ICAR AICE-JRF/SRF (PhD admission and fellowship) · India · National Testing Agency for ICAR
Original practice questions written to the published syllabus · not past papersMaking the best use of land, labour, capital and machinery on a farm: measuring efficiency, costing, planning and budgeting, and keeping records.
In the exams: agricultural master's entrance examinations, agricultural economics (heavy); agricultural economics PhD entrance and fellowship examinations, farm management (heavy); cost analysis in agricultural field officer recruitment in banking (present); agricultural scientist eligibility tests (present)
How our questions for ICAR AICE-JRF/SRF spread across the units of Farm Management. Difficulty: 3 easy, 18 medium, 20 hard.
| Decision-making under certainty, risk and uncertainty | 8 | |
| Linear programming in farm planning | 8 | |
| Measures of farm efficiency | 5 | |
| Management of land, labour, capital and machinery | 3 | |
| Definition and scope of farm management | 2 | |
| Cost concepts in farm management | 2 | |
| Valuation of farm assets and liabilities | 2 | |
| Partial budgeting | 2 | |
| Whole-farm planning and budgeting | 2 | |
| Farm cost accounting | 2 | |
| Farming systems and the systems approach | 2 | |
| Enterprise budgeting | 1 | |
| Farm records and accounts | 1 | |
| Farm inventory | 1 |
Choose an answer, then open the working. Each explanation says why the right answer is right and why the others are not.
Which statement correctly contrasts stochastic frontier analysis (SFA) with data envelopment analysis (DEA) in measuring farm efficiency?
A. SFA separates noise from inefficiency but needs a functional form; DEA needs none but treats all deviation as inefficiency
SFA (Aigner, Lovell and Schmidt; Meeusen and van den Broeck, 1977) is parametric with a composed error: symmetric noise plus a one-sided inefficiency term, usually estimated by maximum likelihood. DEA (from Charnes, Cooper and Rhodes, 1978) is non-parametric, built by linear programming, and deterministic, so bad weather is recorded as inefficiency. The distractors swap these properties.
Further reading: Coelli et al., An Introduction to Efficiency and Productivity Analysis
A farmer owns land worth far more than all his debts but cannot pay a seed dealer's bill due this week. His position is best described as
B. solvent but illiquid
Solvency compares total assets with total liabilities (net worth positive); liquidity is the ability to meet obligations as they fall due from cash or near-cash assets. Valuable land does not pay a bill this week, so the farm is solvent and illiquid, a common cause of distress sales. Nothing given says anything about profitability.
Further reading: Kay, Edwards and Duffy, Farm Management
A risky crop plan has an expected income of 60,000 currency units. A farmer says he would be equally happy with a sure 52,000 currency units. His risk premium and attitude are
D. 8,000 currency units; risk averse
The certainty equivalent is 52000. Risk premium = EV − CE = 60000 − 52000 = 8000. A positive premium means the farmer gives up expected income to avoid risk: risk aversion. A risk-neutral farmer's CE equals EV (premium 0); a risk-preferring farmer's CE exceeds EV.
Further reading: Hardaker et al., Coping with Risk in Agriculture
A partial budget for buying a new rotavator should enter the machine's cost as
C. its annual depreciation plus interest on the investment
A partial budget is usually on an annual basis, so a capital purchase enters as its annual ownership cost: depreciation plus interest on the capital tied up (plus insurance and housing if relevant). Charging the full price to one year would overstate the cost of the change.
Further reading: Kay, Edwards and Duffy, Farm Management
The shadow price of land in an optimal farm plan is 9,000 currency units per hectare. A neighbour offers to lease a hectare for 11,000 currency units a year. Other things equal, the farmer should
D. decline, because an extra hectare adds only around 9,000 currency units to gross margin
The shadow price is the most an extra unit of the resource is worth in the current plan (within the range where the basis does not change). Paying 11,000 for something worth 9,000 lowers profit. That land is binding explains why the shadow price is positive; it does not justify paying more than it. Zero shadow prices apply to slack resources.
Further reading: Heady and Candler, Linear Programming Methods
For a primal farm LP that maximises gross margin subject to resource limits, the dual problem
D. minimises the total imputed value of the resources, and its optimum equals the primal optimum
The dual of a maximisation is a minimisation over resource values (shadow prices), with one dual constraint per activity requiring imputed cost ≥ gross margin. By the duality theorem, the optimal values are equal. At feasible non-optimal points the dual value exceeds the primal, not the reverse.
Further reading: Heady and Candler, Linear Programming Methods
The usual order of stages in farming systems research (FSR) is
D. diagnosis, design, on-farm testing, extension
FSR first describes the farming system and its constraints (diagnosis), then chooses technologies to address them (design), tests them under farmers' conditions (on-farm testing), and spreads the successful ones (extension/diffusion), with feedback to research.
Further reading: Farming systems research literature
Under expected utility theory, a farmer with a concave utility function of income will
B. prefer a sure income to a risky prospect with the same expected value
A concave utility function means diminishing marginal utility of income, so the utility of the expected value exceeds the expected utility of the gamble (Jensen's inequality): the farmer is risk averse. Choosing by expected value alone describes risk neutrality (linear utility); preferring gambles describes a convex function.
Further reading: Hardaker et al., Coping with Risk in Agriculture
Ten here, 41 in the app. The Laisha app has every practice question we have written to ICAR AICE-JRF/SRF in this subject, marked as you go, with timed papers, a jump-to-unanswered list and a certificate when you pass at 70 per cent.
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