Economy Key Terminologies — Agriculture
1. Previous Year Questions (UPSC)
Context: Understanding key agricultural terminologies is crucial for UPSC preparation. The following terms have been asked in previous years' examinations.
| Year | Term | Explanation |
|---|---|---|
| 2023 | 'Small Farmer Large Field' | Many marginal farmers in an area organize themselves into groups and synchronize and harmonize selected agricultural operations. |
| 2020 | Minimum Support Price (MSP) | It is a price at which the government purchases agricultural produce from the farmers to support their income and ensure that they get a fair price for their crops. MSP is announced by the government at the beginning of each sowing season and is usually higher than the market price to provide an incentive to farmers to produce more. Commission for Agricultural Costs & Prices (CACP) recommends MSPs for 22 mandated crops & fair and remunerative price (FRP) for Sugarcane. |
| 2020 | Government's Trading | It refers to the buying and selling of goods and services by the government in the market. The government engages in trading activities for various reasons, such as to meet the demand for essential goods, to maintain price stability, to regulate the market, or to promote certain economic policies or objectives. |
| 2020 | Government's Stockpiling | It refers to the accumulation and storage of essential commodities, such as food grains, oil, and fuel, by the government in large quantities to meet any future shortages or emergencies. Stockpiling is an important strategy for the government to ensure food security, price stability, and energy security in the country. |
| 2020 | Consumer Subsidies | These are financial assistance provided by the government to reduce the cost of certain essential goods or services for consumers. The objective of consumer subsidies is to make essential goods or services affordable and accessible to everyone, especially for low-income groups and vulnerable populations. |
| 2020 | Agricultural Credit Societies | These are cooperative societies that provide credit facilities to farmers and other rural people at reasonable rates of interest. These societies are established under the Cooperative Societies Act and are regulated by the Registrar of Cooperative Societies in each state. |
| 2020 | Social Capital Development | Social capital development refers to the process of building and strengthening the social networks, relationships, and institutions that facilitate collective action and cooperation in a community. Social capital development has a positive impact on poverty reduction, improved health and education outcomes, and increased economic growth. |
| 2020 | Loan Waiver | Loan waiver is a policy tool used by the government to waive off or forgive the outstanding loans of certain categories of borrowers, such as farmers, small and medium enterprises, or low-income groups who might not be able to repay their loans due to various reasons, such as crop failure, economic downturn, or natural disasters. |
| 2020 | Kisan Credit Card (KCC) Scheme | The Kisan Credit Card (KCC) Scheme is a government scheme launched by the Reserve Bank of India (RBI) to provide affordable credit facilities to farmers in India. The objective of the scheme is to support agricultural activities and provide timely and adequate credit to farmers for their production and investment needs. |
| 2020 | Short-term Credit | Short-term credit refers to a type of credit facility that is typically used to finance working capital needs or short-term cash flow requirements of businesses or individuals. Short-term credit is usually provided for a period of up to one year and is meant to be repaid within a short time frame. |
| 2020 | Working Capital | Working Capital is the capital used for maintenance of farm assets and activities allied to agriculture. |
| 2020 | Consumption Requirements | Consumption requirements refer to the basic needs that individuals or households require to sustain their daily lives. These requirements typically include food, water, shelter, clothing, and healthcare. |
| 2020 | Post-harvest Expense | Post-harvest expenses are the costs incurred after crops or agricultural products have been harvested from the field. These expenses are an important part of the agricultural value chain and can include various activities that are necessary to process, store, transport, and market the harvested products. |
| 2019 | Economic Cost of Food Grains | The economic cost of food grains refers to the total cost involved in the production, processing, and distribution of food grains. It includes both the monetary and non-monetary costs associated with the production and distribution of food grains, including the cost of inputs, labor, transportation, storage, and marketing. |
| 2019 | Agricultural Commodities | Agricultural commodities refer to raw materials or products derived from agricultural activities that can be traded on markets. These commodities are often used as inputs in other industries, such as food processing, livestock feed, and biofuels. |
| 2019 | Ceiling Laws | Ceiling laws in India refer to the legislation that sets a limit on the maximum amount of land that an individual or a family can own. These laws were introduced in India in the 1950s as a means of promoting land reforms and ensuring a more equitable distribution of land resources. |
| 2019 | Family/Individual Holdings | Family land holdings refer to the land owned by a family or a group of related individuals. Individual land holdings refer to the land owned by an individual or a group of individuals. These holdings can be used for a variety of purposes, such as agriculture, residential, commercial, and industrial use. |
