Rural Economics.pptx

Rural Economics - Dr.Bindhu K

1. Rural Economics Unit - I

2. Introduction Economics A science which studies human behavior as a relationship between ends and scarce means which can be put to alternative uses. Rural Economics Application of the principles of economics to the rural sector of the economy.

3. Nature of Rural Economics Inclusive of agriculture and allied activities A social science associated with the allocation of scarce farm resources. Both theoretical and practical in character. Concerned with micro and macro study. Also static and dynamic in nature. Formulating appropriate principles that govern the amount of land, labor and capital. Deals with the market forces that affect the prices of the procurements he buys for farm and non-farm requirement and for the produce he sells.

4. Scope About three-fourth of India's population live in rural areas. Nearly half of the country's national income is derived from agriculture. Around seventy per cent of Indian population get employment through agriculture. Bulk of raw materials for industries come from agriculture and rural sector. Increase in industrial population can be justified only in rural populations' motivation and increasing the purchasing power to buy industrial goods. Growing disparity between the urban elite and the rural poor can lead to political instability.

5. Scope It deals with the principles which underlines the farmers’ problem of what and how to produce and what and how to sell, in order to secure highest profit for himself. It concerned with cost and price specifically with selection land , labor ,equipments for the farm , the choices of the crop and livestock. It deals with the production, processing and distribution of farm products. It is concerned with the role of government in public management, public aid and public regulation. It can also be analyses on the political aspects where self-sufficiency in agricultural products to reduce foreign dependence has become the aim of all nations. It also deals with how the government have initiated to frame agricultural policies to encourage agriculture for maintaining buffer stock and to create contended peasantry. It also studies how the experience of advanced nation have shown that the most effective methods of achieving gains in agricultural output and productivity is through simultaneous development of in the other sectors of the economy. It also concerned with the complementary relationship between agriculture and industry and their mutual dependence between them.

6. Factors determining Rural Economy Topographical Factors: Land Water Climate Economic Factors: Condition of Agriculture Economy Social Factors :  Peace Security Cooperation Intelligence

7. Characteristics of Rural Economy A country of villages and Selfsufficient villages - Impact of Caste System/ Social Stratification Agriculture is the main occupation Underdeveloped Agriculture Lack of infrastructure Indebted farmers Rural Cottage industries Problems of Poverty, unemployment, drought Illiterate people Barter System Highly dependent on nature Uneconomical land and livestock holding Low capital-labor and productivity ratio Long gestation period and low returns Unskilled work force and

8. Social Aspects of India’s Rural Areas A Study of Rural Social Structure A Study of Rural Institutions  A Study of Rural Social Organization A Study of Rural Problems A Study of Religion and Culture A Study of Rural Social Process A Study of Rural Social Control A Study of Social Change A Study of Rural Reconstruction A Study of Rural – Urban Continuum and Contrast A Study of Planning

9. Barter System Barter , the direct exchange of goods or services—without an intervening medium of exchange or money—either according to established rates of exchange or by bargaining. It is considered the oldest form of commerce. Barter is common among traditional societies, particularly in those communities with some developed form of market. Barter refers to exchanging of goods without the use of money.

10. Advantages It is a simple system. There in no over production and under production. The problem of international trade like foreign exchange crisis and adverse balance of payment does not occur. There is no problem of concentration of economic power in the hands of few. Personal and natural resources are ideally utilised to meet the needs of the society. There no much of wastages. This system reaps the benefit of division of labor

11. Disadvantages The double coincidence of wants is required for exchange. The absence of common measure of value creates great problems because a lot of time is wasted to strike a balance. All goods cannot be divided and sub divided and more so the indivisible goods cannot be exchanged for smaller goods. There is an absence of proper and convenient means of storing wealth and value. There is difficulty when it comes to make deferred payment. There is also a problem of transporting goods conveniently from one place to another.