Statement: Should income generated from agricultural activities be taxed? Arguments: I. No. Many farmers face natural calamities, low yields, and low procurement prices; their incomes should not be taxed. II. Yes. Since a majority depends on agriculture, taxing them will augment resources. III. Yes. Some large farmers earn far more than many salaried earners; taxing them reduces disparity. Choose the option that best identifies the strong argument(s).

Introduction / Context:
Agricultural-income taxation involves equity (treating equals equally), ability-to-pay, and administrative feasibility. A nuanced policy typically exempts vulnerable smallholders while bringing large commercial operations into the net.

Given Data / Assumptions:

• Smallholders face income volatility and thin margins; taxation could be regressive and hard to administer.
• There exists heterogeneity: some agribusiness-scale farms have high, stable incomes.
• Efficient administration requires clear thresholds and safeguards.

Concept / Approach:
We identify arguments supporting a targeted, progressive approach rather than an all-or-nothing regime.

Step-by-Step Solution:
I: Protects small/fragile farmers—policy-relevant and consistent with equity. Strong.II: “Tax the majority to raise revenue” ignores hardship and efficiency; taxation should follow ability-to-pay, not headcount. Weak.III: Recognizes high-income outliers and disparity; supports progressive inclusion of large farmers. Strong.

Verification / Alternative check:
Design: high exemption thresholds, income averaging for volatility, and strict anti-abuse rules—aligning with I and III.

Why Other Options Are Wrong:
“All” includes weak II; “Only I” or “Only III” ignore the complementary strength of the other.

Common Pitfalls:
Assuming homogeneous farm incomes; ignoring administrative costs.

Final Answer:
Only I and III are strong