Rural Economics - Dr.Bindhu K

1. Unit - I

2.  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.  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.  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.  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. Topographical Factors:
 Land
 Water
 Climate
Economic Factors:
 Condition of Agriculture
 Economy
Social Factors:
 Peace
 Security
 Cooperation
 Intelligence

7.  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.  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, 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.  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.  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.