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Preparing a business plan is important for a new farmer - NSC Agricultural Management Practices - Question 3 - 2022 - Paper 1
Question 3
Preparing a business plan is important for a new farmer. 3.1.1 Give FIVE reasons for developing a business plan. 3.1.2 State FIVE financial strategies as part of t... show full transcript
Worked Solution & Example Answer:Preparing a business plan is important for a new farmer - NSC Agricultural Management Practices - Question 3 - 2022 - Paper 1
Step 1
Give FIVE reasons for developing a business plan.
Answer
- Feasibility Assessment: A business plan tests the feasibility of the enterprise by evaluating potential risks and benefits.
- Determining Financial Needs: It assists in determining the financial resources required to start and sustain operations.
- Defining Daily Operations: The plan helps in detailing daily activities and responsibilities.
- Future Prospects: It outlines the future prospects and expected growth of the business.
- Credit Acquisition: A business plan is essential for obtaining credit from financial institutions.
Step 2
State FIVE financial strategies as part of the marketing plan.
Answer
- Budgeting: Establishing a clear budget for marketing activities and tracking expenses to avoid overspending.
- Pricing Strategy: Developing competitive pricing strategies based on market research and cost analysis.
- Investment in Marketing Tools: Allocating funds for effective marketing tools like social media ads or SEO strategies.
- Forecasting Sales: Creating sales forecasts to estimate revenue and align marketing activities accordingly.
- Cost Management: Identifying and managing costs related to marketing campaigns to ensure a good return on investment.
Step 3
Identify the entrepreneurial characteristics as indicated by A, B, C and D.
Answer
- A (Organisational/coordination abilities): The ability to allocate tasks based on worker skills suggests strong coordination skills.
- B (Technical/operational knowledge): Knowledge of growing crops indicates a solid technical understanding.
- C (Innovative/creativity/vision insight): The ability to develop new ideas reflects innovation and vision.
- D (Perseverance): Keeping on trying despite setbacks demonstrates resilience and perseverance.
Step 4
State THREE resources that an entrepreneur requires when starting a farming enterprise.
Answer
- Financial Resources: Sufficient capital to invest in equipment, seeds, and operational expenses.
- Human Resources: Skilled labor to assist in farming operations and decision making.
- Physical Resources: Access to land, machinery, and tools necessary for farming activities.
Step 5
Distinguish primary from secondary and tertiary agricultural sectors.
Answer
- Primary Sector: Involves the extraction and production of raw products, such as farming and fishing.
- Secondary Sector: Involves processing raw materials into finished goods, providing value through production.
- Tertiary Sector: Focuses on services related to agriculture, such as marketing and distribution of agricultural products.
Step 6
Step 7
State THREE advantages of farm gate marketing.
Answer
- Lower Marketing Costs: No middlemen involved, reducing overall costs in the marketing chain.
- Direct Access to Consumers: Farmers can sell directly to consumers, enhancing profitability.
- Fresher Products: Products sold are fresh as they do not spend time in transit, improving quality.
Step 8
State THREE disadvantages of farm gate marketing.
Answer
- Market Dependence: Farmers must depend on local markets, which may limit sales volume.
- Accessibility Issues: Some consumers may find it hard to reach rural farm gates.
- Profitability Variability: Pricing may be inconsistent, affecting revenue stability.
Step 9
Distinguish between internet marketing and contract marketing.
Answer
| Criteria | Internet Marketing | Contract Marketing |
|---|---|---|
| Platform | Operates on various online platforms | Involves a specific agreement |
| Pricing | Fluctuating prices based on market forces | Fixed price agreements are made |
| Audience Reach | Global audience accessible | Specific buyer or group of buyers |
Step 10
State THREE functions of producer organisations in the agriculture industry.
Answer
- Market Analysis: Conducting research on market trends to help farmers understand demand.
- Resource Coordination: Assisting in the organisation and coordination of resources among farmers.
- Product Promotion: Promoting agricultural products both locally and internationally.
Step 11
Name THREE advantages of marketing produce on fresh-produce markets.
Answer
- Higher Product Visibility: Fresh produce is more visible, attracting more consumers.
- Access to Wider Consumer Base: Markets can attract diverse consumers, increasing sales potential.
- Opportunity for Price Setting: Farmers can better determine prices based on competition and demand.
Step 12
Name FOUR advantages of evaluation.
Answer
- Resource Optimization: Ensures that resources are used effectively and efficiently.
- Performance Insight: Provides insights into the operation's performance to enhance decision-making.
- Identifying Weaknesses: Helps in identifying areas of improvement for future operations.
- Informed Decision Making: Facilitates informed choices regarding business strategies.
Step 13
List FOUR advantages of proper management regarding the application of labour.
Answer
- Increased Efficiency: Proper management ensures tasks are allocated effectively, improving productivity.
- Optimal Resource Use: Utilising labour resources efficiently leads to lower operational costs.
- Skill Development: Encourages farmers to train and develop skills in their teams, improving overall performance.
- Accountability: Clear responsibilities help in establishing accountability among workers.