UPSC Prelims Practice Questions — Cabinet okays rabi MSP hike for 2027-28

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

  1. C2 cost is generally lower than A2+FL cost because it leaves out the paid-out expenses on hired inputs.
  2. A2+FL cost exceeds A2 cost because it adds an imputed value for unpaid family labour.
  3. Imputed rent on owned land and interest on owned fixed capital enter C2 cost but not A2+FL cost.
  • A. 1, 2 and 3
  • B. 2 only
  • C. 1 and 2 only
  • D. 2 and 3 only

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

  1. An MSP that yields a 50% return over the cost base used for the '1.5 times cost of production' norm yields a smaller percentage return over C2 cost for the same crop.
  2. C2 cost excludes the imputed value of family labour, which is counted in 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. The Union Government approved Minimum Support Prices for Rabi Marketing Season 2027-28 in the autumn of 2026. These prices are intended to govern the purchase of which one of the following?

  • A. Crops sown in late 2026 and procured from spring 2027
  • B. Crops sown in late 2027 and procured from spring 2028
  • C. Crops sown in the 2027 monsoon and procured from autumn 2027
  • D. Crops sown in late 2026 and procured from autumn 2027

Q4. With reference to price support for pulses and oilseeds under PM-AASHA, consider the following statements: Which of the statements given above is/are correct?

  1. Under the Price Deficiency Payment Scheme, a registered farmer selling an oilseed in a notified market below MSP is paid the difference between MSP and the selling/modal price, without the Government taking physical delivery of the produce.
  2. The Price Support Scheme is the channel through which wheat is procured for the central pool.
  3. A State may run the Price Support Scheme in some districts and the Price Deficiency Payment Scheme in others for the same oilseed in the same season.
  • A. 2 and 3 only
  • B. 1 only
  • C. 1 and 2 only
  • D. 1 and 3 only

Q5. Consider the following facts. In Rabi Marketing Season 2026-27, the MSP margin over the all-India weighted average cost of production was 109% for wheat and 50% for safflower. For Rabi Marketing Season 2027-28, safflower received the largest MSP increase among Rabi crops, and the Government stated that margins over cost ranged from 50% to 106%. India meets over half of its edible-oil demand through imports. Which of the following inferences can be drawn from the above?

  1. The 2027-28 revision is consistent with using relative MSP changes to nudge farmers towards oilseeds.
  2. Safflower had the highest margin over its cost of production among Rabi crops in 2027-28.
  3. Wheat's per-quintal cost of production was lower than safflower's in 2026-27 because wheat's margin was higher.
  4. In 2026-27, safflower's MSP met, without exceeding, the benchmark of 1.5 times the cost of production.
  • A. 1, 3 and 4 only
  • B. 2, 3 and 4 only
  • C. 1 and 4 only
  • D. 1 and 2 only

Q6. Suppose the MSP of wheat is raised for a marketing season while the central issue price of wheat distributed under the National Food Security Act is left unchanged. Consider the following statements about the likely consequences: Which of the statements given above is/are correct?

  1. The economic cost of wheat procured for the central pool would tend to rise.
  2. The food subsidy per quintal of wheat distributed under the Act would tend to rise.
  3. The additional cost would be met from State budgets because State agencies also carry out procurement.
  • A. 1 only
  • B. 1, 2 and 3
  • C. 1 and 2 only
  • D. 2 and 3 only

Q7. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. The Union Government's subsidy per quintal of wheat distributed under the National Food Security Act rose from January 2023 even if the economic cost of wheat was unchanged.
  2. From January 2023, foodgrains under the National Food Security Act are provided free of cost to Antyodaya Anna Yojana households and priority household beneficiaries.
  • 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

Q8. With reference to the WTO Agreement on Agriculture as it bears on India's MSP-based procurement, consider the following statements: Which of the statements given above is/are correct?

  1. The de minimis allowance for trade-distorting domestic support is expressed as a share of the value of agricultural production.
  2. The de minimis ceiling is the same share of the value of production for developed and developing countries.
  3. Under the Bali decision, Members agreed to refrain from legal challenge if a developing country breached its Amber Box limit on account of public stockholding for food security.
  • A. 2 and 3 only
  • B. 3 only
  • C. 1 and 2 only
  • D. 1 and 3 only