate change and also the shrinking availability of spill-overs from international public research. For ushering in a second green revolution, a strategy that frees us from the past binds is called for.”

41. Define organic farming and explain its benefits.

Answer: Organic farming is farming without using chemicals. It is a holistic way of life that looks to benefit every aspect of nature and life with which agricultural practices interact. Hence, organic farming is also about the environment, agricultural traditions, seed bio-diversity, animal welfare, rural communities, self-reliance, sensible energy use, soil and water conservation, and importantly, human health. Instead of placing unreasonable demands on the plant or soil, organic agriculture works in association with them, feeding the soil which, in turn, feeds the plant in a natural way. Chemical agriculture has adversely affected the environment, farm diversity, farming communities, farm animals, food quality, and consumer health. The focus of agriculture today is on quantity and appearance rather than intrinsic quality, leading to issues like pesticide residues in food and water.

42. Discuss the adverse impacts of using pesticides and chemicals in farming.

Answer: Use of pesticides and chemicals leads to a loss of seed diversity. There’s contamination of water resources by pesticides – the twin controversies in 2003 regarding pesticide content in bottled drinking water and aerated beverages in India are examples. Even if beverage manufacturers are blamed for allowing pesticide residue in their products, pesticides got into the water supply because of the agriculture system which uses them. There’s also poorer soil quality and falling groundwater levels since agricultural chemicals require plenty of water to respond. Hybrids also usually need more water compared to local varieties. This leads to greater dependence of farmers on external inputs and increased risks due to higher crop production expenses and lower net returns.

Additional/extra MCQs

1. What is rural development primarily aimed at?

A. Broadening the urban infrastructure B. Focusing solely on agricultural growth C. Increasing GDP through industrialization D. Improving levels of living for rural people through various initiatives

Answer: D. Improving levels of living for rural people through various initiatives

2. In 2009-10, what percentage of India’s GDP did agriculture account for?

A. 2% B. 56% C. 14.5% D. 23%

Answer: C. 14.5%

3. In which country is only 2 per cent of the economically active population engaged in agriculture?

A. India B. Japan C. France D. USA

Answer: D. USA

4. Which sector has the Tenth Five-Year Plan of India envisaged a growth rate of 4 per cent per annum for?

A. Industrial sector B. Service sector C. Agriculture D. IT sector

Answer: C. Agriculture

5. Between 1993-94 and 2016-17, how much did the per capita edible oil consumption rise in rural areas of India?

A. 22.48% B. 19% C. 48.3% D. 83%

Answer: C. 48.3%

6. By 2016-17, what percentage of rural households in India used cooking gas?

A. 15% B. 54% C. 81.7% D. 94%

Answer: C. 81.7%

7. In 2016-17, how many people in India rose above the poverty line compared to 1993-94?

A. 26% B. 21.9% C. 49 million D. 5.5%

Answer: C. 49 million

8. Between 1993-94 and 2016-17, by how much did the proportion of TV households increase in rural areas of India?

A. 7% B. 26% C. 59% D. 35%

Answer: B. 26%

9. Into how many categories are the credit needs of the typical Indian farmer classified?

A. One B. Two C. Three D. Five

Answer: C. Three

10. What is the primary purpose of Cooperative Credit Societies in the rural credit market?

A. To compete with commercial banks B. To increase interest rates C. To eliminate moneylenders from the profile of credit agencies D. To partner with government agencies

Answer: C. To eliminate moneylenders from the profile of credit agencies

11. For what duration does medium-term credit for farmers usually stretch?

A. 1 to 6 months B. 6 to 12 months C. 12 months to 5 years D. 5 to 20 years

Answer: C. 12 months to 5 years

12. Which institution is responsible for handling policy, planning, and operations in the field of rural credit?

A. Cooperative Credit Societies B. Regional Rural Banks C. NABARD D. Land Development Banks

Answer: C. NABARD

13. What additional support, apart from credit, do cooperatives provide to farmers?

A. High-quality medicines B. Urban housing C. Top-quality fertilizers, seeds, insecticides, and pesticides D. Advanced technological gadgets

Answer: C. Top-quality fertilizers, seeds, insecticides, and pesticides

14. Why were Agricultural Credit Cooperatives, Land Development Banks, and Central Cooperative Banks established?

A. To compete with non-institutional sources B. To provide credit at high rates C. To provide credit at low rates for varying needs in the rural areas D. To focus only on urban areas

Answer: C. To provide credit at low rates for varying needs in the rural areas

15. What recent group has been established to assist existing institutions in understanding the needs of rural beneficiaries?

