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ICAR AIEEA-PG Cooperatives & Farmer Producer Organisations: practice questions

ICAR AIEEA-PG (Master's admission and PG scholarship) · India · National Testing Agency for ICAR

Original practice questions written to the published syllabus · not past papers
10worked here, free
52written to this exam in this subject
11syllabus units

What this subject covers

Farmer-owned businesses: cooperative principles and history, how cooperatives and producer companies are governed and managed, and the public programmes that promote producer organisations.

In the exams: agricultural master's entrance examinations, cooperation (heavy); agricultural economics PhD entrance and fellowship examinations (heavy); agribusiness management PhD entrance and fellowship examinations, producer organisations (present); agricultural development bank officer recruitment (heavy)

Where the 52 questions fall

How our questions for ICAR AIEEA-PG spread across the units of Cooperatives & Farmer Producer Organisations. Difficulty: 20 easy, 32 medium, 0 hard.

Principles of cooperation9
Credit and non-credit cooperatives7
The cooperative movement and the state6
National cooperative federations5
Formation of producer organisations and producer companies5
Collective farming5
Board and professional management of cooperatives4
Governance of producer organisations4
Revitalisation and reform of cooperatives3
Single-window input supply and output marketing3
Public programmes to promote producer organisations: membership, management cost support, equity grants and credit guarantees1

10 practice questions, worked

Choose an answer, then open the working. Each explanation says why the right answer is right and why the others are not.

1 · Principles of cooperation · easy

The Rochdale Society of Equitable Pioneers, founded in 1844, was primarily a:

  1. Rural credit society of farmers
  2. Workers' production cooperative in textiles
  3. Dairy marketing cooperative
  4. Consumer cooperative store
Answer and working

D. Consumer cooperative store

The 28 Rochdale pioneers opened a consumer store in Toad Lane and paid a dividend on purchases. Rural credit cooperation came from Raiffeisen in Germany; the pioneers were weavers by trade, which makes the textile-production option tempting, but their society was a store.

2 · The cooperative movement and the state · medium

Brazil's 1988 Constitution says that creating a cooperative needs no government authorisation and that the state may not interfere in its functioning. Which ICA principle does this most directly protect?

  1. Member economic participation
  2. Autonomy and independence
  3. Concern for community
  4. Voluntary and open membership
Answer and working

B. Autonomy and independence

Freedom from state authorisation and interference is the core of the fourth principle, autonomy and independence. Economic participation concerns capital and surplus, open membership concerns who may join, and concern for community concerns sustainable development.

3 · Credit and non-credit cooperatives · easy

Early Danish cooperative dairies (from 1882) gave each member one vote regardless of herd size and required members to deliver all their milk. What was the main purpose of the delivery obligation?

  1. To guarantee the volume needed to finance and run the plant
  2. To let the largest farmers control the board through extra votes
  3. To stop members from keeping any milk for their own households
  4. To qualify the dairy for state ownership after ten years of trading
Answer and working

A. To guarantee the volume needed to finance and run the plant

Binding delivery contracts secured supply so the dairy could borrow and invest in processing. Votes stayed equal regardless of herd size, and the obligation had nothing to do with household milk or state ownership.

4 · Board and professional management of cooperatives · easy

In a cooperative society, the supreme authority is:

  1. The chief executive
  2. The Registrar of Cooperative Societies
  3. The general body
  4. The board of directors
Answer and working

C. The general body

The general body adopts bye-laws, elects the board, approves accounts and decides surplus distribution. The board is elected by and accountable to it; the Registrar is a regulator, not an organ of the society. The general body is the assembly of all members.

5 · Board and professional management of cooperatives · medium

The 'officialisation' of cooperatives, as the term is used in the reform literature on South Asia and Africa, refers to:

  1. Growing control of cooperatives by government nominees and officials after state partnership
  2. Registration of cooperatives with the companies registrar so they come under official company law
  3. Transfer of cooperatives to direct ownership by the national ministry
  4. Adoption of the ICA principles in official documents
Answer and working

A. Growing control of cooperatives by government nominees and officials after state partnership

State partnership in share capital brought officials and nominees onto boards and increased Registrar powers, undermining autonomy. That is the sense of officialisation in the reform literature.

