1. Lecture 7 Market prices & access to inputs, services and credit.
MarketPrices and Accessto inputs, servicesandcredit
Rural development is hindered by the insufficient utilization of inputs. Only specific groups of farms
employ modern, yield increasing technologies.
To achieve these goals of increased productivity and equity, governments should consider action to:
A. INPUTS AND SERVICES
(i) Adopt and adjust pricing policies, interest rates and other related policies to promote increased and
more efficient use of purchased agricultural inputs, in particular by small farmers or groups thereof
(ii) Establish and strengthen local and regional institutions for the delivery of inputs and social and
economic services,with direct and increasing involvement of organized groups of small farmers and other
groups of rural poor, in order to ensure equitable access and fair prices
(iii) Ensure timely provision, in a coordinated manner, of the full range of services, including credit,
material inputs, extension, agro-technical training, marketing outlets and the effective integration of the
delivery system at the local level
(iv) Experiment with alternative methods of delivery of extension services in order to develop systems
best suited to particular countries or regions within countries, reorient extension services generally toward
the needs of small farmers and cooperatives and use communication media including audio-visual aids in
such programmes.
(v) Design programmes and institutions for an increased flow of inputs to subsistence and other small
farmers and cooperatives, at preferential prices, where appropriate, through modified market institutions
and through non-market mechanisms.
(vi) Improve the access of ruralpeople to relevant social services, in particular those relating to health and
nutrition, and design special programmes for the delivery of such services to vulnerable groups.
B. CREDITS AND MARKETS
(i) Establish and strengthen market towns, common facilities and rural service centres,in order to
facilitate wider access to inputs and services,secure economies of scale and minimize the costs of
delivery systems.
(ii) Improve marketing, storage and transport of farm products, especially those of small farmers,making
use of local informal markets,farmers' cooperatives and semi-autonomous agencies.
(iii) Design institutional credit schemes which increase the volume of credit available to peasant
producers through public and private lending institutions and which reorient their practices toward the
needs of small farmers for housing, consumption and production credit and for redemption of debts to
traditional moneylenders.

2. (iv) Establish subsidy funds to compensate for higher costs and risks of credit and for the higher costs of
supply of inputs and other services to small farmers.
(v) Set up risk funds to compensate credit institutions for costs of defaults on loans to small farmers and
low-income producers.
(vi) Adopt measures to ensure fair returns to producers and to reduce seasonaland excessive year-to-year
fluctuations in prices of agricultural products and inputs
(vii) Establish, where feasible, schemes to provide insurance, compensatory financing and price support
to minimize the risk to small farmers from crop losses and product price fluctuations.
(viii) Expand and improve the rural infrastructure required for delivery of inputs and marketing of outputs
(transport and power facilities, markets, rural service centres,etc.) through both increased allocation of
public funds and mobilization of local resources.
(ix) Design and adopt pricing policies which, in the context of a country's external trading opportunities,
ensure an appropriate allocation of resources between domestic and export crops and permit the
satisfaction of national food and nutritional requirements.
C. RESEARCH
(i) Increase the share of funds for research on problems of rural areas to a level consonant with the
importance of the rural sector in the national economy, and establish specific targets for the share of rural
sector research in total research funds.
(ii) Review existing priorities in research,extension and training in relation to rural development and the
alleviation of poverty and reorient them toward the adaptation and improvement of location-specific
technology suitable for use by small producers and cooperatives.
(iii) Intensify research on special problems of rainfed subsistence agriculture and shifting cultivation as
well as harvest and post-harvest losses and storage.
(iv) Coordinate and integrate economic and technological research with related social science research on
an inter-disciplinary basis, particularly on the socio-economic implications of technological change.
(v) Encourage research and technological innovations which minimize ecological hazards and imbalances
in the exploitation of natural resources.
(vi) Support research on low-cost construction technology appropriate to the needs of the rural poor for
farm buildings, dwellings and other improvements.