| 2019 | Cash Crops | Cash crops are typically cultivated on a large scale and are intended for commercial use, either for domestic consumption or for export. Some common cash crops include coffee, cocoa, tea, cotton, tobacco, sugarcane, and oilseeds such as soybeans, sunflowers, and canola. |
| 2019 | Agricultural Commodity Trading | Agricultural commodity trading is the buying and selling of agricultural commodities such as grains, oilseeds, livestock, and other products on organized exchanges or markets. These commodities are traded globally and are used as inputs in a variety of industries, such as food processing, biofuels, and animal feed. |
| 2019 | Procurement Incidentals | Procurement incidentals are expenses incurred during procurement till the food grains reach the first point of godown. |
| 2019 | Customs Duty | Customs duty is a tax imposed by a government on goods that are imported into a country. The purpose of customs duty is to protect domestic industries by making foreign goods more expensive and less competitive in the domestic market. |
| 2018 | Cabinet Committee on Economic Affairs (CCEA) | The Cabinet Committee on Economic Affairs (CCEA) is a committee of the Union Cabinet that is responsible for making decisions on economic and financial matters that are of national significance. The primary mandate of the CCEA is to review and approve proposals related to economic policies, investment proposals, foreign investments, and reforms in key sectors such as agriculture, industry, and infrastructure. |
| 2017 | National Agriculture Market (NAM) | The National Agriculture Market (NAM) is an online trading platform for agricultural commodities in India. The NAM was launched in 2016 with the aim of creating a unified national market for agricultural commodities by integrating various APMC (Agricultural Produce Market Committee) Mandis across the country. |
| 2016 | Drip Irrigation | Drip irrigation is an efficient method of irrigation as it minimizes water loss due to evaporation and runoff. It also helps in the conservation of water by reducing water usage compared to other irrigation methods. Additionally, it enables the efficient use of fertilizers and nutrients by delivering them directly to the plant roots. |
| 2015 | Fair and Remunerative Price (FRP) | FRP is a price mechanism in India that is fixed by the government to ensure a fair price to sugarcane farmers for their produce. The FRP is announced by the central government at the beginning of every sugarcane season and is applicable to all sugarcane-producing states. The FRP is determined based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). |
| 2015 | Commission for Agricultural Costs and Prices (CACP) | The Commission for Agricultural Costs and Prices (CACP) is an advisory body in India that provides recommendations to the government on agricultural pricing policies. The primary mandate of the CACP is to recommend the Minimum Support Prices (MSP) for various agricultural commodities such as crops, pulses, oilseeds, and FRP for sugarcane. |
| 2015 | APMC | Agricultural Produce Market Committee (APMC) is a statutory body established by state governments in India under the Agricultural Produce Market Committee Act. It aims at regulating and facilitating the sale and purchase of agricultural produce in the market yard or mandi. |
| 2015 | AIBP (Accelerated Irrigation Benefits Programme) | AIBP is a central government scheme in India launched in 1996 with the aim of providing financial assistance to states for the completion of ongoing irrigation projects and the creation of new irrigation infrastructure. The program is implemented by the Ministry of Jal Shakti. |
| 2015 | Command Area Development Programme (CADP) | The Command Area Development Programme (CADP) is a centrally sponsored scheme. The program is implemented by the Ministry of Jal Shakti. The CADP focuses on the comprehensive development of the command area of major and medium irrigation projects, with the aim of increasing agricultural productivity and production. |
| 2015 | Capital-Augmenting Technological Progress | It is a type of technological progress in which the productivity of capital is increased through the introduction of new technology or innovations. This type of technological progress is characterized by the development of new and improved capital goods such as machinery, equipment, and tools that can be used to produce more output with the same amount of capital. |
| 2015 | Seed Village Concept | It is a program that was initiated by the Indian Council of Agricultural Research (ICAR) with the aim of promoting the production and distribution of quality seeds to farmers. The program aims to develop a network of farmers who can produce and distribute quality seeds for different crops in their local areas. |
2. Important Terms in News
Context: These agricultural terms frequently appear in news and policy discussions, making them essential for UPSC aspirants to understand.
Producer Organisation (PO)
- It is a legal entity formed by primary producers, viz. farmers, milk producers, fishermen, weavers, rural artisans, craftsmen.
- A PO can be a producer company, a cooperative society or any other legal form which provides for sharing of profits/benefits among the members.
- In some forms like producer companies, institutions of primary producers can also become member of PO.
Farmers Producer Organisation (FPO)
- It is one type of PO where the members are farmers.
Contract Farming
- A company extends loans, technical knowledge and material inputs to a number of small farmers in an area so that they produce the agricultural commodity required by the company for its manufacturing process and commercial production.
Cobweb Phenomenon
- This refers to a phenomenon where the prices of certain goods witness fluctuations that are cyclical in nature.
- It happens due to faulty producer expectations.