6 · Revitalisation and reform of cooperatives · medium

Some countries have passed a 'parallel' liberal cooperative law beside the old one, so that certain societies can be largely self-regulating. What is the main condition for using it?

  1. The society must first merge with its district federation
  2. The society gives up government equity and its controls
  3. The society must convert into a company with tradable shares
  4. The society must restrict its membership to landowning farmers
Answer and working

B. The society gives up government equity and its controls

The trade is autonomy for self-reliance: societies that take no state equity escape the registrar's control over boards and business. The mutually aided cooperative laws passed in parts of South Asia from 1995 are the best-known example. No merger, conversion or landholding rule is involved.

7 · Single-window input supply and output marketing · medium

The main advantage of pooling for members is that it:

  1. Allows members to choose the day on which their produce is sold, capturing the season's peak price
  2. Removes all marketing costs
  3. Spreads price risk so each member gets the season's average net price for his grade
  4. Guarantees payment of the full price on the day of delivery
Answer and working

C. Spreads price risk so each member gets the season's average net price for his grade

Pooling averages prices over the season across members. It usually delays final payment (hence advances), does not remove costs, and takes the timing decision from the individual member.

8 · Formation of producer organisations and producer companies · medium

Several countries have created hybrid legal forms for farmer businesses. Which description fits a producer company?

  1. A cooperative society under state cooperative law with unlimited member liability
  2. A listed company in which farmers hold a minority of the tradable shares
  3. A company owned only by producers, with limited return on capital and patronage bonus
  4. A government corporation that buys produce from registered farmers
Answer and working

C. A company owned only by producers, with limited return on capital and patronage bonus

The producer company, introduced in Indian company law in 2002, keeps cooperative features (producer-only membership, democratic voting, limited return on capital, patronage bonus) inside company law. Its shares cannot be listed, and it is neither a state body nor a cooperative society with unlimited liability.

9 · Governance of producer organisations · easy

Why do cooperative and producer-organisation laws often set both a minimum and a maximum board size?

  1. So that every village represented has exactly one director
  2. So that the government can fill any vacant seats directly
  3. So that shareholders with the most capital hold most seats
  4. A minimum ensures oversight; a maximum keeps it workable
Answer and working

D. A minimum ensures oversight; a maximum keeps it workable

Too few directors concentrates power; too many makes decisions slow and diffuse. Ranges from a handful to about twenty are common (one producer company law sets five to fifteen). Seat allocation by village or capital, or filling by government, is not the reason.

10 · Collective farming · medium

In a cooperative collective farming society, the surplus is distributed mainly in proportion to:

  1. Shares held by each member
  2. Crop delivered by each member's own field
  3. Labour contributed
  4. Land each member contributed
Answer and working

C. Labour contributed

In collective farming the society holds the land and members are paid by labour; surplus follows wages. Return on land contributed marks joint farming.

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Read the subject

Cooperatives & Farmer Producer OrganisationsThe full study manual, free ICAR AIEEA-PGFormat, sections and how it has changed

More ICAR AIEEA-PG practice

Agriculture & Food Systems (bridge)International Agri Trade & Export ManagementAgribusiness Law & EthicsBusiness Statistics & Quantitative MethodsFarm ManagementBusiness CommunicationAgricultural Marketing & Price AnalysisMicroeconomic Theory & ApplicationsAgricultural Production EconomicsFood Processing & Technology ManagementComputer Applications & MISManagerial (Applied Agribusiness) EconomicsAgricultural Extension Management & CommunicationMacroeconomics & PolicyAgribusiness Environment & PolicyRural Society, Polity & InstitutionsProject Management, Appraisal & Agri-EntrepreneurshipMarketing ManagementAgri Infrastructure & WarehousingRural Development, Local Governance & LivelihoodsResearch MethodologyAgri Risk Management & InsuranceRural MarketingManagement of Agricultural Input Marketing

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