Globalization has significantly impacted Indian agriculture. Which of the following is a negative consequence often associated with globalization's impact on Indian farmers?
Show answer & explanation
Correct answer: C
Explanation
Solution: The correct answer is Exposure to competition from cheaper imported agricultural goods and volatile global prices.
Explanation:
☛ Globalization integrated the Indian economy with global markets, following the New Economic Policy of 1991 (LPG reforms).
☛ A major negative consequence of globalization on Indian farmers has been severe exposure to competition from heavily subsidized and cheaper foreign agricultural imports.
☛ Developed nations provide massive domestic support and export subsidies to their farmers, making their agricultural commodities cheaper in global trade.
☛ Indian farmers, predominantly small and marginal, often struggle to compete with these prices and face acute income vulnerability due to high volatility in global market prices.
☛ Options (A), (B), and (D) describe positive outcomes or opportunities created by trade liberalization rather than negative consequences.
Extra Exam-Relevant Facts:
☛ Agreement on Agriculture (AoA): Negotiated under the World Trade Organization (WTO) during the Uruguay Round, it officially took effect in 1995 to reform agricultural trade.
☛ WTO Subsidies Boxes: Subsidies are categorized into Green Box (non-trade distorting), Blue Box (production-limiting subsidies), and Amber Box (trade-distorting agricultural support subject to reduction commitments).
☛ Small & Marginal Farmers: According to agricultural census data, around 86% of operational landholdings in India belong to small and marginal farmers (owning less than 2 hectares).
☛ Input Cost Burden: Globalization also led to the entry of multinational seed and pesticide corporations, significantly increasing the input costs of farming.
Important One-Liners for Upcoming Exams:
☛ In which year was the New Economic Policy (LPG) introduced in India? → 1991
☛ Which round of GATT negotiations led to the establishment of the WTO and the Agreement on Agriculture? → Uruguay Round
☛ What color box under WTO provisions includes direct agricultural subsidies that distort international trade? → Amber Box
☛ What landholding size defines a 'marginal farmer' in India? → Below 1 hectare
☛ Where are the headquarters of the World Trade Organization (WTO) situated? → Geneva, Switzerland