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Indian Economy Questions for IAS Prelims Exam - Agriculture IV

Oct 18, 2016 09:45 IST

    The IAS aspirants should study the Indian Economy section very critically during IAS Preparation. It is very important to know the various aspects of Indian Economy while preparing for IAS Prelims as well as for IAS Mains Exam. Here, we have provided Indian Economy Quiz for IAS Prelims Exam:

    1.    Consider the following statements regarding Sugar Sector Reforms in India:
    I.    India is the largest consumer and largest producer of sugar in the world followed by Brazil.
    II.    Sugar and Sugarcane are notified as essential commodities under the Essential Commodities Act 1955.
    III.    A report on ‘Regulation of the Sugar Sector in India: The way forward’ has been submitted by the Committee under the chairmanship of Dr C. Rangarajan, then Chairman of the Economic Advisory Council to the Prime Minister.

    Which of the following statement(s) is/are correct?
    a.    Only I
    b.    I and II
    c.    II and III
    d.    All of the above

    Answer: c

    Explanation:

    India is the largest consumer and second largest producer of sugar after Brazil. Sugar and Sugarcane are notified as essential commodities under the Essential Commodities Act 1955. The production of sugarcane during 2012-13 is estimated at 334.54 million tonnes. However, the Indian sugar sector suffers from policy inconsistency and unpredictability. The Sugar industry in India is over-regulated and prone to cyclicality due to price interventions.

    Deregulation of the sugar industry has been widely debated for a long time. From a purely economic point of view, greater play of market forces would provide better prices and serve the interests of all stakeholders. The government should come into the picture only in situations where absolutely necessary. Export bans and controls could be replaced with small variable external tariffs to stabilize prices. A report on ‘Regulation of the Sugar Sector in India: The way forward’ has been submitted by the Committee under the chairmanship of Dr C. Rangarajan, then Chairman of the Economic Advisory Council to the Prime Minister.

    GS Economy Questions for IAS Prelims Exam - Agriculture III

    2.    Which of the following countries is the largest producer of Sugar in the world?
    a.    Brazil
    b.    China
    c.    India
    d.    Thailand

    Answer: a

    Explanation:


    Brazil alone contributes for almost 25% of the world's sugar production. Brazil has producing a whopping 721 million metric tons in 2013. Brazilian auto fleets are fully equipped to run on ethanol, so there is great domestic demand for the alternative fuel. In addition to being the world’s largest producer of sugar, Brazil is second in ethanol production only to the United States.

    The largest sugar producers of the world are (descending order): Brazil, India, China, Thailand, Pakistan, Mexico, Colombia, Indonesia and Philippines.

    3.    India stands at which place in oilseeds production in the world?
    a.    1st
    b.    2nd
    c.    3rd
    d.    4th

    Answer: a

    Explanation:

    India is one of the largest producers of oilseeds in the world. However, 50 per cent of its domestic requirements are today, met through imports, out of which crude palm oil and the RBD (Refined, Bleached and Deodorised) palmolein constitute about 77 per cent and soyabean oil constitutes about 12 per cent.

    The oilseeds production of the country has increased more than three-times between 1971-72 and 2007-08, from around 9 Mt to more than 29 Mt, but declined subsequently to around 25 Mt in 2009-10.

    4.    Consider the following statements regarding Agricultural Marketing in India:
    I.    The role of the agriculture market is to deliver agricultural produce from the farmer to the consumer in the most efficient way which is regulated in India through the APMC Acts.
    II.    According to the provisions of the APMC Acts of the states, every APMC (Agricultural Produce Marketing Committee) is authorised to collect market fees from the buyers/traders in the prescribed manner on the sale of notified agricultural produce.
    III.    The relatively high incidence of commission charges on agricultural/horticultural produce renders their marketing cost high, which is an undesirable outcome.

    Which of the following statement(s) is/are correct?
    a.    Only I
    b.    I and II
    c.    II and III
    d.    All of the above

    Answer: d

    Explanation:

    The role of the agriculture market is to deliver agricultural produce from the farmer to the consumer in the most efficient way. Agriculture markets are regulated in India through the APMC Acts. According to the provisions of the APMC Acts of the states, every APMC (Agricultural Produce Marketing Committee) is authorised to collect market fees from the buyers/traders in the prescribed manner on the sale of notified agricultural produce.

    The relatively high incidence of commission charges on agricultural/horticultural produce renders their marketing cost high, which is an undesirable outcome. All this suggests that a single point market fee system is necessary for facilitating free movement of produce, bringing price stabilisation, and reducing price differences between the producer and consumer market segments. Another point to be highlighted is that the cleaning, grading, and packaging of agricultural produce before sale by the farmers have not been popularised by these market committees on a sufficient scale.

    5.    APMC was created to:
    a.    Protect the interest of private sector in agriculture
    b.    Protect the interest of the farmers
    c.    Provide better suggestive measures to enhanced utilisation of green fertiliser
    d.    Protect the interest of the buyers of agricultural produce

    Answer: b

    Explanation:

    According to the provisions of the APMC Acts of the states, every APMC (Agricultural Produce Marketing Committee) is authorised to collect market fees from the buyers/traders in the prescribed manner on the sale of notified agricultural produce.

