ICAR AICE-JRF/SRF Agribusiness Environment & Policy: practice questions

1 · Role of agriculture in the economy · easy

In Kuznets' classification, agriculture's role as a buyer of fertiliser, tools and consumer goods from industry is its

1. product contribution
2. factor contribution of labour
3. foreign exchange contribution
4. market contribution

2 · Definition and components of agribusiness · medium

Goldberg's 'commodity systems approach' studies

1. only the farm production stage of one crop, ignoring input suppliers, processors and retailers
2. the macroeconomic effects of agricultural taxation on national growth and the government's fiscal balance
3. consumer demand for branded food products only
4. all participants in the chain of one commodity and the institutions that coordinate them

3 · Definition and components of agribusiness · hard

An exporter of fresh grapes wants a single macro-environment factor that is BOTH a threat and outside the firm's control, but that can be monitored in advance through published drafts. Which is the best example?

1. The firm's own cold-store capacity
2. A proposed reduction in an importing country's maximum residue limit for a pesticide
3. The exporter's contract terms with its growers
4. The skill level of the firm's quality team

4 · Structure of agribusiness and linkages among farm supplies, production, processing and marketing · medium

According to transaction cost economics, which condition most strongly pushes a processor to use contracts or vertical integration rather than buying on the spot market?

1. A standardised, storable commodity with many buyers and sellers and a transparent, publicly reported market price
2. Low perishability of the raw material
3. Freely available public market price information
4. High asset specificity, such as a processing line designed for one crop variety of exact quality

5 · Liberalisation, privatisation and globalisation reforms · hard

In a federal country whose constitution gives agriculture and markets to the states or provinces, why does national marketing reform often rely on 'model acts' that each state may adopt?

1. The states hold the power to legislate on agricultural markets, so each must enact the reform itself
2. The WTO forbids central governments from regulating markets, so only states may legislate on agricultural trade
3. Model acts are required by the Agreement on Agriculture
4. The central bank controls agricultural markets

6 · Pricing of outputs · medium

A consumer pays 30 currency units per kg for a vegetable and the farmer received 18 per kg. What is the producer's share in the consumer's price?

1. 40 per cent
2. 167 per cent
3. 60 per cent
4. 12 per cent

7 · Pricing of outputs · hard

Under a nutrient-based subsidy, suppose the subsidy is 40 currency units per kg of nitrogen (N) and 50 per kg of phosphorus as P2O5. A fertiliser contains 18 per cent N and 46 per cent P2O5. What is the subsidy per tonne of the fertiliser?

1. 30,200
2. 90,000
3. 3,020
4. 27,400

8 · Import and export policy · medium

The difference between a WTO member's bound tariff and its lower applied tariff on a product is often called

1. tariff escalation
2. the de minimis margin
3. the special safeguard
4. water, or policy space

9 · Food safety and quality policy · medium

A consumer cannot verify, even after eating it, whether a coffee was grown without synthetic pesticides. In economic terms, 'organic' is a

1. search attribute
2. experience attribute
3. public good
4. credence attribute

10 · Environmental issues in agribusiness · medium

Soil-testing programmes that give each farmer a soil test report with nutrient recommendations address which environmental problem most directly?

1. Stubble burning in the rice-wheat system, by advising farmers on residue incorporation methods
2. Deforestation for oil palm
3. Methane from ruminants
4. Imbalanced fertiliser use, especially overuse of nitrogen relative to phosphorus and potassium