ICAR AICE-JRF/SRF Livestock Economics, Marketing & Business Management: practice questions

1 · Cooperatives · hard

In a district where one private processor is the only buyer of milk, a new producer-owned cooperative raises the price farmers receive mainly because it:

1. Receives a legal right to fix the retail price of milk higher than any private dairy in the state
2. Provides countervailing power against the monopsony buyer and returns the processing margin to members
3. Pays no wages to its managers, so its costs of collection and processing fall to near zero
4. Is exempt from food safety law, so it avoids the testing costs that the private buyer must bear on every batch

2 · Livestock credit · hard

A farmer borrows 500,000 currency units at 10 per cent a year for five years and repays equal amounts of principal each year with interest on the outstanding balance. What does the farmer pay in the first year?

1. 131,899 currency units
2. 110,000 currency units
3. 150,000 currency units
4. 100,000 currency units

3 · WTO and the SPS Agreement · medium

An importing country accepts an exporter's meat inspection system, though it differs from its own, because it gives the same level of protection. This applies the SPS principle of:

1. Harmonisation
2. Regionalisation
3. Equivalence
4. Provisional measures

4 · WTO and the SPS Agreement · medium

When the scientific evidence on a new animal health risk is insufficient, the SPS Agreement allows a member to:

1. Ban imports permanently without any risk assessment until the exporter proves the complete safety of the product
2. Apply whatever measure it likes, since the SPS Agreement does not cover emerging diseases
3. Refer the question to the WTO General Council for a vote before any measure is taken at all
4. Adopt a provisional measure on available information and seek more evidence within a reasonable time

5 · Intellectual property rights in livestock · medium

Commercial broiler and layer breeding lines are protected from copying mainly by:

1. Patents on each breed, renewed every twenty years in each of the countries where the commercial birds are sold
2. Trade secrecy over the pure parent lines and sale of crossbred stock that does not breed true
3. Geographical indications that tie each strain to the region where it was first developed
4. Copyright in the pedigree records, which forbids anyone from breeding the birds again

6 · Intellectual property rights in livestock · hard

The genetically modified 'oncomouse' was patented in the United States in 1988. What did the Supreme Court of Canada decide on the corresponding application in 2002?

1. The mouse was patentable because the United States had already granted a patent
2. A higher life form is not patentable subject matter under Canadian patent law
3. The mouse was patentable only if the inventors shared benefits with mouse breeders
4. The application was valid but the patent term was cut to ten years for animals

7 · Intellectual property rights in livestock · hard

A veterinarian develops a new method of treating mastitis in cows by intramammary infusion. In a country that applies the exclusion permitted by TRIPS Article 27.3(a), the method itself is:

1. Patentable, because the exclusion covers methods of treating humans only
2. Not patentable, because methods of treatment of animals are excluded
3. Patentable only as a geographical indication for the region where it was developed
4. Not patentable, because every invention involving animals is excluded under TRIPS Article 33

8 · Project appraisal · hard

A dairy project costs 1,000,000 currency units now and yields net cash flows of 200,000, 300,000, 320,000, 320,000 and 320,000 in years 1 to 5, plus a salvage value of 150,000 at the end of year 5. What is its NPV at a 12 per cent discount rate?

1. 610,000 currency units
2. 30,442 currency units
3. 115,556 currency units
4. 1,115,556 currency units

9 · Project appraisal · easy

The internal rate of return of a livestock project is:

1. The rate of interest charged by the bank on the term loan
2. The discount rate at which the project's NPV equals zero
3. The ratio of net profit to total investment in the first year
4. The discount rate at which the BCR equals two

10 · Project appraisal · hard

A project's NPV is +115,556 currency units at a 12 per cent discount rate and −96,611 at 20 per cent. Estimate the IRR by linear interpolation between these two rates.

1. 15.6 per cent
2. 20.0 per cent
3. 12.0 per cent
4. 16.4 per cent