Agricultural Sector Past Paper PDF

## Chapter 5: Agricultural Sector ### SAQ14. What are the causes of rural indebtedness? **Ans:** The causes of rural indebtedness are as follows: 1. The low level of savings, poverty and crop failures are the primary reasons for indebtedness of farmers. 2. The inheritance of debt from parents. 3....

## Chapter 5: Agricultural Sector ### SAQ14. What are the causes of rural indebtedness? **Ans:** The causes of rural indebtedness are as follows: 1. The low level of savings, poverty and crop failures are the primary reasons for indebtedness of farmers. 2. The inheritance of debt from parents. 3. Borrowing funds to improve the land. 4. Borrowing money for the unproductive activities. 5. The increase in the cultivation cost. 6. Insufficient support prices for the crops. 7. Depending on the non-institutional sources. ### SAQ15. Explain the functions of NABARD. **Ans:** The functions of National Bank for Agricultural and Rural Development NABARD are listed below: 1. NABARD helps in the development of rural infrastructure by providing loans to the Non-Government Organisations (NGOs), state governments and panchayatraj institutions. 2. It refinances the banks to extend loans for investment and production purpose in rural areas. 3. It inspects Regional Rural Banks (RRBs) and co-operative banks except Primary Agricultural Credit Societies (PACS). 4. Through refinance support, it develops the rural non-formal sector such as SSIs, SMEs, cottage and village industries, handicrafts and other rural crafts. 5. NABARD assists in technology transfer through farmers clubs. 6. It increases productivity and profitability of the rain fed agriculture in a sustainable manner by encouraging participatory watershed development. 7. It co-ordinates the activities of all the rural financing institutions who are associated with the development work. 8. It extends the formal banking services to the unreached poor through Self Help Groups (SHGs). 9. It supports the credit innovations of NGOs and other non-formal agencies. 10. It prepares credit plans to recognize the exploitable potentials under agriculture and other activities that are available for development through bank credit. ### SAQ16. Explain the shortcomings of agricultural pricing policy. **Ans:** Some of the short comings of agricultural pricing policy are: 1. The minimum support prices (MSP) fixed by the government are less than the market prices. 2. The procurement policy of government is found to be unsuccessful in providing profitable prices for agro products because that policy is used only when the production is less, due to some weather conditions. 3. Minimum support prices and Public Distribution System are not universal. ### SAQ17. What are the defects of agricultural marketing in India? **Ans:** The following are the defects of agricultural marketing in India: 1. As there is no sufficient transportation facilities, the farmers are compelled to sell the goods to money lenders and commission agents in mandis at unfair prices. 2. The presence of many intermediaries between the farmer and the final consumer lead to gain of money by intermediaries. 3. The farmers are deceived in the mandis by wrong weights and measures. 4. The brokers and traders deceive the farmers. 5. The farmer is forced to pay for several undefined charges, weighing charges, unloading charges, charges for separation of impurities in the produce and for many other miscellaneous charges. 6. Due to absence of appropriate grading system, the farmers could not get fair price. ### SAQ18. State the objectives of agricultural pricing policy. **Ans:** The main objective of agricultural pricing policy in developing economies is to increase the agricultural production. The objectives are as follows: 1. To eliminate price differences between two regions. 2. To make food available to consumers during the time of shortage. 3. To supply raw materials at considerable prices to the industries. 4. To enhance the production and exports of agricultural products. 5. To fulfil the requirements of domestic consumption. 6. To maintain price stability in the agricultural commodities.. 7. To maintain proper relation between the prices of food grains and non-food grains. 8. To reduce the cyclical and seasonal price variations in agricultural products. 9. To assure considerable relation between the prices of agricultural and manufactured products. 10. To assure the utilisation of modern inputs continuously in agriculture. 11. To protect the farmers from being exploited by intermediaries and zamindars, who might buy goods at cheap prices when there is no price policy.