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Preliminary exam CSAT May 13,2024

1. Read the following passage and answer the items that follow each passage. Your answers to
these items should be based on the passages only. 

Passage 
A number of empirical studies find that farmers are risk-averse, though only moderately in many
cases. There is also evidence to show that farmers'' risk aversion results in cropping patterns and
input use designed to reduce risk rather than to maximize income. Farmers adopt a number of
strategies to manage and cope with agricultural risks. These include practices like crop and field
diversification, non-farm employment, storage of stocks and strategic migration of family members.
There are also institutions ranging from share tenancy to kinship, extended family and informal
credit agencies. One major obstacle to risk sharing by farmers is that the same type of risks can
affect a large number of farmers in the region. Empirical studies show that the traditional methods
are not adequate. Hence there is a need for policy interventions, especially measures that cut across
geographical regions.
Policies may aim at tackling agricultural risks directly or indirectly. Examples of risk-specific policies
arc crop insurance, price stabilization and the development of varieties resistant to pests and
diseases. Policies which affect risk indirectly are irrigation, subsidized credit and access to
information. No single risk-specific policy is sufficient to reduce risk and is without side-effects,
whereas policies not specific to risk influence the general situation and affect risks only indirectly.
Crop insurance, as a policy measure to tackle agricultural risk directly, deserves careful consideration
in the Indian context and in many other developing countries because the majority of farmers
depend on rain-fed agriculture and in many areas yield variability is the predominant cause of their
income instability.

 The need for policy intervention to mitigate risks in agriculture is because
a) farmers are extremely risk-averse.
b) farmers do not know how to mitigate risks.
c) the methods adopted by farmers and existing risk sharing institutions are not adequate.
d) majority of farmers depend on rain-fed agriculture.



General Studies

Political Science and International Relations

Sociology

Some Reference Essays

List of previous year essay topics (1997-2019)

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