Key Agricultural Terms at a Glance:
- PO/FPO: Legal entity of primary producers for profit sharing
- Contract Farming: Company provides inputs to farmers for commercial production
- Cobweb Phenomenon: Cyclical price fluctuations due to faulty producer expectations
- PO/FPO: Legal entity of primary producers for profit sharing
- Contract Farming: Company provides inputs to farmers for commercial production
- Cobweb Phenomenon: Cyclical price fluctuations due to faulty producer expectations
3. Summary: Key Agricultural Terminologies
| Term | Key Definition |
|---|---|
| MSP | Government purchase price to support farmers' income (CACP recommends) |
| FRP | Fair and Remunerative Price for sugarcane (recommended by CACP) |
| CACP | Advisory body recommending MSP and FRP |
| APMC | Statutory body regulating agricultural produce sale and purchase |
| NAM | Online trading platform for agricultural commodities (launched 2016) |
| KCC | Kisan Credit Card scheme for affordable credit to farmers |
| Loan Waiver | Government forgiveness of outstanding loans for farmers |
| Cash Crops | Commercial crops like coffee, cotton, sugarcane, tobacco |
| Ceiling Laws | Limit on maximum land ownership (land reforms) |
| Drip Irrigation | Efficient irrigation method minimizing water loss (UPSC 2016) |
| CCEA | Cabinet Committee on Economic Affairs (UPSC 2018) |
| FPO | Farmers Producer Organisation (legal entity of farmers) |
| Contract Farming | Company provides inputs to farmers for commercial production |
| Cobweb Phenomenon | Cyclical price fluctuations due to faulty producer expectations |
Key Takeaways for UPSC
- MSP: Recommended by CACP for 22 crops + FRP for sugarcane
- APMC: State-level statutory body for agricultural marketing
- NAM: Online trading platform (launched 2016)
- KCC: RBI scheme for affordable credit to farmers
- FRP: Fair price for sugarcane farmers (CACP recommends)
- Ceiling Laws: Land reforms limiting land ownership
- Drip Irrigation: Efficient water conservation method (UPSC 2016)
- CCEA: Cabinet committee on economic affairs (UPSC 2018)
- FPO: Legal entity of farmers for profit sharing
High-Yield Interactive UPSC Quiz (Chapter 3: Agriculture)
Q1. Minimum Support Price (MSP) is recommended by which body?
Correct Answer: B. The Commission for Agricultural Costs and Prices (CACP) recommends MSPs for 22 mandated crops and fair and remunerative price (FRP) for Sugarcane. (UPSC 2020)
Q2. APMC stands for:
Correct Answer: B. APMC stands for Agricultural Produce Market Committee. It is a statutory body established by state governments under the Agricultural Produce Market Committee Act. (UPSC 2015)
Q3. The National Agriculture Market (NAM) was launched in which year?
Correct Answer: C. The National Agriculture Market (NAM) was launched in 2016 with the aim of creating a unified national market for agricultural commodities by integrating various APMC Mandis. (UPSC 2017)
Q4. The Kisan Credit Card (KCC) Scheme was launched by:
Correct Answer: B. The Kisan Credit Card (KCC) Scheme is a government scheme launched by the Reserve Bank of India (RBI) to provide affordable credit facilities to farmers in India. (UPSC 2020)
Q5. Fair and Remunerative Price (FRP) is fixed for which crop?
Correct Answer: C. FRP is a price mechanism fixed by the government to ensure a fair price to sugarcane farmers for their produce. It is recommended by CACP. (UPSC 2015)
Q6. Which of the following is NOT a cash crop?
Correct Answer: C. Cash crops are cultivated for commercial use. Wheat is primarily a food crop (subsistence crop), while sugarcane, cotton, and tobacco are cash crops. (UPSC 2019)
Q7. Ceiling laws in India were introduced to:
Correct Answer: B. Ceiling laws in India set a limit on the maximum amount of land an individual or family can own. They were introduced in the 1950s as a means of promoting land reforms and ensuring a more equitable distribution of land resources. (UPSC 2019)
Q8. The Accelerated Irrigation Benefits Programme (AIBP) is implemented by:
Correct Answer: B. The Accelerated Irrigation Benefits Programme (AIBP) is a central government scheme implemented by the Ministry of Jal Shakti, launched in 1996. (UPSC 2015)
Q9. The Cabinet Committee on Economic Affairs (CCEA) is responsible for:
Correct Answer: B. The Cabinet Committee on Economic Affairs (CCEA) is a committee of the Union Cabinet responsible for making decisions on economic and financial matters of national significance. (UPSC 2018)
Q10. The 'Cobweb Phenomenon' in agriculture refers to:
Correct Answer: B. The Cobweb Phenomenon refers to a phenomenon where the prices of certain goods witness cyclical fluctuations due to faulty producer expectations.