Agricultural Economy MCQs for UPSC Prelims

86 practice questions on Agricultural Economy from the Economy section of the UPSC Prelims syllabus. 86 come with a written explanation and 43 are actual previous year questions. Try the sample set below - the answer stays hidden until you ask for it.

13 Easy 57 Medium 16 Hard 43 from past papers

Sample questions

Q1
Previous year question easy

Among the following, which one is the largest exporter of rice in the world in the last five years?

  1. A China
  2. B India
  3. C Myanmar
  4. D Vietnam
Show answer and explanation

Correct answer: B - India

India has consistently been the largest rice exporter in the world in the years preceding 2019, having overtaken Thailand, helped by large surpluses of both basmati and non-basmati rice. China, despite being the largest producer of rice, is a net importer because of its enormous domestic consumption. Vietnam and Myanmar are notable exporters but their volumes are far below India's annual exports.

Q2
Previous year question medium

Consider the following statements : Statement I : Of the two major ethanol producers in the world, i.e., Brazil and the United States of America, the former produces more ethanol than the latter. Statement II : Unlike in the United States of America where corn is the principal feedstock for ethanol production, sugarcane is the principal feedstock for ethanol production in Brazil. Which one of the following is correct in respect of the above statements?

  1. A Both Statement I and Statement II are correct and Statement II explains Statement I
  2. B Both Statement I and Statement II are correct but Statement II does not explain Statement I
  3. C Statement I is correct but Statement II is not correct
  4. D Statement I is not correct but Statement II is correct
Show answer and explanation

Correct answer: D - Statement I is not correct but Statement II is correct

The United States is the world's largest ethanol producer, ahead of Brazil, so statement I, which claims Brazil produces more, is incorrect. Statement II is correct because the US relies mainly on corn while Brazil uses sugarcane as its principal feedstock. Therefore statement I is wrong while statement II is right.

Q3
Previous year question hard

The economic cost of food grains to the Food Corporation of India is Minimum Support Price and bonus (if any) paid to the farmers plus

  1. A transportation cost only
  2. B interest cost only
  3. C procurement incidentals and distribution cost
  4. D procurement incidentals and charges for godowns
Show answer and explanation

Correct answer: C - procurement incidentals and distribution cost

The economic cost of foodgrains to the FCI has three broad components: the MSP plus any bonus (the pooled procurement cost), the procurement incidentals (such as mandi charges, commission, gunny bags and freight up to the depot), and the distribution cost (handling, storage and freight to the fair price shops). So the missing element added to MSP-plus-bonus is procurement incidentals and distribution cost. The options listing only transportation, only interest, or incidentals with godown charges are incomplete and therefore wrong.

Q4
Previous year question medium

Consider the following statements: 1. In the case of all cereals, pulses and oil-seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India. 2. In the case of cereals and pulses, the MSP is fixed in any State/UT at a level to which the market price will never rise. Which of the statements given above is/are correct?

  1. A 1 only
  2. B 2 only
  3. C Both 1 and 2
  4. D Neither 1 nor 2
Show answer and explanation

Correct answer: D - Neither 1 nor 2

Statement 1 is wrong because MSP procurement is not unlimited for all crops; open-ended procurement applies mainly to wheat and rice through the FCI, while pulses and oilseeds are procured in limited, scheme-bound quantities under PSS. Statement 2 is wrong because the MSP is a floor price meant to protect farmers when market prices fall, and market prices frequently rise well above the MSP for many crops. Since both statements misstate how MSP works, neither is correct.

Q5
Previous year question medium

India has experienced persistent and high food inflation in the recent past. What could be the reasons? 1. Due to a gradual switchover to the cultivation of commercial crops, the area under the cultivation of food grains has steadily decreased in the last five years by about 30%. 2. As a consequence of increasing incomes, the consumption patterns of the people have undergone a significant change. 3. The food supply chain has structural constraints. Which of the statements given above are correct?

