Directions (1-10): Read the following passage carefully and choose the best answer to each question out of the five given alternatives.
This industry preys on pestilence for profits. As the primary sector thrives under the benevolent gaze of the rain gods, according to the CMIE forecast for Business Today, the production of food grains will touch 187 million tons in 1994-95-up from 182 million tons in 1993-94-pesticides are likely to be a key input in the country’s race for a quantum jump in agricultural productivity.
Classified by target species, pesticides can be divided into four broad categories. Insecticides-like monocrotophos and fenvalerate – are used for killing insects. Herbicides – such as butachlor and anilophos – remove weeds and unwanted plants. Fungicides – like nickel chloride – kill fungi. And fumigants and rodenticides – such as zinc and aluminium phosphide – are used to kill rodents.
At present, insecticides contribute to almost 75 percent of the turnover of the pesticides industry in value terms and 85 percent in terms of volume. This is at variance with the trend in the West, where insecticides account for just 32 percent of pesticides consumption: it is herbicides and fungicides which account for the largest share of consumption in those countries.
In terms of manufacturing technology, the production of pesticides can be classified into two main categories; technical-grade materials and formulations. Technical-grade-material-the basic chemical of high purity-is manufactured in organized units, with the top 10 units accounting for more than 80 percent of production. Most of them have a dominant market share in one or two key products.
However, most pesticides are used as formulations, which are produced by the processing of technical grade materials and are manufactured by both large and small-scale units. In fact, the Insecticides Act of 1968 stipulates that 50 percent of the production of technical-grade pesticides must be supplied by every manufacturer to non-associated formulators.
While the stipulation aims at ensuring the sale of pesticides at cheaper prices, arbitrary control has led to a conflict of interests. Formulators complain that technical-grade manufacturers operate a cartel. The latter, however, claim that rising input costs-raw materials constitute 60 percent of the selling price of pesticides-are forcing hikes in selling prices.
The pesticides industry has over 80 registered technical-grade manufacturers and about 800 registered formulators. About 160 formulators are associated with technical-grade manufactures and boast of the advantage of being able to obtain raw materials easily, even during the peak consumption season.
As the level of technology required is relatively low, formulators have low fixed investment per unit of output. At 35 percent, the pesticides industry’s average capacity utilization is rather low. And this, notwithstanding the 1974 ban imposed by the government on the addition of formulation capacity. However, firms can expand their formulation capacities so long as such expansions are linked to the increased production of technical-grade material.
One of the main reasons for low capacity utilization in this industry is the seasonal nature of the demand for pesticides. The maximum amount of sales is recorded between July and November, which is reflected in the high inventories that are built up in the first quarter of the year. As the active ingredient deteriorates over time, a large number of formulations have a limited shelf-life.
At another level, the industry is characterized by the practice of credit sales to the trade. These credits – which are typically for 60 to 90 days-coupled with the high level of inventories-to cope with demand fluctuations-contribute to the working capital-intensive nature of the industry. That’s why most manufacturers have diversified, the most common diversification being pharmaceuticals. An analysis of pesticides sales as a percentage of the total sales of the major players confirms that most pesticides markers are well-diversified.
Q1. The growth in the production of food grains in 1994-95 over 1993-94 is predicted to be roughly
(a) 187 million tons.
(b) 2 percent.
(c) 3 percent.
(d) 182 million tons.
(e) 7 billion
Q2. This country is the third largest consumer of pesticides in spite of
(a) a low per capita consumption of pesticides.
(b) 30 percent of production being destroyed by insects.
(c) our dependence on monsoons.
(d) food grain production being insignificant.
(e) poor technology.
Q3. The market for technical-grade pesticides in India is dominated by
(a) insecticide manufacturers.
(b) small scale sector.
(c) just ten units.
(d) large scale sector.
(e) is because there is no cartel of manufacturers.
Q4. The relationship between formulators and producers of technical-grade material
(a) is determined by the market.
(b) is rather strong in India.
(c) depends on their end – use.
(d) is partly governed by law.
(e) the seasonal nature of demand.
Q5. The hike in selling prices
(a) is blamed by formulators on manufacturers.
(b) is the consequence of administered pricing.
(c) is caused by the Act of 1968.
(d) is because there is no cartel of manufacturers.
(e) our dependence on monsoons.
Q6. The percentage of formulators who can boast of being able to obtain raw materials easily is
Q7. High inventories are built up during
(a) October, November, December.
(b) April, May, June.
(c) July, August, September.
(d) low per capita consumption.
(e) None of these
Q8. The pesticides industry is characterized by credit sales, the typical credit is
(a) 30 percent of sales.
(b) 2 to 3 months.
(c) to the customers of technical-grade material.
(d) 100 percent of sale.
(e) 7 months
Q9. That the pesticides makers are well diversified is indicated by the
(a) dominance of pesticides sales in the total sales.
(b) reduction in pesticides production.
(c) analysis of pesticides sales as a percentage of total sales.
(d) hike in prices of pesticides.
(e) small scale sector.
Q10. Capacity utilization in the pesticides industry is low because of
(a) a ban on expansion.
(b) the seasonal nature of demand.
(c) poor technology.
(d) low per capita consumption.
(e) is determined by the market.
Directions (11-15): In each of the following sentences, parts of the sentence are left blank. Beneath each sentence, five different ways of completing the sentence are indicated. Choose the best alternative from among the five options.
Q11. Cars __________ to accommodate wheelchair users are vital to disabled people to get out and about and enjoy __________ lives.
(a) designed, their
(b) modified, healthy
(c) adapted, active
(d) modified, itinerant
(e) adopted, itinerant
Q12. Some __________ defending, especially in the second half of the game allowed the opposition to __________ and the defending champions lost the game.
(a) slack, score
(b) superb, lose
(c) robust, win
(d) superb, score
(e) slack, lose
Q13. Print, paper, and newspapers enabled the rise of new types of __________ based on expanded popular participation.
(a) class conflicts
(b) cultural forms
(c) social norms
(d) political systems
(e) ethical dilemmas
Q14. Businesses attempt to __________ the conflicts of interest between groups to ensure __________ operation of the organization.
(a) compromise, profitable
(b) reconcile, efficient
(c) reconcile, commercial
(d) stimulate, efficient
(e) encourage, professional
Q15. One in three people on our planet have no __________ to modern energy to light and heat the __________ in which they live.
(a) resource, homes
(b) right, houses
(c) contact, nations
(d) access, dwellings
(e) source, countries