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 is Commercial Farming.

1. Increased Production Efficiency: Entrepreneurial characteristics drive innovation in practices and technologies that enhance production efficiency and profitability.

2. Risk Management: Entrepreneurs are better able to assess and manage risks associated with market fluctuations and resource availability, which is crucial for sustainability in commercial farming.

Given:

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

The formula for BEP is: ext{BEP} = rac{ ext{Fixed Cost}}{ ext{Price} - ext{Variable Cost}}

Substituting the values: ext{BEP} = rac{6500}{3500 - 1000} = rac{6500}{2500} = 2.6 ext{ ton/ha}

The break-even point (BEP) is crucial for a farming enterprise because it indicates the quantity of product that must be produced and sold to cover all costs (fixed and variable).

• At the BEP, total revenues equal total costs, meaning the farmer does not make a profit or incur a loss.
• Understanding the BEP helps farmers to set sales targets, making strategic decisions regarding production levels and pricing.

To calculate profit, we use the formula: $ext{Profit} = ( ext{Yield} imes ext{Price}) - ( ext{BEP} imes ext{Variable Cost})$

Substituting the values:

• Yield = 4 ton/ha
• Price = R3 500
• BEP = 2.6 ton/ha
• Variable cost = R1 000

Calculating the income: ext{Income} = 4 imes 3,500 = R14,000\

Calculating total costs: ext{Costs} = 2.6 imes 1,000 = R2,600\

Now calculate profit: ext{Profit} = R14,000 - R2,600 = R11,400\

The factors that influence consumer purchasing decisions include:

1. Price of the Product: Consumers often have a specific budget and will only purchase products that meet their financial criteria.

2. Quality and Preference: The perceived quality and personal preferences towards a product significantly affect buying behavior. High-quality products will tend to attract more buyers.

3. Availability and Accessibility: The location and ease of access to products can impact the quantity consumers are willing to purchase.

The reasons for advertising agricultural products include:

1. Awareness: Advertising helps to inform consumers about the availability of agricultural products, educating them on benefits and uses.

2. Attracting Customers: It influences consumer behavior by persuading them to choose certain products over competitors, ultimately driving sales.

3. Promotions and Offers: Advertising can highlight special promotions or discounts, making the product more appealing to potential buyers.

The target market refers to the specific group of consumers that a business aims to reach with its products and marketing efforts. Identifying a target market allows for more effective marketing strategies tailored to the preferences and needs of those consumers.

Competition in marketing strategies refers to the rivalry between businesses selling similar products or services. Analyzing competitors helps businesses identify their strengths and weaknesses, enabling them to develop strategies to gain a competitive edge.

Distribution involves the methods and channels used to deliver products from producers to consumers. A well-defined distribution strategy ensures that products are available to customers at the right place and time, impacting overall sales and customer satisfaction.

For Diversification:

• Implements: More implements of different kinds needed. More expenses to buy and maintain different implements.
• Management: Manager must know about more than one production area/different products.

For Specialisation:

• Implements: Less implements of different kinds needed. Less expense to buy and maintain different implements.
• Management: Requires in-depth knowledge of one particular area, leading to being an expert.

The worker may claim under the Occupational Health and Safety Act, which protects employees from health risks associated with their duties, including exposure to harmful substances.

The farmer should implement disciplinary action against the worker for non-compliance with safety regulations. This may involve a warning or suspension, depending on the severity and circumstances.

The farmer must adhere to the following steps:

1. Investigation: Assess the situation thoroughly, confirm the non-compliance, and gather relevant information.

2. Consequence and Communication: Clearly communicate the disciplinary actions and their consequences to the worker, ensuring they understand the importance of safety.

3. Reinforcement and Support: Offer training or refresher courses on safety protocols, ensuring that all workers understand the requirements and regulations.

The objectives acquired by motivating farm workers include:

1. Increased Productivity: Motivated workers tend to be more efficient and produce higher quality work.

2. Enhanced Job Satisfaction: Motivated employees are likely to feel valued, leading to increased loyalty and reduced turnover.

3. Improved Team Cohesion: When workers are motivated, it fosters a positive work environment, promoting teamwork and collaboration.

Training is essential for:

1. Skill Development: It equips workers with necessary skills for efficient farm operations, ensuring safety and productivity.

2. Adaptation to Technology: Training helps workers become proficient in using new technologies and equipment, enhancing operational efficiency.

3. Compliance with Standards: Proper training ensures adherence to health and safety regulations, minimizing risks and liabilities.

The psychological needs of farm workers include:

1. Acceptance by Others: Workers need to feel accepted and respected by their peers and supervisors.

2. Being Acknowledged: Recognition for their hard work and contributions to the farm, fostering a sense of belonging and self-worth.