Cause: The Government has recently decided to hike the procurement price of paddy for the rabi crop. Which of the following is the most likely effect of this decision?

Introduction / Context:
This cause and effect question is based on basic economics and agricultural policy. The cause is clearly stated: the Government has decided to increase the procurement price of paddy for the rabi crop. Procurement price is the price at which the Government buys produce from farmers. We must now select the most likely and direct effect of this price increase on farmers behaviour.

Given Data / Assumptions:

• Cause: Procurement price of paddy for the rabi crop has been increased by the Government.
• Higher procurement price means higher guaranteed income per unit of paddy sold to Government agencies.
• Farmers generally choose crops based on expected profitability, risk and Government support.
• We assume other conditions like climate are normal.

Concept / Approach:
According to basic economic theory, when the price that producers receive for a product rises, and if costs do not rise proportionally, the profitability of that product increases. This higher profitability normally encourages producers to increase supply. In the context of agriculture, if the Government guarantees a higher procurement price for paddy, farmers will find it more attractive to cultivate paddy compared to other crops with lower or uncertain prices.

Step-by-Step Solution:
1. The Government hikes the procurement price of paddy for the rabi season.2. This means farmers will receive more money for each unit of paddy sold to the Government.3. Higher income per unit increases the expected profit from cultivating paddy.4. When one crop becomes more profitable, farmers are encouraged to allocate more land and resources to that crop.5. Therefore, the most direct and likely effect is that farmers will be encouraged to cultivate more paddy during the rabi season.

Verification / Alternative check:
Check the other options. Switching over to other cash crops when paddy is becoming more profitable (option B) goes against normal economic behaviour. Option C describes a possible past reason why the Government increased the procurement price, but it is a cause of the policy, not an effect of the price hike itself. Option D talks about a future Government decision in another season and is not a direct effect of this specific cause. Option E is about consumer behaviour in the rice market and is not the immediate effect of a procurement price change at the farm level.

Why Other Options Are Wrong:
Farmers switching to other cash crops: This would happen if paddy became less profitable, not more profitable.Drop in kharif production: This could be a historical cause for the hike, not a consequence of the hike.No future increase in kharif procurement price: This is speculative and not a direct or necessary effect.Consumers immediately stop buying rice: Consumer behaviour in the open market does not change instantly based only on procurement price decisions.

Common Pitfalls:
A common mistake is to confuse reasons for the policy with consequences of the policy. For example, lower production in a previous season could be a reason why the Government decided to raise procurement prices, but it cannot be the effect of that decision. Always separate "why was this policy taken" from "what will happen now that the policy is taken". For exam questions on agriculture and economics, remember the simple rule: higher assured price usually encourages higher production.

Final Answer:
Farmers may be encouraged to cultivate more paddy during the rabi season.