UPSC Prelims Practice Questions — Revisiting the farmer question

Q1. With reference to the cost concepts used by the Commission for Agricultural Costs and Prices (CACP), consider the following statements: Which of the statements given above is/are correct?

  1. For a farm that relies wholly on hired labour and uses no family labour, the A2 and A2+FL costs would practically coincide.
  2. The imputed value of unpaid family labour is counted within the A2 cost because it is an actual input into production.
  3. For every farm, C2 cost is at least as high as A2+FL cost, which in turn is at least as high as A2 cost.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q2. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. An MSP fixed at one and a half times the A2+FL cost of a crop yields a noticeably smaller percentage return when the same MSP is measured against the C2 cost of that crop.
  2. The C2 cost adds imputed rent on owned land and interest on owned fixed capital to the A2+FL cost.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q3. With reference to the fixing of Minimum Support Prices (MSP) in India, consider the following statements: Which of the statements given above is/are correct?

  1. Because MSP is meant to be remunerative, the CACP bases its recommendation on the cost of production alone and disregards demand–supply conditions.
  2. The CACP takes into account both domestic and international prices of a crop while framing its recommendation.
  3. The Government fixes MSP after considering the views of State Governments and Central Ministries, so the CACP's recommendation is advisory rather than self-executing.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1, 2 and 3
  • D. 3 only

Q4. Consider the following assertion: A part of the workforce engaged in Indian agriculture is in a state of disguised unemployment. Which of the following statements support/supports the above assertion?

  1. Agriculture employs about 46% of India's workforce but contributes only about 15–18% of its GDP.
  2. About 86% of farmers hold less than 2 hectares, so several family members often share work on a single small plot.
  3. Heavy use of irrigation has led to groundwater depletion in several farming regions.
  • A. 1 only
  • B. 2 and 3 only
  • C. 1, 2 and 3
  • D. 1 and 2 only

Q5. With reference to domestic support under the WTO Agreement on Agriculture, consider the following statements: Which of the statements given above are correct?

  1. The de minimis allowance exempts a limited amount of trade-distorting support, expressed as a share of the value of agricultural production.
  2. Green Box subsidies are allowed without any financial limit, provided they comply with the policy-specific criteria.
  3. Blue Box support is Amber Box-type support that also requires farmers to limit production.
  4. The de minimis ceiling for most developing countries is the same percentage as that for developed countries.
  • A. 1, 2 and 3 only
  • B. 2 and 3 only
  • C. 1, 2, 3 and 4
  • D. 1 and 4 only

Q6. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. Under the WTO Agreement on Agriculture, purchases for public stockholding made at government-fixed (administered) prices are counted as trade-distorting domestic support.
  2. Green Box subsidies may include price support, provided they are funded by the government.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q7. With reference to the adjudication of inter-State river water disputes under the Inter-State River Water Disputes Act, 1956, consider the following statements: Which of the statements given above is/are correct?

  1. A tribunal's decision, once published in the Official Gazette by the Central Government, has the same force as an order or decree of the Supreme Court.
  2. Once a tribunal's award has been notified, the disputing States have no route by which the award can be brought before the Supreme Court.
  • A. 1 only
  • B. 2 only
  • C. Both 1 and 2
  • D. Neither 1 nor 2

Q8. Four farmers grow the same crop in the same season with identical spending on seed, fertiliser and hired labour and identical use of family labour. They differ only in how they hold land and machinery. For which one of them will the gap between the CACP's C2 cost and A2+FL cost be the largest?

  • A. A farmer who owns all land and also owns the tractor used
  • B. A farmer who owns all land but hires a tractor on rent
  • C. A farmer who leases in all land and hires a tractor on rent
  • D. A farmer who leases in all land but owns the tractor used