QUESTIONS

• Answer the questions below. Check your answers afterwards and do corrections.
• Give yourself one hour.
• Marks: 100

1. Choose the correct answer for each question below.

1.1 In agricultural industries the production factors are:

1. soil, land, labour and entrepreneur
2. land, labour, capital and entrepreneur
3. land and entrepreneur
4. inputs and outputs.

1.2 ONE of the following is NOT a form of capital:

1. Fixed capital
2. Working capital
3. Product capital
4.  Movable capital

1.3 Land is regarded as a safe investment because of its _______

1. durability.
2. variation in production potential.
3. restrictedness.
4. susceptibility to the law of diminishing returns.

1.4 The Act that deals with labour practices and procedures for labour disputes is the:

1. Basic Conditions of Employment Act
2. Compensation for Occupational Injuries and Diseases Act
3. Skills Development Act
4. Labour Relations Act.

1.5 A tractor is an example of ______ .

1. fixed capital
2. working capital
3. movable capital
4. credit. (5 × 2 = 10)

2. Decide whether the descriptions in the first column match (i) only, (ii) only, both (i) and (ii), or neither (i) nor (ii). Indicate your answer using these keys:
   
   1. i only
   2. ii only
   3. both i and ii
   4. neither i nor ii.(6 × 2 = 12)
      

      2.1 Restrictedness	i Soil fertility decreases with time ii Crops do well in a specific type of soil
      2.2 Ways of getting enough information on the suitability of land for production	i Soil analysis ii Soil tests
      2.3 Durability	i The life of the soil is unlimited  ii The soil regenerates
      2.4 Availability of the soil is limited	i 12% of the soil can be ploughed ii Located in a specific environment
      2.5 Consolidation of uneconomical farm units	i Similar farm units combined ii Running costs reduced
      2.6 Labour practices and procedures for labour disputes	i Basic Conditions of Employment Act ii Skills Development Act

3. Select the most appropriate definition of capital as a production factor:
   1. Capital is the budget and how you spend it.
   2. Capital is wealth accumulated through savings and employed in the production process.
   3. Capital only refers to money used in the production process. (1 × 2 = 2)
4. Differentiate between:
   4.1 assets and liabilities
   4.2 fixed capital and movable capital. (2 × 4 = 8)
5. Describe the three sources of capital and give one example of each. (3 × 3 = 9)
6. Substitute the underlined term in the following statements to make them correct.
   6.1 Labour is accumulated through saving and employed in the production process.
   6.2 The strategy in farming where farmers share common risks is called risk sharing.
   6.3 Casual labourers are employed during a particular season.
   6.4 Motivation is the management principle dealing with who will do what, when and how.
   6.5 Human resource management is the form of management that involves developing the vision, mission and objectives of a business. (5 × 1 = 5)
7. Provide FOUR conditions of service as a method of increasing labour productivity. (4)
8. List the FOUR main components or features of a good employment contract. (4)
9. Name the Act that:
   9.1 Addresses the safety of workers in the workplace (1)
   9.2 States that workers injured at work should be compensated. (1)
10. Compare a whole farm budget and an enterprise budget. (6)
11. A farm manager should be able to plan activities in advance for labour productivity.
    11.1 Briefly explain the necessity of using seasonal workers for the shearing of sheep. (3)
    11.2 Name THREE techniques that the sheep farmer can apply to manage climatic risks. (3)
    11.3 Mention THREE ways the farmer can increase labour productivity. (3)
    11.4 Suggest THREE ways the farmer can increase labour productivity. (3)
12. Farmer Brown gathered this data about the financial operations of his farm in this financial year. Study the table and answer the questions that follow.
    

    Description of item	Amount
    Bought 2 000 chicks	R2 each
    Paid for labour	R15 000
    Sold chicken manure	R19 000
    Bought chicken feeders	R10 000
    Paid for water	R2 000
    Paid for holiday from investments	R7 000
    Bought vaccines	R500

    12.1 Use the data to design a budget for Farmer Brown. (4)
    12.2 Predict the profit of Farmer Brown’s business. (3)
    12.3 Is his a viable and healthy business? Give a reason for your answer. (2)
13. Describe FOUR ways you could use to solve the problem of the shortage of farm labourers and discourage them from leaving farms and going to work in cities. (4)
14. Briefly explain the difference between permanent and temporary labourers. (6)
15. Discuss lack of skilled labour as a problem related to labour as a production factor. (7)

