SUBJECT: AGRICULTURAL SCIENCES

PRODUCTION FACTORS

GRADE 12

2022 WINTER CLASSSES

TEACHER AND LEARNER CONTENT MANUAL

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 AGRICULTURAL SCIENCES
DAY Week 1 Week 2
GENETICS PRODUCTION FACTORS
PRE-TEST ( 1hr ) PRE - TEST
Genetics Terminology LAND
1. MONOHYBRID INHERITANCE Law of diminishing returns
Class work - Activity 1 in JENN manual Classwork - Activity in JENN manual
Homework Activity 2 in JENN manual Homework- Activity in JENN manual
Homework – PEER marking and sign Homework - PEER marking and sign
DIHYBRID INHERITANCE LABOUR
Quantitative and Qualitative characteristics Classwork - Activity in JENN manual
Class activity-Activity
2 PATTERN OF INHERITANCE
Concepts related – oral activity Legislation, Acts and their purposes
Sex chromosomes and Sex- linked characteristics (Examples
Homework - Activity in JENN manual Homework - Activity in JENN manual
Homework- PEER marking and sign Homework - PEER marking and sign
VARIATION
MUTATION CAPITAL
3 SELECTION
Classwork - Activity in JENN manual Classwork - Activity in JENN manual
Homework - Activity in JENN manual Homework - Activity in JENN manual
Homework- PEER marking and sign Homework - PEER marking and sign
BREEDING SYSTEMS (Concepts & Examples) MANAGEMENT
4 Classwork - Activity in JENN manual Classwork- Activity in JENN manual
Homework - Activity in JENN manual Homework- Activity in JENN manual
Homework - PEER marking and sign POST – ASSESSMENT
GENETIC ENGINEERING GMOs( concepts and More assessment and Support
5 examples)
Classwork - Activity in JENN manual
Homework - Activity in JENN manual

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 AGRICULTURAL PRODUCTION FACTORS

Economists generally divide the four factors of production into four which are:

Land

Labour

Capital

Management/Entrepreneurship.

LAND

Land as a production factor

Land Has Different Functions Which Include the Following:

Terminology:
Land: A piece of ground that can be used for building or agricultural production.
Law of diminishing returns: If there is an increase of the input in the production process,
the output will increase but a point will be reached where further increase in the input will
result in the decline of the output

Economic Functions of Land/Soil:

• Provides physical space for human settlements
• Supplies raw materials
• Supplies food, fibre, and fuel.

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• Supplies raw materials
• Used as a collateral in funding

Economic characteristics:
• Availability of Agricultural Land is limited. The quality of soil in South Africa is poor
• Differences in production potential. Soil differs with respect to its production capacity.
• Durability/long lasting and the life of a soil is unlimited if it is correctly utilised.
• Soil is indestructible although soil structure and fertility can be destroyed when incorrect
cultivation methods are used
• Subject to Law of Diminishing Returns meaning soil has a maximum production limit and
maximum yield is determined by soil’s physical properties.

Graph illustrating the Law of Diminishing Returns

Provisions for Increasing soil productivity:

• Improving water management/ use of drip irrigation/central pivot system
Irrigation/building dams etc
• Consolidation of uneconomical farm units because production cost per unit on small units
is high.
• Changing cropping practices and farming systems/select crops that are suited to conditions
in that area.
• Restoring land potential-application of organic manures
• Farming land more efficiently/use of latest scientific methods

Problems Related to Soil:

• Subject to the Law of Diminishing Returns
• Physical composition cannot be changed

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• Restriction of diversification

Class Activity 1: Land

Answer the following questions based on the diagram below

1 CHALLENGES TO AGRICULTURAL FACTORS OF PRODUCTION

In many places the soil productivity has been improved by irrigation systems,
careful use of fertilisers and good environmental management so that more
products can be grown on the same amount, or even on less, land.
This has resulted in higher crop yields and reduced pressure on agricultural
land, and because less land is required to produce what previously required a
large area.

1.1.1 Name TWO factors of production used in the picture above. (2)

1.1.2 Identify an economic characteristic of land as a production factor in the picture above. (1)

1.1.3 State a problem associated with land as a production factor in the passage above. (1)

1.1.4 State THREE provisions made to improve the productivity of land by referring to the

passage above. (3)

1.1.5 Mention TWO problems associated with Agricultural Land. (2)

2.1.1 Identify an economic characteristic of land that will be negatively affected by

monoculture and continuous cultivation. (1)

2.1.2 State THREE other economic characteristics of land. (3)

2.1.3 Name TWO methods that can be used to improve the productivity of land. (2)

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2.1.3 Define land (2)

2.1.4 Write down FOUR functions of land as a production factor . (4)

2.1.5 Define the Law of diminishing returns (3)

2.1.6 State TWO problems related to land. (2)

[25]

LABOUR
Terminology:
Labour: Physical or mental process which is applied in the workplace with the expectation of
being paid or remunerated a wage or a salary.
Casual Labour: Labour that works less than 24 hours per month
Permanent labour: A labour whose job is there throughout the year. They are full time
workers.