  1. A 1 and 2 only
  2. B 2 and 3 only
  3. C 1 and 3 only
  4. D 1, 2 and 3
Show answer and explanation

Correct answer: B - 2 and 3 only

Rising incomes shifted demand towards protein-rich foods like pulses, milk, eggs and vegetables faster than supply could grow, pushing prices up, so statement 2 is correct. Inadequate storage, weak cold chains and too many intermediaries are genuine structural constraints that raise food prices, so statement 3 is correct. Statement 1 is factually false: the area under foodgrains did not fall by anything like 30% over five years; such a drastic, exact figure is an exaggeration that did not occur. Hence only 2 and 3 are correct.

Q6
Previous year question medium

With reference to land reforms in independent India, which one of the following statements is correct?

  1. A The ceiling laws were aimed at family holdings and not individual holdings.
  2. B The major aim of land reforms was providing agricultural land to all the landless.
  3. C It resulted in cultivation of cash crops as a predominant form of cultivation.
  4. D Land reforms permitted no exemptions to the ceiling limits.
Show answer and explanation

Correct answer: B - The major aim of land reforms was providing agricultural land to all the landless.

The official UPSC key marks option (b): the central thrust of land reforms, through abolition of intermediaries, tenancy reform, ceilings and redistribution of surplus land, was to give land to the landless tiller. Option (a) fails because the unit for ceiling laws varied across states, applying to individual landholders in states like Andhra Pradesh, Bihar and Punjab and to families in others, so they were not aimed exclusively at family holdings. Option (c) is wrong since the spread of cash crops came from commercialization of agriculture, not from land reform legislation. Option (d) is wrong because plantations of tea and coffee, cooperative farms, religious and charitable institutions and similar categories were explicitly exempted from ceiling limits. Some early coaching keys had favoured (a), but the official key settled the question in favour of (b).

Q7
Previous year question medium

Consider the following statements : 1. The Standard Mark of Bureau of Indian Standards (BIS) is mandatory for automotive tyres and tubes. 2. AGMARK is a quality Certification Mark issued by the Food and Agriculture Organisation (FAO). Which of the statements given above is/are correct?

  1. A 1 only
  2. B 2 only
  3. C Both 1 and 2
  4. D Neither 1 nor 2
Show answer and explanation

Correct answer: A - 1 only

BIS certification (the ISI mark) is mandatory for automotive tyres and tubes for safety reasons, so statement 1 is correct. AGMARK is issued by the Directorate of Marketing and Inspection under the Ministry of Agriculture, not by the FAO, so statement 2 is wrong. Hence only statement 1 is correct.

Q8
Previous year question easy

What is/are the advantage/advantages of implementing the 'National Agriculture Market' scheme? 1. It is a pan-India electronic trading portal for agricultural commodities. 2. It provides the farmers access to nationwide market, with prices commensurate with the quality of their produce. Select the correct answer using the code given below :

  1. A 1 only
  2. B 2 only
  3. C Both 1 and 2
  4. D Neither 1 nor 2
Show answer and explanation

Correct answer: C - Both 1 and 2

The National Agriculture Market (e-NAM) is a pan-India electronic trading portal for agricultural commodities (statement 1) that gives farmers access to a wider market with prices reflecting the quality of their produce (statement 2). Both statements correctly describe its advantages. Hence both 1 and 2 are correct.

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More Economy topics

Money, Banking & RBI 117 External Sector & Trade 106 Balance of Payments & Forex 85 Fiscal Policy & Budget 85 Monetary Policy 82 Financial Markets & Institutions 81 Taxation & GST 73 Inflation & Prices 73 National Income & Growth 73 Poverty, Employment & Inclusive Growth 71 Capital Markets & Investment 70 International Economic Organisations 65 Banking Reforms & NPAs 62 Government Schemes & Policies 62 Industry & Infrastructure 55 Planning & NITI Aayog 38