ANSWERS

1. Choose the correct answer:
   1.1 land, labour, capital and entrepreneur (b)
   1.2 Product capital (c)
   1.3 durability (a)
   1.4 Labour Relations Act (d)
   1.5 movable capital (c) (5 × 2 = 10)
2. Table:
   2.1 A
   2.2 C
   2.3 C
   2.4 A
   2.5 C (5 × 2 = 10)
3. Capital is wealth accumulated through savings and employed in the production process (B). (1 × 2 = 2)
4. Differentiate between:
   4.1 Assets: Items of financial value owned by the farmer; Listed in an asset registry; Should always be worth more than liabilities as they improve the net worth of a farming business; Appears in the balance sheet / Liabilities: Items (money, loans, etc.) that the farmer/business still owes other people; Should be less than assets; Appears in the balance sheet
   4.2 Fixed capital: Involves fixed assets (land, buildings); Long term credit is used to buy these capital goods / Movable capital: Working capital involves goods used in the production process (seeds, fertilisers, salaries and wages, and fuel); Short term credit can be used to buy these capital goods. (2 × 4 = 8)
5. Long-term credit: Takes a long time to repay, namely 10–35 years. It is used for big capital goods such as land, or for big projects such as the construction of buildings and dams. The source for long-term credit is the Land Bank. / Medium-term credit: Is used to buy movable capital. This usually takes about 2–10 years to repay. The sources of this finance are co-operative societies, NGOs and commercial banks. Umthombo is an NGO that provides loans to sugar cane producers. / Short-term credit: Is used as working capital to buy goods for the production process such as seeds, pesticides and fertilisers, salaries and wages, and fuel. Types of short-term credit include overdraft, credit cards and advance personal loans. The loans must be repaid within two years. Commercial banks are the source of this credit.. (3 × 3 = 9)
6. Substitute the underlined term in the following statements to make them correct.
   6.1 Capital
   6.2 pooling
   6.3 Seasonal labourers
   6.4 Planning
   6.5 Strategic management (5 × 1 = 5)
7. Appropriate wages; and a well-negotiated contract are important; secure housing must be provided with clean water and nutritious food; energy in the form of wood and paraffin or electricity is essential; workers should belong to medical aid schemes to help keep them healthy and productive; they also need paid leave to revitalise themselves; schooling (including transport) should be provided for their children (any four). (4)
8. Particulars of the employer; particulars of the employee; employment details (job description and pay); general conditions (leave, pension, etc.). (4)
9. Acts:
   9.1 Occupational Health and Safety Act (1)
   9.2 Compensation for Occupational Injuries and Diseases Act. (1)
10. Compare the following aspects and give examples:
    10.1 Whole farm budget: Incorporates budgets of all enterprises on the farm;
    Allows farmer to have overall control of the whole farm business; Spreads the risk / Enterprise budget: Concentrates on budget for each enterprise;
    Allows farmer to control the income and expenses of each enterprise; Risk is concentrated on one enterprise.
11. Planning for productivity:
    11.1 It is a seasonal activity/it only occurs at a particular season/done in October. (3)
    11.2 Provision of shelter for protection against extreme conditions; The farmer needs to find out whether climatic disasters is a common occurrence in the area (looking at historical data); Use a breed of sheep that is more adaptable to extreme climatic conditions prevalent in the area. (3)
    11.3 Enrol labourers for skills development; Organise short-term courses for labourers; Allow labourers to specialise in certain tasks. (3)
    11.4 Provide financial incentives/performance rewards; Provide adequate living conditions (adequate housing, food, recreation facilities, wages, pension, bonus, leave, medical aid); provide training possibilities; Show appreciation for work done (any three). (3)
12. Farmer Brown's budget:
    12.1 Expenses: R40 000,00 / Income: R19 000,00. (4)
    12.2 No profit: big loss of R21 000,00. (3)
    12.3 No; his expenses are far greater than his income. (2)
13. Improve salaries; improve the living conditions; provide incentives and bonuses; well-negotiated contracts are important; secure housing must be provided with clean water and nutritious food; energy in the form of wood and paraffin or electricity is essential; workers should belong to medical aid schemes to help keep them healthy and productive; they also need paid leave to revitalise themselves; schooling (including transport) should be provided for their children (any four) (4)
14. Permanent or fixed labour refers to farm workers that are employed on the farm throughout the year. They usually live on the farm and have certain rights and privileges, such as housing and food rations. Most permanent labourers are skilled. / Part-time or temporary labour refers to farm workers that do not stay permanently on the farm and do not work throughout the year. There are two types of part-time labourers: seasonal labourers – they are employed during a particular season or at peak periods to perform a particular task such as harvesting, pruning or weeding. These are repetitive tasks AND casual labourers – they are employed to do a particular task such as fencing or building. The tasks they perform are non- repetitive tasks. (6)
15. Skilled labour ensures the maximum output; low wages chase skilled people out of the farming industry; the farm industry is competing with the industries for skilled labour; most labourers are poorly educated and they lack training; modern farming methods such as precision farming are sophisticated and require skilled labourers; therefore the agricultural sector needs life-long learning programmes to ensure that labourers’ skills are up to date. (7)