Agricultural Policies and Institutional Risks Quiz
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Questions and Answers

How can changes in the level of input and output support, and subsidies impact farming profitability?

  • Fluctuate profitability based on unpredictable factors (correct)
  • Decrease profitability due to increased costs
  • Increase profitability by reducing expenses
  • Have no impact on profitability
  • What is a dimension of institutional risk related to government actions in agricultural commodities?

  • Impeding farmers' ability to benefit from market situations (correct)
  • Encouraging export opportunities
  • Promoting fair competition among farmers
  • Price stabilization
  • Which action does NOT contribute to institutional risk for farmers according to the text?

  • Encouraging commodity exchanges and derivatives trading (correct)
  • Revision of export tariffs
  • Imposing a minimum-export price
  • Restrictions on purchase and movement of agricultural commodities
  • What is a significant risk posed by uncertainties regarding subsidies for inputs like fertilizers, power, and irrigation?

    <p>Inability to plan effectively leading to financial instability</p> Signup and view all the answers

    How do new technologies like genetically modified crops introduce technology risk in agriculture?

    <p>Require high agricultural awareness for proper application</p> Signup and view all the answers

    What information gap adds significant risk to farming practice in India according to the text?

    <p>Limited awareness of market developments and new agricultural technologies</p> Signup and view all the answers

    Exposure to harmful chemicals and micro-organisms in agriculture is classified as:

    <p>Personal risk</p> Signup and view all the answers

    What type of mechanism is government-supported crop insurance considered as?

    <p>Formal</p> Signup and view all the answers

    Which risk does lack of awareness regarding modern agricultural tools like HYV seeds represent?

    <p>Technology risk</p> Signup and view all the answers

    In India, commodity exchanges primarily serve as a:

    <p>Price risk management tool</p> Signup and view all the answers

    Which type of risk can be caused by delayed monsoons in agriculture?

    <p>Production risk</p> Signup and view all the answers

    What kind of impact does exposure to harmful micro-organisms have on farmers?

    <p>Personal risk</p> Signup and view all the answers

    What are the two main classifications of risk management mechanisms mentioned in the text?

    <p>Informal and formal</p> Signup and view all the answers

    Which type of risk management mechanism involves activities before the occurrence of risk according to the text?

    <p>Ex-ante</p> Signup and view all the answers

    What do informal risk management strategies involve?

    <p>Individuals or households</p> Signup and view all the answers

    Which institution is quoted by the World Bank for distinguishing between informal and formal risk management mechanisms?

    <p>2000/2001 World Development Report</p> Signup and view all the answers

    What is the main focus of formal risk management mechanisms?

    <p>Market-based activities</p> Signup and view all the answers

    Which term is used in the text to describe mechanisms implemented after the occurrence of a risk?

    <p>Ex-post</p> Signup and view all the answers

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