    Nevertheless, there have been some achievements in leading states like Maharashtra, Karnataka, Andhra Pradesh and Gujarat since the Model APMC Act 2003 has been implemented in those states. Some state governments have granted licences to the private sector for setting up of markets and direct purchase from the farmers in order to provide alternative marketing channels. There is considerable potential for agricultural markets to be competitive.

    As the APMC was created to protect the interests of farmers, it will be in the fitness of things to give farmers the choice of going to the APMC or not. In the light of this, the need is to pursue further reforms in the state APMC Acts.
    GS Economy Questions for IAS Prelims Exam - Agriculture II

    6.    Which of the following was the first the first private sector initiative by the private sector in agricultural marketing?
    a.    E-Chaupal
    b.    Trifed
    c.    Nafed
    d.    None of the above

    Answer: a

    Explanation:


    The e-Choupal, the first private sector initiative by the private sector in agricultural marketing, is a business platform consisting of a set of organisational subsystems and interfaces connecting farmers to global markets. This common structure can be leveraged to procure/provide a host of products and services for the farmer as a producer as well as a consumer. The e-choupal business platform consists of three layers, each at different levels of geographic aggregation. Each of the three layers is characterised by three key elements:
    •    The infrastructure (physical or organisational) through which transactions take place,
    •    The entity (person or organisation) orchestrating the transactions, and
    •    The geographical coverage of the layer.

    7.    Consider the following statements regarding TRIFED:
    I.    The Government established TRIFED (Tribal Co-operative Marketing Development Federation of India Ltd.) in August 1987.
    II.    The basic aim of TRIFED was to save tribals from exploitation by private traders and to offer them remunerative prices for their minor forest produce and surplus agriculture products.
    III.    TRIFED has also been declared an important agency for collecting, processing, storing and developing oil seeds products.

    Which of the following statement(s) is/are correct?
    a.    Only I
    b.    I and II
    c.    II and III
    d.    All of the above

    Answer: d

    Explanation:


    The Government established TRIFED (Tribal Co-operative Marketing Development Federation of India Ltd.) in August 1987. The basic aim of TRIFED was to save tribals from exploitation by private traders and to offer them remunerative prices for their minor forest produce and surplus agriculture products.

    TRIFED started functioning in April 1988. TRIFED has also been declared an important agency for collecting, processing, storing and developing oil seeds products. TRIFED plays the role of an agent of FCI for Government purchase of wheat and rice. It is also an agent of agriculture and cooperation department of Government for purchase of cereals, pulses and oil-seeds. Agriculture Ministry gives aid to TRIFED for compensation loss incurred due to price fluctuations.

    8.    NAFED was established in co-operative sector at which of the following levels?
    a.    At national level
    b.    At state level
    c.    Specially for the farmers of tribal region of the country
    d.    Specially for the farmers of drought region of the country

    Answer: a

    Explanation:


    NAFED (National Agricultural Co-operative Marketing Federation of India Ltd.) has been established in co-operative sector at national level for marketing of agriculture products.

    National Agricultural Cooperative Marketing Federation of India Ltd.(NAFED) was established on the auspicious day of Gandhi Jayanti on 2nd October 1958. Nafed is registered under the Multi State Co-operative Societies Act. Nafed was setup with the object to promote Co-operative marketing of Agricultural Produce to benefit the farmers. Agricultural farmers are the main members of Nafed, who have the authority to say in the form of members of the General Body in the working of Nafed.

    9.    Consider the following statements regarding the Commodity Future Market in India:
    I.    The commodity futures market facilitates the price discovery process and provides a platform for price risk management in commodities.
    II.    Currently, 113 commodities are notified for futures trading of which 50 are actively traded in five national and 16 commodity specific exchanges.

    Which of the following statement(s) is/are correct?
    a.    Only I
    b.    Only II
    c.    Both I and II
    d.    Neither I nor II

    Answer: c

    Explanation:

    The commodity futures market facilitates the price discovery process and provides a platform for price risk management in commodities. Currently, 113 commodities are notified for futures trading of which 50 are actively traded in five national and 16 commodity specific exchanges. Agricultural commodities, bullion, energy, and base metal products account for a large share of the commodities traded in the commodity futures market. The total value of trade in the commodity futures market rose significantly in 2011 compared to that of the previous year due to increased awareness, the advent of new commodity exchanges, increase in global commodity prices, and improved regulation.

    Currently 6 national exchanges, viz. Multi Commodity Exchange, Mumbai (MCX), National Commodity and Derivatives Exchange, Mumbai (NCDEX), National Multi Commodity Exchange, Ahmedabad (NMCE), Indian Commodity Exchange Ltd., Mumbai (ICEX), ACE Derivatives and Commodity Exchange, Mumbai (ACE) and Universal Commodity Exchange Ltd., Navi Mumbai (UCX), regulate forward trading in 113 commodities. Besides, there are 11 Commodity specific exchanges recognized for regulating trading in various commodities approved by the Commission under the Forward Contracts (Regulation) Act, 1952.

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