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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. (5) 3.1.2 State FIVE financial strategies as part ... 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 Testing: A business plan helps to assess the feasibility of the farming venture, ensuring that it's viable before investing time and resources.
- Clarifies Goals: It clearly outlines the goals and objectives of the business, providing direction for future actions.
- Financial Resource Planning: It aids in identifying the financial needs, helping to determine how much capital is required and how to obtain it.
- Risk Management: A well-prepared plan allows the farmer to foresee potential challenges and devise strategies to mitigate risks.
- Attracting Investors: It is essential for presenting the business idea to potential investors or financial institutions to secure funding.
Step 2
State FIVE financial strategies as part of the marketing plan.
Answer
- Budgeting: Create a detailed budget that outlines expected revenues and expenses to maintain financial control.
- Market Analysis: Conduct thorough market analysis to set competitive prices and understand consumer demand.
- Diversification: Develop strategies to diversify product offerings, reducing reliance on a single source of income.
- Cost Control: Implement strategies to monitor and reduce costs, thereby increasing profit margins.
- Cash Flow Management: Establish effective cash flow management practices to ensure funds are available for operational needs.
Step 3
Identify the entrepreneurial characteristics as indicated by A, B, C and D.
Answer
A. Organizational/Coordination Abilities: The ability to delegate tasks effectively to workers based on their skills. B. Technical/Operational Knowledge: Understanding the nuances of growing crops, which is essential for effective farming. C. Innovative/Creativeness/Vision Insight: The capacity to generate new ideas and improvements for the farming enterprise. D. Perseverance: A trait that reflects determination, exemplified by continuing efforts despite setbacks like crop destruction.
Step 4
State THREE resources that an entrepreneur requires when starting a farming enterprise.
Answer
- Financial Resources: Sufficient capital for purchasing equipment, seeds, and operational costs.
- Human Resources: Skilled labor to execute various farming tasks effectively.
- Physical Resources: Necessary physical assets such as land, buildings, and machinery to support farming activities.
Step 5
Distinguish primary from secondary and tertiary agricultural sectors.
Answer
The primary agricultural sector involves the extraction of raw materials, such as growing crops and raising livestock. In contrast, the secondary agricultural sector processes these raw materials into finished products, like canned fruits. The tertiary agriculture sector provides services related to agriculture, including marketing and distribution of agricultural products.
Step 6
Step 7
State THREE advantages of farm gate marketing.
Answer
- Reduced Costs: Eliminates transportation costs associated with getting products to market.
- Direct Sales: Farmers can sell directly to consumers, increasing profit margins.
- Market Control: Farmers have more control over pricing and marketing strategies.
Step 8
State THREE disadvantages of farm gate marketing.
Answer
- Limited Reach: Farmers may face challenges in reaching a wider audience without intermediaries.
- Sales Dependence: Sales rely heavily on local demand, which can fluctuate.
- Market Competition: Farmers may encounter strong competition from other local producers.
Step 9
Use a table and distinguish between internet marketing and contract marketing.
Answer
| Aspect | Internet Marketing | Contract Marketing |
|---|---|---|
| Definition | Marketing through online platforms | Direct agreements between producers and consumers |
| Flexibility | Fluctuating prices; can change frequently | Fixed prices; contract terms are set |
| Audience Reach | Global audience; sells to anyone | Limited to pre-defined contracts and buyers |
| Obligations | Less obligation; can stop sales anytime | Obligated to fulfill contract obligations |
Step 10
State THREE functions of producer organisations in the agriculture industry.
Answer
- Market Support: Assist in the marketing of agricultural products by creating networks and platforms.
- Research and Development: Engage in research to enhance production methods and market trends.
- Advice and Training: Provide education and resources to farmers regarding best practices in agriculture.
Step 11
Name THREE advantages of marketing produce on fresh-produce markets.
Answer
- Higher Profit Margins: Farmers often receive better prices directly from consumers.
- Consumer Reach: Direct access to consumers enhances market presence.
- Immediate Payments: Faster return on investment as payments are often received at the point of sale.
Step 12
Name FOUR advantages of evaluation.
Answer
- Efficiency Improvement: Helps to identify areas for operational efficiency.
- Resource Optimization: Ensures optimal utilization of resources.
- Continuous Monitoring: Facilitates ongoing assessment of performance against goals.
- Informed Decision-Making: Provides data that aids in strategic planning and decision-making.
Step 13
List FOUR advantages of proper management regarding labour.
Answer
- Enhanced Productivity: Proper management leads to improved worker efficiency and productivity.
- Better Work Environment: Creates a positive work environment that boosts morale.
- Skill Utilization: Ensures that the right skills are matched to the right tasks.
- Reduced Turnover: Effective management contributes to lower employee turnover rates.