Mahadeva, a groundnut farmer in a drought-prone district, used to earn more than his cost of cultivation. After the economic reforms, he could not sell his groundnut at a price that covered his cost. Two reform-period changes worked against him: the first raised his cost, and the second lowered the price he could get. Which option gives these two changes in that order?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Reduction of subsidy on seeds and fertilisers; local markets flooded with cheap imported edible oils after import restrictions were removed
The subsidy cut on seeds and fertilisers raised Mahadeva’s cost. Cheap imported edible oils then pulled down the price he could get.
Option (1) A fall in research and extension work; a shift towards growing cash crops for the export market — Incorrect. Less research hurt his crop against disease, and the cash-crop shift is a general change. Neither is the subsidy cut that raised his cost.
Option (2) No major irrigation project by the government; a fall in research and extension work — Incorrect. Both happened, but neither lowered the market price he got.
Option (3) Local markets flooded with cheap imported edible oils after import restrictions were removed; reduction of subsidy on seeds and fertilisers — Incorrect. The right two changes, but in the wrong order: the subsidy cut came first (cost), the cheap imports second (price).
Option (4) Reduction of subsidy on seeds and fertilisers; local markets flooded with cheap imported edible oils after import restrictions were removed — Correct. Cost up first, then price down, in the order asked.
NCERT (2026-27): “Work These Out … Anantpur district is a drought-prone area. As a result of economic reforms, the government did not undertake any major irrigation project. Recently, groundnut crop in Anantpur is facing problems due to crop disease. Research and extension work has gone down due to lower government expenditure. Mahadeva and his friends brought this matter repeatedly to the notice of the government officials entrusted with this responsibility, but failed. Subsidy was reduced on material (seeds, fertilisers) which increased Mahadeva’s cost of cultivation. Moreover, the local markets were flooded with cheap imported edible oils, which was a result of removal of restriction on imports. Mahadeva was not able to sell his groundnut in the market as he was not getting the price to cover his cost. …” |