Page 187 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 14: Rural Credit and Marketing

(ii) All of the following factors can affect the attractiveness of a market segment except? Notes
(a) the presence of many strong and aggressive competitors
(b) the likelihood of government monitoring
(c) actual or potential substitute products
(d) the power of buyers in the segment
(iii) The type of sales force structure in which the sales force sells along product lines is called a
............... ?
(a) territorial sales force (b) product sales force
(c) customer sales force (d) retail sales force
(iv) Technological advances, shifts in consumer tastes, and increased competition, all of which
reduce demand for a product are typical of which stage in the PLC?
(a) decline stage (b) introduction stage
(c) growth stage (d) maturity stage
14.4 Summary

• The financial requirements of the Indian farmers can be classified into three types depending
upon the period and the purpose for which they are required :
• Farmers need funds for short periods of less than 15 months for the purpose of cultivation or
for meeting domestic expenses.
• We can further classify the credit requirements of farmers into two types—productive and
unproductive loans. The former include loans (a) to buy seeds, fertilisers, implements, etc.
(b) to pay taxes to the Government and (c) to make permanent improvements on land, such as
digging and deepening of wells, fencing of land, etc.
• Broadly, there are two sources of credit available to the farmers—institutional and private.
Institutional credit refers to loans provided to farmers by co-operative societies and co-operative
banks, and commercial banks including regional rural banks (RRBs). Non-institutional or private
sources include money-lenders, traders and commission agents, relatives and landlords.
• The need for institutional credit arises because of the weakness or inadequacy of private agencies
to supply credit to farmers.
• Institutional credit is not exploitative and the basic motive is always to help the farmer to raise
his productivity and maximise his income. The rate of interest is not only relatively low but can
be different for different groups of farmers and for different purposes.
• The major policy in the sphere of agricultural credit has been its progressive institutionalisation
for supplying agriculture and rural development programmes with adequate and timely flow
of credit to assist weaker sections and less developed regions.
• Way back in 1950 the private money-lender reigned supreme in rural India and institutional
sources met no more than three per cent of the credit requirements of farmers.
• The government was of the view that multi-agency approach to rural credit was the real solution
to the emancipation of small farmers from the clutches of money lenders.
• There are many ways by which the farmer may dispose of his surplus produce. This first and
the most common method is to sell away his surplus produce to the village money-lender-cum-
trader, who may buy it either on his own or as an agent of a bigger merchant of the neighbouring
‘mandi’ town.
• In order to have best advantage in marketing of his agricultural produce the farmer should
enjoy certain basic facilities :
(i) He should have proper facilities for storing his goods.
(ii) He should have holding capacity, in the sense, that he should be able to wait for times
when he could get better prices for his produce and not dispose of his stocks immediately
after the harvest when the prices are very low.

LOVELY PROFESSIONAL UNIVERSITY 181