Temporary labour: Labour whose job is only during a certain period of the year

Contract: A formal and legal binding agreement between the employer and the employee.
Health and Disability Insurance: It is the type of insurance where workers are insured
against disability or sickness.
People/human risks: This takes place when the skill is lost due to death, disability, divorce,
illness etc.
Planning: A process that involves deciding what to do, when to it how to do it and who is
going to do it.
Salary: Remuneration for skilled workers who are permanent workers.
Skilled labour: Labour that knows how to do the job, they may be permanent or temporary
Unskilled labour: Labour not specialised on how to do the job, may be permanent or
temporary
Wage: Remuneration for unskilled workers who are usually temporary.

Different Types of Labour in Agriculture:

• Casual – work less than 24 hrs p/m
• Part-time - (less than ordinary hours)
• Seasonal – peak periods
• Temporary – stand in for other e.g., on sick leave
• Permanent – full-time (work ordinary hours)

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• Skilled labour-Workers who can offer special services, meaning they have been trained in a
particular skill or skills. e.g., farmers with tertiary qualifications, economists and
agricultural economists.
• Semi-Skilled labour- they have a certain level of training . Often such workers have formal
education up to Grade 12 Level. e.g., unqualified mechanics, drivers of agricultural
vehicles.
• Unskilled labour-workers who have no formal skills or training. e.g. sheep shearing
,herders and shepherds

Problems Associated with Labour:

• Shortage of labour- In South Africa, workers migrate from rural areas to cities.
• Industrial competition – workers think jobs in industry are much more rewarding than
farm jobs.
• Lack of skills-Many farm workers are not skilled
• Ineffective labour management- some farmers lack labour management skills resulting in
friction between the farmer and employees.
• HIV /AIDS- Days may be lost due to farm workers being ill and absent from work because
of HIV/AIDS.

Methods of Increasing Labour Productivity:

• Increasing economic conditions of workers-provision of incentives, bonuses, etc
• Improving educational conditions to make workers more efficient leading to increased
productivity
• Addressing HIV/AIDS to prevent loss of working time.
• Improving environmental conditions like housing for workers will make workers more
productive.
• Managing labour
• Physical farm planning of the farm and its activities to obtain ideal productivity of farm
labourers
• Economic planning of the farm to form economic units to ensure satisfactory utilisation
of farm labour.
• Planning for production process and its activities to ensure best productivity of farm
labourers.
• Daily planning of activities to ensure each worker knows exactly what he/she must do on
a particular day.
• Supervision is important to see that the work done by the labourers and to control work
which has been done by labourers.
• Efficient mechanisation to maximise labour productivity

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 Increasing labour productivity
Labour Legislation:
• Labour Relations Act 66 of 1995. Act aims to promote economic development, social
justice, labour, peace and democracy at workplace peace and democracy at workplace.
• Basic Conditions of Employment Act 75 and Amendments of 1997 - The Law applies to all
employers and employees. Act regulates leave, working hours, employment contracts,
payslips, etc.
• Occupational Health and Safety Act 85 of 1993. – The Act provides safety and health of
workers at work and for the health and safety of persons in connection with machines
and plants.
• Compensation for occupational injuries and diseases Act 130 of 1993.The Act seeks to
provide and regulate health and safety at work for all workers.
• Skills Development Act 97 of 1997 of 1998. Act aims to provide for the financing of skill
• Development by means of a levy-grant scheme and a National Skills Fund; to provide
and regulate employment services.

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 Farm workers march for basic rights.

Labour Contracts:
A typical labour contract will have the following information:
• Employer & employee details.
• Place of work.
• Conditions of termination
• Wages, allowances, benefits.
• Working hours.
• Signatures.

Class Activity 2: Labour

1.1.1 Write down FOUR different types of Labour in Agriculture (4)

1.1.2 Explain how the farmer will increase labour motivation and productivity under the following
headings:

(a) Training (2)

(b) Social conditions (2)

(c) Economic conditions (2)

2.1.

