Answers: Mains Marathon – UPSC Mains Current Affairs Questions – October 4

Archives 

Q.1 Do you think that investing in scientific research for food production is important? Also, discuss the importance of empowerment of women in agriculture. GS 3

Investing in scientific research for food production

• India’s fivefold increase in grain production over the past 50 years is largely the result of strong scientific research that has focused on high-yielding crop varieties, better agronomic practices, and pro-farmer policies.
• However, India continues to face challenges such as food insecurity and malnutrition, particularly in rural areas.
• Providing world’s growing urban population with safe and healthy food requires both a rural and a peri-urban agricultural movement – a huge challenge, but also an opportunity for ingenuity.
• Integrating agricultural production, nutrition, and health is emerging as a key focal point throughout Asia, with policymakers shifting their attention to the role of biodiversity and the power of local farming systems to improve nutritional status. Scientific research would play an important role in these areas.
• There is a potential in targeting underused crops as well such as millets, pulses, and vegetables as a sustainable means of increasing agricultural production and improving nutrition and health in high-need areas.
• Bio-fortification is also important in overcoming hidden hunger caused by micronutrient deficiencies such as iron, iodine, zinc, vitamin A, and vitamin B12.

Empowerment of women in agriculture

• Studies show that women make up nearly half of agricultural laborers, yet they carry out approximately 70% of all farm work.
• Women are among the most disadvantaged because they are typically employed as marginal workers, occupying low-skilled jobs such as sowing and weeding.
• Research shows that empowering women is one of the best ways to improve nutrition.
• Research needs to continue focussing on the needs of women farmers to ensure that they are the direct recipients of development impacts, such as access to markets and income, to improve theirs and their children’s access to adequate and diversified diets.
• It is crucial to continue to identify issues and seek evidence-based solutions through research.

Q.2 SEBI has recently introduced the measure to keep a check on securities that witness an abnormal price rise. Discuss the reasons behind SEBI pushing in the measure and also discuss the functioning of the newly introduced Graded Surveillance Measure. GS 3

Why did SEBI bring in the measure?

The primary principle behind the graded surveillance framework is to alert and protect investors trading in a security, which is seeing abnormal price movements.

SEBI may put shares of companies under the measure for suspected price rigging or under the ambit of ‘shell companies’.

The measure would provide a heads up to market participants that they need to be extra cautious and diligent while dealing in such securities put under surveillance.

How the Graded Surveillance Measure works?

Once a firm is acknowledged for surveillance it goes through six stages with corresponding surveillance actions and the restrictions on trading in those securities gets higher progressively.

In the first stage, the securities are placed in the trade-to-trade segment, meaning no speculative trading is allowed and delivery of shares and payment of consideration amount are mandatory.

A maximum of 5% movement in share price is allowed.

In the second stage, the buyer of the security has to put 100% of trade value as additional surveillance deposit.

The deposit would be retained by the exchanges for a period of five months and refunded in a phased manner.

In the third stage, trading is permitted only once a week i.e, every Monday, apart from the buyer putting 100% of the trade value as additional surveillance deposit.

In the fourth stage, trading would be allowed once a week and the surveillance deposit increases to 200% of the trade value.

In the fifth stage, trading would be permitted only once a month (first Monday of the month) with additional deposit of 200%.

In the sixth and final stage, there are maximum restrictions.

Trading is permitted only once a month at this stage, with no upward movement allowed in price. Also, the additional surveillance deposit would be 200%.

What are the challenges?

The only challenge for the small investors is that these announcements are often made at very short notice and implemented from the next day itself thus giving those who have already entered the stock less than adequate time to exit it.

Of course, there is also potentially another risk. For example, even if time is given, the stock might crash next day on the news, triggering the lower price circuit and leaving no exit opportunity.

Q.3  What are the challenges that India’s farm exports is facing? What are the reasons for declining farm exports? Suggest some measures to boost farm exports.(GS 3)

Ans:

The government will soon announce a policy aimed at boosting farm exports.This would provide a boost to Indian farmers’ incomes. Farm exports will also earn valuable foreign exchange.

Challenges that India’s farm exports is facing:

• India’s agricultural exports increased at a brisk pace for more than two decades after the globalization in 1991.
• Although imports also increased, they were more than compensated for by exports.
• India’s agricultural trade surplus recorded a more than ten-fold increase between 1991-92 and 2013-14
• Between 2013-14 and 2016-17, agricultural exports fell by 22% while imports increased by 62%. As a result, the trade surplus has fallen by 70%.

Reasons for decline farm sector:

• Fall in international prices and loss of competitiveness due to currency movements for India’s plummeting farm export earnings.
• A report by the Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organisation on the agricultural outlook, released in July this year, expects a flat to declining trend for primary commodity prices.
• The situation is dismal for cotton, sugar and rice, which are major components of India’s agriculture export basket.
• Government’s restrictions on important food items to prevent inflationary pressures in the domestic economy.
• India’s warehousing capacity for perishables is disproportionately concentrated in a few regions.
• Almost 50% of cold-storage capacity is concentrated in the states of Uttar Pradesh

Measures:

• Improvement in warehousing infrastructure would also counter inflation concerns due to seasonal factors such as poor monsoon rains.
• India’s agricultural trade surplus could increase significantly if it cuts down on imports of pulses and edible oils.
• Pulses alone made up for close to 17% of the value of India’s total imports of agriculture and allied products in 2016-17.
• The problem of bumper crops leading to a price crash can be resolved by policies such as minimum support prices.
• India pursued the cause of legitimizing its procurement based PDS at the WTO in the past two WTO ministerial conference.