Rural population (% of total population) in Sri Lanka was reported at 80.97 % in 2022, according to the World Bank collection of development indicators, compiled from officially recognised sources. and supports the agricultural production of tea, rice, vegetables, fruits, and other cash crops. In total, agriculture contributes about 8% of the country’s gross domestic product.
Six proven ways to transform rural communities:
- Sell, sell, sell
When small-scale farmers sell their produce at a bigger scale, they’re able to earn more, save more and invest in their businesses.
While challenges, like climate change, may create obstacles to selling produce, IFAD projects help farmers overcome them. In Bangladesh, climate-proofed community markets and roads helped increase crop sales by 70 per cent, even during the monsoons.
With GDP for the world’s least developed countries expected to rise by 1.7 per cent this year, economic growth comes with even more opportunity for local farmers to grow their profits.
- The bottom line
The quickest way to transform rural communities is to increase rural incomes. This aim should be at the centre of every project.
In Tajikistan, annual incomes of IFAD project participants rose by 19 per cent thanks to all actions—from managing pastures to building reliable water sources—being focused on achieving this one overarching goal.
Rather than growing lots of lower value produce, producers in Nepal grew a small set of high-value products identified by IFAD experts, including ginger, off-season vegetables and goat meat. The result? Their incomes increased by 50 per cent.
- Resilience is imperative
Resilience means the ability to recover after shocks—and as environmental and climate shocks become increasingly frequent, it has never been more important.
In Ethiopia, modern irrigation schemes mean farmers can grow food—and make an income—all year. With revenues growing by 23 per cent in the dry season and 77 per cent in the rainy season, farmers did not have to sell off assets to get by in hard times.
- Sustainable success
A sustainable intervention keeps reaping rewards, even after the project ends.
In Senegal, producer organisations received subsidies to help them diversify their crops and earn more. As the organisations became financially sustainable, the subsidies were gradually reduced. Five years after the project ended, participants had long-since stopped receiving support—but they were still reaping its benefits.
- Development for rural communities, by rural communities
For rural development to be successful, it must be led by rural people themselves. For example, local communities in Mexico helped design initiatives, tailoring them to local contexts. In leafy Campeche State, local communities chose to sustainably manage the forests so they could benefit from agroforestry products and ecotourism. Now, both the forests and their incomes are growing.
- When you empower a woman, you empower a community
Done right, rural development can empower women. But to know if it’s working, we must track gender metrics throughout our projects.
In Indonesia women came together to process fish and in doing so increased women’s participation in the industry by 27 per cent. Meanwhile, households participating in Kenya’s SDCP were nine time more likely to have a woman in charge of the family finances.
In both instances, women were given the tools to reach economic empowerment. This is not only central to realizing women’s rights and gender equality but also key to achieving the 2030 Agenda for Sustainable Development.
Rural Development in India
Infrastructure plays a critical role in the economic development of any country and Economic growth without investment in rural infrastructure is unsustainable – and unethical. According to the World Bank report, 2021 rural population in India was reported at 64.61 %. Therefore rural development has assumed global attention, especially among developing nations. For a country like India, it has a great significance where rural development focuses on the development of the sections of rural economies, that experience serious poverty issues and effectively aims at developing their productivity.
Rural infrastructure is of utmost importance for stimulating the rural economy and achieving the United Nations’ Sustainable Development Goals (SDGs) by 2030. India can become a $5 trillion economy by FY2025 too but it requires additional infrastructure. Studies reveal that an almost 1% increase in the stock of infrastructure is associated with a 1% increase in the gross domestic product (GDP) across countries. Several studies also revealed the positive impact of infrastructure development on overall rural welfare.
A recent study by Gulati et al found that in six states, viz. Punjab, Madhya Pradesh, Gujarat, Uttar Pradesh, Bihar, and Odisha, there are three factors that explained most of the agrarian growth, i.e., (i) access to infrastructure that includes irrigation, roads, and uninterrupted quality power; (ii) diversification to high-value agricultural products such as fruits, vegetables, and allied activities like dairy and poultry; and (iii) price incentives or favorable terms of trade. Rural infrastructure is a crucial ingredient for agriculture and agro-industry development and the overall economic development of rural areas, also provides basic amenities that improve the quality of life-style in rural areas. Adequate infrastructure not only raises productivity but also lowers production costs, thereby improving rural livelihoods and human development in rural areas.
Access to public infrastructure also affects household labour, transforms gender roles, and favour the diversification of their livelihoods and activities generating income. Hence, the majority of studies show that infrastructure investment has positively impacted rural income. Binswanger et al., in a study of 13 states in India, found that while investments in rural infrastructure lowered transportation costs, it also increased farmers’ access to markets, and led the commercialisation of agriculture.
According to the need for stepping up the agricultural growth rate to 4.5 per cent in the Ninth Five Year Plan, it was necessary to emphasise on developing rural infrastructure such as – irrigation, roads, bridges, etc. as an essential requirement for better productivity of capital and labour. However, one of the basic limitations to creating adequate infrastructure was the lack of resources and difficult financial position of the state governments, who are mainly responsible for developing and maintaining rural infrastructure. Therefore, it was important to create a fund in the name of Rural Infrastructure Development Fund (RIDF) to be operationalized by NABARD.
It aimed at financing rural projects in the area of basic infrastructure like agriculture, production, transport, marketing and other allied activities. India has prioritized infrastructure development maximum during FY2021. The Taskforce on National Infrastructure Pipeline (NIP) estimated a capital expenditure of 7,73,915 crore between FY2020 and FY2025 on rural infrastructure development by the centre and states.
Jeevan Thiagarajah