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 CONTRACT OF EMPLOYMENT

1. Particulars of employer: NEMUKULA

2. Name: MUTANGWE
3. ID: 5971909396990
4. Particulars of employee:
4.1 Name: MUDILIZI
4.2 ID: 650823765935
5. Job title: SPRAY OPERATOR
6. Duration of contract: 1 February 2018 to retirement
7. Mode of payment: MONTHLY SALARY BY CHEQUE
8. Amount: R3 500
9. Terms of employment:
9.1 Working hours: 07:00 to 17:00
9.2 Leave: One week paid leave per annum
10. Protective clothing: None

Signature:………………………… Date: 01/02/2018 at: MUTANGWE FARM

(employee – farm worker)

Signature:………………………… Date: 01/02/2018 at: MUTANGWE

(employer – farmer owner)

2.1.1 Indicate the type of farm worker who signed the contract above. Justify your answer. (3)

2.1.2 Select an item from the contract of employment above that relates to the following labour
legislation:

Basic Conditions of Employment Act, 1997 (Act 75 of 1997) (1)

Occupational Health and Safety Act, 1993 (Act 85 of 1993) (1)

2.1.3 Identify an aspect in the contract of employment that contributes to the problem of the
scarcity of farm labour. Motivate your answer (2)

2.1.4 State TWO problems related to labour on farms. (2)

2.1.5 Write down THREE methods of increasing labour productivity. (3)

2.1.6 Differentiate the following types of labour in Agriculture:

(a) Casual labour (1)

(b) Seasonal labour (1)

(c) Skilled labour (1)

[25]

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 CAPITAL
Terminology:
Assets: Things that you own that have a financial value
Balance sheet: It is a sheet that summarises the assets and liabilities of a business

Budget: An estimate/projection of costs, revenue (income and expenditure) regarding

foreseeable situations/ financial that shows how income will be generated and how it will
be spent.

Capital: Money or assets that are used for production purposes. / Wealth accumulated
through savings that is employed in the production process

Cash analysis book: Type of a book used to record money coming to the farm and money
going out of the farm

Cash flow: It is the movement of money/cash in or outside the business enterprise

Cash flow budget statement: Is the budget for the whole farm and all the enterprises in the
farm.

Types of Capital:
• Fixed capital-Capital invested in fixed assets. Includes buildings, land, dams.
• Movable capital – capital invested in medium term assets. e.g., vehicles, machinery,
livestock.
• Working capital (short term / floating) – capital invested in short term assts. e.g.,
fertilisers, fuel, chemicals, seed.

Creating Capital:
• Production. profit from farming which can be invested in buying inputs for the
following season.
• Savings- accumulated savings could be invested in fixed improvements or new
equipment.
• Credit, loans, and grants- A farmer may apply for credit from suppliers or for a loan
from financial institutions.

Sources of Finance:
• Commercial banks (FNB, ABSA, Standard Bank) generally supply credit to the public,
subject to the ability of the farmer to pay back the loan.
• Financial institutions e.g., Land Bank or Ithala Development Finance Corporation
Limited.
• A trust company.
• A potential business partners.

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 • Agricultural Cooperatives and Agribusiness mainly for credit inputs.

Problems Associated with Capital:

• Scarcity - capital is scarce, therefore t makes economic sense to rent certain services.
• Overcapitalisation - when too much money is invested in relation to other
production factors which may lead to loss in profit.
• Undercapitalization - when too little capital is invested in the farming enterprise
with the result that soil, and labour cannot be fully utilised and maximum profit
cannot be realised.
• Cost - capital goods are expensive, and it is costly to borrow money to invest in
capital goods.
• Depreciation – most capital goods have a limited life span and replaced over time
because they are subjected to tear and wear.

Components of a Cash Flow Statement:

• Income
• Expenditure
• Profit or loss
• Opening balance
• Closing balance
• Contains only cash items

Financial Management Systems:

These allow the farmer to:

• Manage farm capital
• Analyse past and current performance of the farm business
• Draw up a budget
• Plan for the future of the business
• Provide information for tax purposes
• Provide proof of payment.
• Apply for a loan from a bank or financial institution.

Financial management systems include:

• Keeping inventory of assets records.

• Keeping cash analysis book.
• Preparing a balanced sheet.
• Preparing an income statement.
• Analysing and comparing financial results.
• Keeping an inventory (record of assets)

Types of Assets:

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 • Current Assets- assets that will usually be sold or used within one year( e.g., money
in bank account, available stock on hand.
• Movable Assets- assets with life span of 1-10 years. e.g., breeding stock, and
breeding stock.
• Fixed Assets- assets used for more than one production cycle (e.g., land and
buildings).

Keeping a Cash Analysis Book:

• Used to record receipts (money coming in) and payments (money going out) in
details.
• Transactions are recorded daily and then summarised at the end of each month

Budgets:
• Enterprise budget caters for one enterprise at a time
• Whole farm budget caters for all farm enterprises
• Partial budget investigates effect on profitability when changing farm operations
e.g., buying a combine harvester

The following is a budget for a rose producer. The roses are produced by an emerging
small-scale farmer who set up this enterprise as part of an Agric-BEE initiative. The
production of roses takes place in a greenhouse on a small holding.
The budget below shows estimates for the 2009/2010 financial year. The fixed capital
budget is not included.

