UPHESC Assistant Professor Agricultural Economics 2025 PYQs

Concept: Farm liabilities by repayment period: short-term (≤ 1–1.5 years), intermediate/medium (1.5–5 years), long-term (> 5 years).

1. Crop loan — short-term, repaid after harvest.
2. Livestock (dairy animals, bullocks), machinery, pumpsets — intermediate loans.
3. Orchard establishment and land development (levelling, wells) — long-term.

Short trick: Season ⇒ short, animals/machines ⇒ medium, land/orchard ⇒ long.

Concept: In farm financial analysis the current liability ratio compares short-term debt with the farmer's own funds.

1. Current liability ratio = current liabilities ÷ owner's equity (net worth).
2. (A) is the current ratio (liquidity); (C) is the debt ratio (inverse of the net capital ratio).
3. A high value shows heavy dependence on short-term credit.

Short trick: Current ratio = CA/CL; current liability ratio = CL/owner's equity.

Concept: PERT (Program Evaluation and Review Technique) was developed in 1958 by the US Navy Special Projects Office with Booz Allen Hamilton and Lockheed for the Polaris missile programme.

1. It uses three time estimates: $t_e=\frac{t_o+4t_m+t_p}{6}$.
2. CPM was developed in 1957 by DuPont and Remington Rand — don't mix the two dates.

Short trick: CPM 1957 (DuPont), PERT 1958 (Polaris).

Concept: Evaluation timing: ex-ante (before, appraisal), concurrent/mid-course (during, monitoring), ex-post (after completion).

1. Overall impact (outcomes on income, production, welfare) can be judged only after the project is completed and its effects have appeared.
2. Hence ex-post (impact) evaluation.

Short trick: Ex-ante = will it work? Ex-post = did it work?

Concept: Undiscounted measures ignore the time value of money; discounted measures use present values.

1. Undiscounted: payback period, accounting rate of return, ranking by inspection.
2. Discounted: NPW (NPV), BCR, IRR, (discounted payback).
3. So the payback period is the undiscounted method.

Short trick: Payback = years to recover cost, no discounting.

Concept: The Differential Rate of Interest (DRI/DIR) scheme, 1972, gives bank loans to the weakest sections at a concessional rate.

1. Interest rate: 4% per annum.
2. Beneficiaries: small/marginal farmers, landless labourers, artisans and others below a low income limit.
3. Banks had to lend at least 1% of total advances under DRI.

Short trick: DRI 1972 → 4% interest, 1% of advances.

Concept: Marketable surplus = production − (family consumption, seed, feed, wages in kind, wastage); marketed surplus = quantity actually sold.

1. For storable produce the two differ: the farmer may hold stock, sell in distress or buy back.
2. Highly perishable products like milk cannot be stored on the farm, so whatever is surplus is sold at once.
3. Hence marketable surplus = marketed surplus for milk (perishables).

Short trick: Perishable ⇒ no holding ⇒ MS = marketed surplus.

Concept: Hedging is taking an equal and opposite position in the futures market to offset price risk in the physical (spot) market.

1. A trader holding stock sells futures; if prices fall, the gain on futures offsets the loss on stock.
2. Futures trading is only the market/instrument; speculation means deliberately taking on price risk for profit.
3. So the protective technique is hedging.

Short trick: Hedger transfers risk; speculator accepts it.

Concept: Nature of product distinguishes market forms.

1. Perfect competition — homogeneous product (4).
2. Monopolistic competition — differentiated product (1).
3. Oligopoly — homogeneous (pure oligopoly, e.g. steel) or differentiated (e.g. cars) (3).
4. Monopoly — unique product with no close substitute (2). Code 4, 1, 3, 2 = (B).

Short trick: Perfect–same, Monopolistic–different, Oligopoly–either, Monopoly–unique.

Concept: The 2020 amendment allowed stock limits on cereals, pulses, oilseeds, edible oils, onion and potato only on a steep price rise.

1. Trigger: 100% rise in retail price of horticultural produce, or 50% rise for non-perishable agricultural foodstuffs.
2. The rise is measured over the price prevailing immediately preceding twelve months or the average retail price of the last five years, whichever is lower.
3. (The farm laws of 2020 were later repealed in 2021.)

Short trick: Base = lower of (12-month price, 5-year average retail price).

Concept: In a push supply chain, goods are produced on long-term forecasts and pushed through the channel to retailers.

