Comprehension : Comprehension

Q 173 / 466

UPSC CSE Prelims 2020

In India, agriculture still engages about half of its workforce, and about 85 percent of its farms are small and marginal. Compared to China and Vietnam, which have experienced fast structural and rural transformation, India's story is of slow transformation. As a result, poverty reduction in India was at a much slower pace during 1988-2014, compared to China and Vietnam. India's poverty reduction was slow during 1988-2005, but during 2005-2012, it accelerated dramatically—almost three times faster than during the earlier period. What did India do during this period? Research reveals that the relative price scenario changed significantly (by more than 50%) in favour of agriculture in the wake of rising global prices. This boosted private investments in agriculture by more than 50%. As a result, agri-GDP growth touched 4.1% during 2007-20 12 as against 2.4% during 2002-2007. The net surplus of agri-trade touched $25 billion in 2013-2014; real farm wages rose 6y 7% per annum. All this led to unprecedented fall in poverty.

With reference to the above passage, the following assumptions have been made:

  1. Structural and rural transformation is impossible when farms are mainly small and marginal.
  2. A good price incentive can trigger investments in agriculture.
  3. India needs to build value chains for high-value agriproducts like livestock and horticulture.
  4. Higher global prices of agricultural commodities are essential for India's poverty reduction.

Which of the above assumptions are valid?

EXPLANATION

Correct Option (C)

The correct assumptions are 2 and 3.

  • Statement 2 is valid: The passage explicitly states that a significant change in the relative price scenario "in favour of agriculture" led to a boost in "private investments in agriculture by more than 50%." This directly supports the assumption that a good price incentive can stimulate agricultural investments.
  • Statement 3 is valid: The passage discusses India's slow structural and rural transformation and the need for accelerated poverty reduction through agricultural growth. While not directly stated, the context of improving agricultural incomes and driving transformation, especially in a scenario of small and marginal farms, implies a need to move towards higher-value agriculture. Building value chains for high-value agri-products such as livestock and horticulture is a recognized strategy for enhancing farmer incomes and fostering structural transformation in the agricultural sector, aligning with the broader theme of the passage.

Incorrect Options:

  • Statement 1 is invalid: The passage indicates that India's transformation was "slow" due to its predominantly small and marginal farms, but it does not assert that such transformation is "impossible" under these conditions. The term "impossible" is an overstatement not supported by the text.
  • Statement 4 is invalid: The passage attributes accelerated poverty reduction during 2005-2012 partly to "rising global prices" which changed the relative price scenario. However, it does not claim that higher global prices are "essential" or the sole determinant for India's poverty reduction. The text also highlights the role of boosted private investments in agriculture, increased agri-GDP growth, and rising real farm wages as contributing factors. Therefore, stating it as "essential" is an overgeneralization not fully supported by the passage.