UPSC Prelims 2013 · CSAT

Question 7: Reading Comprehension

Passage beginning “A number of empirical studies find that…” — Passage – 4 · as printed by UPSC

The need for policy intervention to mitigate risks in agriculture is because

afarmers are extremely risk-averse.

bfarmers do not know how to mitigate risks.

cthe methods adopted by farmers and existing risk sharing institutions are not adequate.

dmajority of farmers depend on rain-fed agriculture.

AnswerUPSC’s answer is (c).

The passage reports that farmers already cope with risk through crop and field diversification, non-farm work, stored stocks, migration and informal institutions such as kinship networks. But risk sharing is hard because the same risk hits many farmers of a region together, and studies find these traditional methods inadequate. That inadequacy creates the need for policy, especially measures that work across regions. Rain-fed farming appears only as the reason crop insurance deserves attention, not as the general reason for intervention.

Why each option is right or wrong

(a) Wrong. The passage says farmers are risk-averse, but only moderately in many cases, and that is not the reason for policy.
(b) Wrong. Farmers are described as using many strategies to manage risk.
(c) Right. Traditional methods and existing risk-sharing institutions are found inadequate.
(d) Wrong. Rain-fed farming is given as a reason to consider crop insurance, not the general need for intervention.

Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 2013, General Studies Paper II (CSAT), Series A. The paper on upsc.gov.in.