1. Large, planned production and shipment runs give economies of scale in manufacturing, transport and warehousing — the aim is low distribution cost.
2. Product development cost is not what push targets; quality/responsiveness to customers is the strength of the pull (demand-driven) approach.
3. Trade-off: push risks excess inventory if forecasts fail.

Short trick: Push = forecast + scale ⇒ cheaper distribution; Pull = actual demand ⇒ responsiveness.

Concept: Marketing mix (Borden; McCarthy's 4 Ps) is the combination of Product, Price, Promotion and Place (distribution) a firm uses to reach its market.

1. Segmentation divides buyers into groups.
2. Market conduct and performance are parts of the Structure–Conduct–Performance framework of market analysis.
3. Combining pricing, promotion and distribution = marketing mix.

Short trick: 4 Ps: Product, Price, Promotion, Place.

Concept: e-NAM (National Agriculture Market) is a pan-India electronic trading portal linking APMC mandis.

1. Launched on 14 April 2016 with 21 mandis in 8 states.
2. Implemented by SFAC under the Ministry of Agriculture & Farmers Welfare.
3. Aim: ‘One Nation, One Market’ — transparent online price discovery.

Short trick: e-NAM: 14 April 2016 (Ambedkar Jayanti).

Concept: The non-negativity restriction says the decision variables (activity levels) cannot be negative: $x_j\ge 0$.

1. A farmer cannot grow −2 ha of wheat.
2. It says nothing about coefficients in the objective function or constraints — they may be negative (e.g. costs).
3. Resource availability (RHS) is a separate matter; the assumption is about activities, so none of (A)–(C) states it.

Short trick: Non-negativity = $x_j\ge 0$ for activities.

Concept: Coefficient of alienation $k=\sqrt{1-r^2}$ — the part of association not explained by correlation.

1. $r^2=0.64$ (coefficient of determination).
2. $1-r^2=0.36$ (coefficient of non-determination).
3. $k=\sqrt{0.36}=0.60$.

Short trick: r² = determination, 1 − r² = non-determination, √(1 − r²) = alienation.

Concept: Specification errors: omitting relevant variables, including irrelevant ones, or choosing the wrong functional form.

1. Omitted variables bias the coefficients and standard errors, so t-tests may wrongly reject a true null (Type I) or fail to reject a false one (Type II).
2. Adding irrelevant, inter-correlated regressors creates multicollinearity and inflates variances.
3. Hence all the listed problems can follow.

Short trick: Wrong model ⇒ biased/inefficient estimates ⇒ wrong inferences of every kind.

Concept: Match each test with the problem it detects.

1. Farrar–Glauber (1967) — multicollinearity (chi-square, F and t tests on the correlation matrix).
2. Breusch–Godfrey — autocorrelation (higher-order serial correlation).
3. Glejser and White — heteroscedasticity.
4. Other multicollinearity checks: VIF, condition index, Klein's rule.

Short trick: FG = multicollinearity; BG = autocorrelation; Glejser/White = heteroscedasticity.

Concept: Shadow (accounting) prices reflect the true opportunity cost to society when market prices are distorted.

1. Used in social cost–benefit analysis of projects (Little–Mirrlees, UNIDO guidelines, Squire–van der Tak).
2. E.g. shadow wage of surplus rural labour below the market wage; shadow exchange rate for foreign exchange.
3. In LP the dual values (shadow prices) show the value of an extra unit of a scarce resource.

Short trick: Shadow price = social opportunity cost ⇒ project appraisal.

Concept: $Z_j-C_j$ is the net loss in the objective from bringing one unit of activity j into the solution.

1. In maximization, a negative $Z_j-C_j$ means that activity would raise profit — the solution can still be improved (it becomes the entering variable).
2. Optimality is reached when all $Z_j-C_j\ge 0$ (positive or zero).
3. For minimization the rule reverses: all $Z_j-C_j\le 0$.

Short trick: Max: stop when no negative $Z_j-C_j$ remains.

Concept: The regression coefficient $b_{yx}=\frac{\text{cov}(x,y)}{{\sigma }_x^2}$ is the change in y per unit change in x and depends on units of measurement.

1. It is not bounded — it can take any value from −∞ to +∞.
2. Only the correlation coefficient r is bounded between −1 and +1.
3. Link: $r=\pm \sqrt{b_{yx}{b}_{xy}}$, so both b's cannot exceed 1 together, but one can.

Short trick: r bounded (−1, +1); b unbounded.