ICAR AICE-JRF/SRF (PhD admission and fellowship) · India · National Testing Agency for ICAR
Original practice questions written to the published syllabus · not past papersThe part agriculture plays in economic development, the classic theories of that role, and how price, land, credit, research, trade and subsidy policy are made and judged.
In the exams: agricultural economics PhD entrance and fellowship examinations, agricultural development and policy (heavy); agricultural development bank officer recruitment, economic and social issues (heavy); agricultural scientist eligibility tests, agricultural development and policy (heavy)
ICAR AICE-JRF/SRF (PhD) Agricultural Economics, Unit on economic and agricultural development
Authors and dates of the development theories (Lewis 1954, Fei-Ranis 1961/1964, Jorgenson 1961, Schultz 1964, Mellor 1966/1976, Hayami-Ruttan 1971, Boserup 1965, Harris-Todaro 1970); phases and turning points; induced innovation; CACP cost concepts; WTO boxes and AMS; NPC, ERP, PSE, DRC; FGT poverty measures; household models and CGE at PhD level.
How our questions for ICAR AICE-JRF/SRF spread across the units of Agricultural Development & Policy Analysis. Difficulty: 17 easy, 46 medium, 31 hard.
| Trade and subsidy policy | 9 | |
| Household, multi-market, CGE and programming models (PhD level) | 9 | |
| Lewis and Fei-Ranis models | 8 | |
| Price policy and minimum support prices | 8 | |
| Role of agriculture in economic development | 6 | |
| Schultz and Mellor on agricultural transformation | 6 | |
| Induced innovation | 6 | |
| Land policy | 6 | |
| Research and development policy | 6 | |
| Poverty and inequality | 6 | |
| Water, energy and environment policy | 6 | |
| Food and nutrition security | 5 | |
| The policy process and implementation | 5 | |
| Performance of agriculture across world regions | 4 | |
| Credit policy | 4 |
Choose an answer, then open the working. Each explanation says why the right answer is right and why the others are not.
In the Fei-Ranis model, which statement describes phase two?
D. Marginal product of farm labour is positive but below the institutional wage, so the average surplus per migrant falls and industrial wages must rise
In phase two, each migrant takes away some output, so less food is left per migrant than the institutional wage; food prices rise, the terms of trade turn against industry (in favour of agriculture), and the industrial wage rises. Zero marginal product is phase one; marginal product above the wage is phase three.
Further reading: Fei and Ranis (1964)
A traditional farm sector has 500 workers producing 1,000 units of grain; each is paid the institutional wage equal to the average product. In Fei-Ranis phase one, 100 redundant workers move to industry and output does not change. What total agricultural surplus is now available to feed the migrants?
B. 200 units
Institutional wage = 1,000/500 = 2 units. After migration, the remaining 400 workers consume 400 x 2 = 800 units, leaving 1,000 - 800 = 200 units, i.e. 2 units per migrant, exactly the institutional wage, which is the defining feature of phase one. 800 is what the remaining workers eat, not the surplus. 0 recomputes the wage as the new average product (1,000/400 = 2.5), so the remaining workers eat everything.
Further reading: Fei and Ranis (1964)
According to Schultz, the key to transforming traditional agriculture is
D. supplying new high-payoff modern inputs and investing in farmers' education and skills
Because the return to more traditional inputs is low, Schultz saw transformation coming from new, profitable inputs (improved seed, fertiliser) plus human capital so farmers can use them, largely supplied by public research and extension. He also opposed keeping farm prices artificially low, arguing farmers respond to incentives.
Further reading: Schultz (1964)
Compared with a support price backed by government procurement, a deficiency (price-gap) payment
C. pays farmers the gap between a target price and the market price without the state buying the crop, so consumers face the lower market price
Under a deficiency payment the market price finds its own level and the budget pays the gap, so consumers gain and there are no stocks to hold. Procurement at a support price raises the market price and requires storage and disposal.
Further reading: Timmer, Falcon and Pearson, Food Policy Analysis, 1983
China introduced minimum purchase prices for its two main food grains in
D. rice in 2004, wheat in 2006
China set a minimum purchase price for rice in 2004 and wheat in 2006. 2016 is when maize moved from temporary stockpiling toward market pricing with producer subsidies; 1978 is the start of the Household Responsibility System.
Further reading: Chinese agricultural policy literature
Taiwan's post-war land reform sequence consisted of
A. rent reduction to 37.5% of the main crop, sale of public land, then land-to-the-tiller
Taiwan cut rents to 37.5% (1949), sold public land (1951) and implemented land-to-the-tiller (1953), compensating landlords partly with shares in state enterprises. Collectivisation followed by household contracting describes China; willing-buyer willing-seller describes South Africa and Brazil's market-assisted reforms.
Further reading: Standard land reform literature
Zvi Griliches's pioneering study of the social returns to agricultural research concerned
A. hybrid corn in the United States
Griliches (Journal of Political Economy, 1958) estimated the social return to research on hybrid corn, and his earlier work studied its diffusion. It became the model for later returns-to-research studies.
Further reading: Griliches (1958)
Under the Uruguay Round Agreement on Agriculture, developing countries were to reduce bound agricultural tariffs by an average of
B. 24% over ten years, with at least 10% per tariff line
Developing countries: 24% average, minimum 10% per line, over ten years. 36% with a 15% minimum over six years was the developed-country commitment; 20% and 13.3% are the AMS reduction commitments for developed and developing countries.
Further reading: WTO Agreement on Agriculture
Five people have incomes of 60, 80, 120, 150 and 200, and the poverty line is 100. What is the poverty gap index (FGT with alpha = 1)?
D. 0.12
The poor are 60 and 80 with normalised gaps 0.4 and 0.2. PG = (0.4 + 0.2)/5 = 0.12, dividing by the whole population. 0.30 averages the gaps over the poor only; 0.40 is the headcount ratio (2/5); 0.04 is the squared poverty gap.
Further reading: Foster, Greer and Thorbecke, Econometrica 1984
Robert Bates's Markets and States in Tropical Africa (1981) explained African agricultural policies as
B. governments using marketing boards and overvalued currencies to tax export crops and keep urban food cheap, rewarding supporters with input subsidies
Bates gave a political-economy explanation: policies served urban constituencies and political patronage (selective subsidies) at farmers' expense. It predates the WTO.
Further reading: Bates (1981)
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