Assertion: The zamindars defaulted on payment of revenue to the East India Company by the end of the eighteenth century.
Reason: During this period the prices of agricultural produce were extremely profitable.

The Assertion is correct but the Reason is incorrect.

The correct answer is Option 4: The Assertion is correct but the Reason is incorrect.

Assertion: The zamindars defaulted on payment of revenue to the East India Company by the end of the eighteenth century.  This is correct. The zamindars, under the Permanent Settlement introduced by the British in Bengal, Bihar, and Odisha in 1793, were required to pay fixed revenue to the East India Company. However, due to various factors such as exploitation, economic pressures, and fluctuating agricultural prices, many zamindars found it difficult to meet their revenue obligations, leading to defaults.

Reason: During this period the prices of agricultural produce were extremely profitable. This is incorrect. In the 1790s, the prices of agricultural produce were depressed, making it difficult for the ryots to pay their dues to the zamindar. If the zamindar could not collect the rent, how could he pay the Company.