A. Rural Development Groups B. Urban Support Clusters C. Self-Help Groups (SHG’s) D. Farmer Beneficiary Societies

Answer: C. Self-Help Groups (SHG’s)

16. What is the primary aim of cooperative societies in the rural credit market?

A. To monopolize the market B. To get the poor and indebted farmers out of poverty and away from money lenders C. To promote urban farming D. To compete with foreign markets

Answer: B. To get the poor and indebted farmers out of poverty and away from money lenders

17. In which year was the Indian Co-operative Societies Act introduced in India?

A. 1901 B. 1904 C. 1928 D. 1935

Answer: B. 1904

18. After independence, cooperatives in India began to focus on what primary goal?

A. Eradication of poverty in urban India B. Promoting industrialization C. Socio-economic development in rural India D. International trade and commerce

Answer: C. Socio-economic development in rural India

19. Which bank, formed in 1935, emphasized the importance of developing more cooperative societies?

A. State Bank of India B. Punjab National Bank C. HDFC Bank D. Reserve Bank of India

Answer: D. Reserve Bank of India

20. Farming cooperatives primarily assist farmers by enabling them to…?

A. Buy farming equipment B. Pool their small and fragmented land holdings C. Process their farm produce D. Market their produce overseas

Answer: B. Pool their small and fragmented land holdings

21. Which organization provides financial support to the rural sector through the State Cooperative Banks?

A. RBI B. SEBI C. NABARD D. IRDA

Answer: C. NABARD

22. The brand ‘Amul’ is associated with which cooperative federation?

A. National Agricultural Cooperative Marketing Federation of India (NAFED) B. Krishak Bharathi Cooperative Ltd. (KRIBHCO) C. Kerala Cooperative Milk Marketing Federation (KCMMF) D. Gujarat Cooperative Milk Marketing Federation (GCMMF)

Answer: D. Gujarat Cooperative Milk Marketing Federation (GCMMF)

23. Which regulated market initiative ensures standardized weights so farmers are not underpaid by brokers?

A. Cooperative marketing B. Regulated Markets C. Private agricultural societies D. Farmer’s direct selling

Answer: B. Regulated Markets

24. The primary goal of Agricultural processing cooperatives is to…?

A. Organize farmer protests B. Export farm produce C. Support paddy milling, oil seed crushing, and process fruits & vegetables D. Provide financial loans to farmers

Answer: C. Support paddy milling, oil seed crushing, and process fruits & vegetables

25. What is the purpose of the Minimum Support Price Policy (MSP)?

A. To ensure farmers buy seeds at a specified price B. To provide storage facilities to farmers C. To assure farmers that their produce would be bought by the government at a specified price D. To provide transportation facilities for farmers

Answer: C. To assure farmers that their produce would be bought by the government at a specified price

26. Why did the government build warehouses for farmers?

A. To sell farming equipment B. To avoid wastage and distress sale C. To provide meeting places for farmers D. To serve as training centers

Answer: B. To avoid wastage and distress sale

27. What is the role of regulated markets?

A. To promote international trade B. To ensure farmers get bank loans C. To offer storage facilities to farmers D. To ensure farmers get appropriate price for their produce

Answer: D. To ensure farmers get appropriate price for their produce

28. Which initiative aims at improved connectivity in rural areas?

A. Regulated markets B. Warehouse provisions C. Bharat Nirman D. MSP

Answer: C. Bharat Nirman

29. What percentage of farmers in India is currently covered by crop insurance?

A. 50% B. 10% C. 4% D. 25%

Answer: C. 4%

30. Which cooperative trading agency was set up to buy any excess produce from the farmer?

A. The Agricultural Board B. The Food Corporation of India (FCI) C. The Rural Development Corporation D. The Farmers Union

Answer: B. The Food Corporation of India (FCI)

31. How are agricultural goods primarily sold in India?

A. Directly to consumers B. Through supermarket retailers C. Predominance of private traders and commission agents D. Only through government agencies

Answer: C. Predominance of private traders and commission agents

32. What are the two crucial factors for the development of rural India according to economists?

A. Warehousing and transport B. Education and connectivity C. Insurance and trading D. Agriculture and urbanization

Answer: B. Education and connectivity

33. Which of the following is NOT mentioned as a new avenue for rural development?

A. Horticulture B. Biofuel farming C. Organic farming D. Animal husbandry and fishery

Answer: B. Biofuel farming

34. How can efficient linkages for horticulture products be established between farms and final buyers?

A. By traditional bartering B. By improving transportation only C. By modern methods of grading, post-harvest management, and cold storage D. By solely relying on exports

Answer: C. By modern methods of grading, post-harvest management, and cold storage

35. What percentage of the value of the output of Agriculture and Allied Sector is provided by Animal husbandry and fishery?

A. 5.5% B. 10% C. 30% D. 50%

Answer: C. 30%

36. What is the main focus of agriculture in its chemical avatar today?

A. Nutritional content B. Organic methods C. Quantity and outer appearance D. Seed biodiversity

Answer: C. Quantity and outer appearance

37. Which country was NOT mentioned as an importer of India’s agricultural products?

A. Japan B. Denmark C. Russia D. Poland

Answer: C. Russia

38. What does the Approach Paper to the Twelfth Five-Year Plan emphasize for sustained agricultural productivity?

A. Import of foreign technology B. Continuous technological progress C. Focusing solely on organic farming D. Relying on international public research

Answer: B. Continuous technological progress

39. Organic farming primarily focuses on benefiting every aspect of:

A. Only soil and water B. Urban communities C. Nature and life with which agricultural practices interact D. Outer appearance of produce

Answer: C. Nature and life with which agricultural practices interact

40. Which of the following has NOT been an effect of using pesticides and chemicals in farming?

A. Increase in seed diversity B. Contamination of water resources C. Poorer soil quality D. Falling ground water levels

Answer: A. Increase in seed diversity

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