GS PrelimsAgricultureFarm Subsidy2020

In India, which of the following can be considered as public investment in agriculture? 1. Fixing Minimum Support Price for agricultural produce of all crops 2. Computerization of Primary Agricultural Credit Societies 3. Social Capital development 4. Free electricity supply to farmers 5. Waiver of agricultural loans by the banking system 6. Setting up of cold storage facilities by the governments Select the correct answer using the code given below:

A

1, 2 and 5 only

B

1, 3, 4 and 5 only

C

2, 3 and 6 only

D

1, 2, 3, 4, 5 and 6

Correct Answer: Option C

Explanation

1. Public investment in agriculture refers to government expenditure aimed at creating long-term productive assets or improving the infrastructure and support systems for the agricultural sector. 2. Statement 1: Fixing Minimum Support Price (MSP) is a price support mechanism, a form of market intervention or subsidy, not typically classified as public investment in asset creation. 3. Statement 2: Computerization of Primary Agricultural Credit Societies (PACS) involves upgrading infrastructure and technology in rural credit institutions. This enhances efficiency and service delivery, qualifying as public investment. 4. Statement 3: Social Capital development (e.g., promoting farmer producer organizations, community initiatives) strengthens collective action and institutional capacity, which can be considered a form of public investment in the sector's enabling environment. 5. Statement 4: Free electricity supply to farmers is an input subsidy, reducing the cost of production, but not a direct investment in creating durable assets. 6. Statement 5: Waiver of agricultural loans is a transfer payment or relief measure, not an investment in future productivity. 7. Statement 6: Setting up of cold storage facilities by the governments involves creating physical infrastructure (durable assets) that improves post-harvest management and reduces wastage. This is a clear example of public investment. 8. Therefore, items 2, 3, and 6 can be considered as public investment in agriculture.

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