3.1 Name and discuss the THREE main types of resources that have to be considered when compiling a business plan - NSC Agricultural Management Practices - Question 3 - 2021 - Paper 1

The farming system that emphasizes entrepreneurial characteristics is Commercial Farming. Two reasons for this are:

1. Increased Food Production: Entrepreneurs in commercial farming drive innovation and efficiency, adapting to market demands and increasing food production as needed.

2. Risk Management: Successful commercial farmers are adept at identifying market trends and managing risks, allowing them to thrive in a competitive environment.

Using the provided values:

• Fixed cost = R6 500
• Variable cost = R1 000
• Price = R3 500

First, calculate the price-variable cost:

Price - Variable Cost = R3 500 - R1 000 = R2 500

Now, substitute into the formula for BEP:

$BEP = \frac{R6 500}{R2 500} = 2.6 \text{ ton/ha}$

The break-even point (BEP) is critical for a farming enterprise as it represents the level of production at which total revenue equals total costs. At this point, the farmer is not making a profit or a loss.

Understanding the BEP helps farmers set production targets, price their products competitively, and plan for profit growth. If production exceeds this threshold, the farm will generate profit; if not, the farm will incur losses.

To calculate the profit:

1. Determine total revenue:

   • Total Revenue = Yield × Price per ton
   • Total Revenue = 4 ton × R3 500 = R14 000

2. Determine total costs:

   • Total Costs = Fixed Costs + (Variable Cost × Yield)
   • Total Costs = R6 500 + (R1 000 × 4) = R6 500 + R4 000 = R10 500

3. Calculate Profit:

   • Profit = Total Revenue - Total Costs
   • Profit = R14 000 - R10 500 = R3 500

Several factors influence consumers' willingness to buy a product, including:

1. Price: Consumers are likely to purchase more if the price is lower, given a fixed income.
2. Quality: Higher quality products can attract more buyers, making them willing to pay a premium.
3. Consumer Preferences: Individual tastes and preferences can significantly affect purchasing decisions.

Advertising agricultural products is essential for various reasons:

1. Create Awareness: It informs consumers about available products and services, promoting brand recognition and recall.
2. Persuade Consumers: Well-crafted advertisements persuade consumers to choose specific products over competitors.
3. Promote Special Offers: Advertising can effectively communicate promotions or special offers, driving sales.

The Target Market refers to the specific group of consumers that a business aims to reach with its products and marketing efforts. Defining a target market allows businesses to tailor their marketing strategies, product offerings, and promotional campaigns to meet the specific needs and preferences of this group, ultimately increasing the likelihood of success.

Competition in marketing strategies refers to the other businesses that offer similar products or services. Understanding the competitive landscape is crucial for positioning a product effectively. It involves analyzing competitors' strengths and weaknesses, pricing strategies, and market share to develop strategies that can attract consumers.

Distribution refers to the methods and channels used to deliver products from the producer to the consumer. Effective distribution strategies ensure that products are available in the right places at the right times, enhancing customer satisfaction and increasing sales. It includes physical distribution logistics as well as deciding on distribution partners.

The worker is entitled to claim for illness under the Occupational Health and Safety Act. This Act outlines the rights of workers to health and safety in the workplace, ensuring that they can seek compensation for work-related illnesses.

If the worker refuses to wear protective clothing, the farmer can take disciplinary action. This may involve educating the worker on the importance of safety procedures or, in severe cases, suspending or terminating the worker's contract if they continue to disregard safety regulations.

To correct the worker's action, the farmer should adhere to the following steps:

1. Immediate Action: The farmer must take action as soon as possible after the incident, addressing the refusal to wear protective clothing promptly.
2. Consistent Consequences: Any disciplinary action taken must be consistent with existing company policies regarding safety violations.
3. Documentation: Document the incident and actions taken to provide a record of compliance with safety regulations and procedures.

Motivating farm workers can lead to several objectives:

1. Higher Productivity: Motivated workers tend to have higher levels of efficiency and output, improving overall farm productivity.
2. Job Satisfaction: Effective motivation strategies help workers feel valued and appreciated, enhancing their job satisfaction.
3. Team Cohesion: By motivating workers, a farm manager can foster a sense of teamwork and belonging among staff, further enhancing operations.

Training farm workers is crucial for several reasons:

1. Skill Development: It increases workers' skills and knowledge, allowing them to perform tasks more efficiently and safely.
2. Safety Compliance: Training ensures that workers understand safety protocols, reducing the risk of accidents and injuries.
3. Increased Productivity: Well-trained workers can adapt to new technologies and practices, leading to increased productivity on the farm.

Two important psychological needs of farm workers include:

1. Acceptance by Others: Workers need to feel accepted and valued by their peers and supervisors in the workplace.
2. Recognition: Farm workers benefit from being acknowledged for their contributions and efforts, which boosts morale and motivation.