State agricultural university MBA (ABM) admission · India · State agricultural universities via ICAR AIEEA-PG Group 19
Original practice questions written to the published syllabus · not past papersHow farm produce moves from field to consumer, who takes what share, how markets are regulated and how prices behave over seasons and places.
In the exams: agricultural master's entrance examinations, agricultural economics and agribusiness (heavy); agricultural economics PhD entrance and fellowship examinations, marketing and prices (heavy); agricultural scientist eligibility tests (heavy); agricultural development bank officer recruitment and agricultural field officer recruitment in banking (present)
How our questions for State agricultural university MBA admission spread across the units of Agricultural Marketing & Price Analysis. Difficulty: 21 easy, 43 medium, 2 hard.
| Seasonal and spatial price variation | 9 | |
| Price commissions and parastatal marketing agencies | 5 | |
| Agricultural exports | 5 | |
| Marketing channels and price spread | 4 | |
| Regulated markets and marketing boards | 4 | |
| Cooperative marketing | 4 | |
| Agricultural price policy | 4 | |
| IT in agricultural marketing and electronic trading platforms | 4 | |
| Classification of markets | 3 | |
| Marketable and marketed surplus | 3 | |
| Marketing functions | 3 | |
| Structure-conduct-performance paradigm | 3 | |
| Commodity-wise marketing: grains, pulses, fruits and vegetables, livestock | 3 | |
| Processing, storage and warehousing | 3 | |
| Marketing in a developing economy | 2 | |
| Marketing institutions | 2 | |
| Marketing efficiency | 2 | |
| Marketing finance | 2 | |
| Buffer stocks and price stabilisation | 1 |
Choose an answer, then open the working. Each explanation says why the right answer is right and why the others are not.
A farmer harvests 6,000 kg of wheat. Family consumption needs 1,200 kg, seed 300 kg, cattle feed 200 kg, payments in kind to labour 400 kg and wastage 100 kg. What is the marketable surplus?
D. 3,800 kg
Marketable surplus = production - all retentions = 60 - (12+3+2+4+1) = 60 - 22 = 3,800 kg. Subtracting only family consumption (4,800 kg) ignores seed, feed, payments in kind and wastage. 4,500 kg subtracts only family consumption and seed.
Further reading: Acharya and Agarwal, Agricultural Marketing in India
A farmer receives 1800 currency units per 100 kg for a product for which consumers pay the equivalent of 2400 currency units per 100 kg. What is the producer's share in the consumer's money?
A. 75%
Producer's share = farmer's price / consumer price x 100 = 1800/2400 x 100 = 75%. 25% is the share of the price spread, and 33.3% wrongly expresses the spread as a percentage of the farm price. 133.3% inverts the ratio (2400/1800).
Further reading: Acharya and Agarwal, Agricultural Marketing in India
Which products are least often covered by procurement-backed government support prices, mainly because they cannot be stored?
C. Fresh fruit and leafy vegetables
A purchase-based floor needs the agency to store what it buys, so storable grains and fibres are the usual candidates. Fresh fruit and leafy vegetables spoil quickly, so governments rely on other tools, such as market intervention or payments, for them.
In the widely taught A1 to C3 cost-of-cultivation ladder, cost A2 equals:
C. Cost A1 plus rent on leased-in land
A2 = A1 + rent paid for leased-in land. Adding family labour to A2 gives A2+FL; B1 plus rental value of owned land is part of B2; C2* plus 10% is C3.
Further reading: CACP cost concepts
Where an expert price commission recommends support prices, the final decision is usually taken by:
D. The government, which is free to accept or modify it
Price commissions are advisory; the cabinet or agriculture ministry announces the prices, as with the price commissions of South Asia. Central banks and market committees have no role in setting them.
Which feature most often explains the success of dairy cooperatives in countries such as the Netherlands, New Zealand and India?
C. Control of value-adding processing
Successful dairy cooperatives control processing that adds value and pay members promptly and fairly, which secures loyalty. Price fixing and bans on competitors are not the source of their success.
A marketing cooperative distributes a surplus of 500,000 currency units as patronage refund in proportion to quantity delivered. A member delivered 40,000 kg out of total deliveries of 2,000,000 kg. What is his refund?
A. 10,000 currency units
Refund = surplus x member's share of deliveries = 500,000 x 400/20,000 = 10,000 currency units. 25 currency units is the refund per 100 kg, not the member's total. 100,000 currency units reads the member's 2 per cent share as 20 per cent; 1,250 currency units divides the surplus by the member's 40,000 kg.
Which is an institutional source of marketing finance?
B. Pledge loans by a commercial bank against produce in a registered warehouse
Commercial, cooperative and regional rural banks are institutional sources. Commission agents, moneylenders and dealers are non-institutional.
The January price is 2310 currency units per 100 kg and its 12-month centred moving average is 2100 currency units per 100 kg. What is the ratio-to-moving-average for January?
D. 110
Ratio = actual / centred MA x 100 = 2310/2100 x 100 = 110. Inverting gives 90.9; 10 is the percentage deviation, not the index. 210 is the absolute difference (2310 - 2100), not a ratio.
Maize sells at 1800 currency units per 100 kg in market A and 2050 currency units per 100 kg in market B. Transport and handling from A to B cost 180 currency units per 100 kg. What should competitive traders do?
B. Ship maize from A to B, earning 70 currency units per 100 kg until the gap narrows to 180 currency units
The gap 2050-1800 = 250 exceeds transfer cost 180, so buying in A and selling in B earns 70 per 100 kg. Arbitrage raises A's price and lowers B's until the gap equals transfer cost. Ignoring transfer cost overstates profit, and shipping from the high-price market loses money.
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