ICAR AICE-JRF/SRF Agri Infrastructure & Warehousing: practice questions

Question 1 · medium

A credit-linked back-ended capital subsidy is best described as:

1. A subsidy on the interest rate, paid to the borrower every month over the whole life of the loan, starting from disbursement
2. A grant usually paid to the borrower before the project starts
3. A subsidy released via the lending bank after the project is completed and verified, usually adjusted against the loan
4. A guarantee that repays the bank if the borrower defaults

Question 2 · hard

An appraiser finds that a subsidised district cold store has operated at 25% average utilisation for three years. Which conclusion is best supported?

1. The district needs more cold storage because demand is clearly high, so a second subsidised store should be sanctioned quickly
2. Utilisation is usually irrelevant once capital has been subsidised
3. Low utilisation proves farmers do not grow perishables
4. Capacity may be in the wrong place or of the wrong type for local produce, so more capacity subsidy alone is unlikely to help

Question 3 · hard

10 tonnes of wheat worth 22,000 currency units per tonne at harvest are stored for 5 months. Carrying costs are: interest at 9% per year on the harvest value, rent 80 per tonne per month, handling 150 per tonne, and a 1% weight loss. What selling price per tonne of the remaining stock just recovers the harvest value plus these costs?

1. 23,611
2. 23,980
3. 22,778
4. 23,375

Question 4 · hard

Which control most effectively prevents the issue of two receipts for the same stock?

1. Issuing receipts only via a central electronic registry linking each to a registered warehouse and lot
2. Printing receipts on thicker, watermarked security paper with the warehouse manager's seal on every copy
3. Raising storage charges
4. Asking depositors to sign twice

Question 5 · medium

Why do lenders value remote sensors (temperature, humidity, CO2) in pledged warehouses, and what can the sensors NOT prove?

1. They replace the need to insure the stock, but cannot detect heating of the grain inside a stack
2. They prove ownership, but not quality
3. They show storage conditions and early spoilage, but cannot prove the stock actually exists
4. They show the market price, but cannot show temperature

Question 6 · hard

A consultant claims that putting warehouse receipts on a distributed ledger will end storage fraud. What is the soundest critique?

1. Fraud cannot occur in agricultural storage
2. Fraud arises mainly from custody of physical goods; a ledger records claims but cannot confirm the goods are there
3. Electronic records are not legally valid for warehouse receipts, so a ledger-based receipt could never be enforced
4. Distributed ledgers cannot store numbers

Question 7 · hard

Which set lists the essential pillars of a credible warehouse receipt system?

1. Only a large number of warehouses
2. A state monopoly on grain trade
3. Receipt law, warehouse licensing with financial safeguards, grades and inspection, a duplicate-proof registry, and fast enforcement
4. Minimum support prices, export subsidies and input subsidies, backed by a state procurement agency buying all surplus grain in every district

Question 8 · hard

Why might a bank set a lower loan-to-value ratio for one commodity than another in warehouse receipt lending?

1. The commodity has a higher minimum support price, so its market value is fully assured to the lender
2. The commodity is grown by more farmers
3. The commodity has more volatile prices, faster deterioration or a thinner resale market
4. The commodity is stored in larger bags

Question 9 · hard

A region reports large total storage capacity but also high storage losses and distress sales in remote areas. Which explanation fits best?

1. Total capacity is too high, so idle warehouses deteriorate and the stock kept in them suffers losses
2. Distress sales are caused by warehouses being registered
3. Storage losses are unrelated to storage infrastructure
4. Capacity is in the wrong places or types, such as CAP or far from producing areas

Question 10 · medium

In a single warehouse receipt system (for example in the United States), how does a borrower pledge stored goods?

1. By registering a mortgage over the borrower's land with the local sub-registrar's office
2. By detaching a warrant and keeping the certificate
3. By handing the one receipt, endorsed where needed, to the lender until repayment
4. By informing the tax authority