Preparing a Cash Flow Statement:

• Cashflow is the movement of funds through a business.
• Represented by receipts and payments during a given period
• It is possible to prepare a cashflow statement with the past available financial
records.

Components of a Cash Flow Statement:

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 • Income: Money that an individual or business receives in exchange of the sale of
goods or exchange of for providing a good or service.
• Expenditure: Payment made for goods and services (e.g., salaries, wages and inputs)
• Profit or loss: It is defined as income minus the expenses/ difference between
income and expenditure.
• Opening balance: It is the amount of money in a bank account when it is opened/
the amount of money that is available in the bank when starting a month or a year
• Closing balance: It is the amount remaining in an account at the end of the
accounting period.
• Cash items: The statement only contains cash items, and not items such as
depreciation and transfers.

Main Aspects of a Cash Flow Budget Statement:

• Cash Flow Budget Statement: It is a projection and shows anticipated income and
expenditure, profit, or loss of an enterprise.
• It is an estimate of all cash receipts and all cash expenditures expected to occur
during a certain period.
• Cash flow statement: It involves receipts and payments that took place over a given
period.

Preparing a Balance Sheet:

• This is a summary of assets and liabilities

• Assets and liabilities are grouped according to their lifespan.
• Assets are categorised as long-term (for example, land and buildings). Medium term
(for example, breeding livestock, vehicles, and fixed investments in the bank). Short-
term or current (for example, cash, inputs, and saleable products, such as bags of
seed potatoes).
• Liabilities are categorised as long-term (for example, bonds on property being paid
off over 10 or more years), medium-term (for example, loans to be repaid between
1-10 years) or short-term or current (for example, bank overdraft or production
loans).
• The balance sheet determines the net worth of the business.
• Net worth is the difference between the value of assets and the value of liabilities
(that is net worth = assets – liabilities)
• A sample balance sheet is below

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 Assets Rand Liabilities Rand

Current Assets 25 000.00 Current Liabilities

Positive bank balance 5 000.00 Sundry creditors 25 000.00
Sundry debtors 40 000.00 Production loans (<1 year) 50 000.00
Farm products for sale 60 000.00 Bank overdraft
Feed supplies on hand 25 000.00
Growing crops 50 000.00
Livestock ready for sale
Total Current Assets 205 000.00 Total Current Liabilities 75 000.00

Medium Term Assets Medium Term Liabilities

Machinery 500 000.00 Vehicle finance 150 000.00
Equipment 100 000.00 Loans 2 – 10 years
Breeding livestock 250 000.00
Vehicles 200 000.00
Total medium-term assets 1 050 000.00 Total medium-term 150 000.00
liabilities

Long Term Assets Long Term Liabilities

Real Estate (farmland) 2 000 000.00 Bond on farmland 1 000 000.00
Buildings 1 000 000.00 Loans > 10 years
Other investments 500 000.00
Total long-term assets 3 500 000.00 Total long-term liabilities 1 000 000.00

Total Assets 4 756 000.00 Total liabilities 1 225 000.00

Net worth 3 530 000.00

Preparing an Income Statement:

• It is a summary of all income and expenditure for a specific period (the financial
year).
• It shows how the money received from the sale of products and services (revenue) is
transformed into net income (or net profit) once expenses are deducted.
• A sample Income Statement is below

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 Income Statement for the Period 01.03.2017 – 28.02.2018

Farm Income R
Beef sales 105 000
Dry bean sales 19 000
Maize sales 38 050
Total income 162 050

Farm Expenditure
Electricity and water 15 200
Bank charges 2000
Marketing costs 22 288
Feed 32186
Seed and seedlings 21880
Telephone 3000
Rent 5 000
Contractor costs 1 900
Livestock purchased 8 500
Fertiliser and lime 14 470
Herbicides and pesticides 17 000
Hired transport 2 500
Labour costs (wages) 59400
Fuel, oil and grease 33 376
Insurance and licenses 15 560
Repairs to fixed improvements 2160
Other crop costs 400
Total expenditure 234940

Profit/Loss (net cash income) for the year -72890

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Class Activity 3: Capital

A family in a rural area of the country decided to pursue farming. The father worked for a
construction company for 20 years and received a pension package of R189 000,00 which he
invested in land to start the farming enterprise. The family had too little capital and they
approached the Vukuzenzele Trust for a grant. They were given a total of R80 000,00.

The family used this grant to purchase an irrigation system for R7 000,00 and a tractor for
R58 000,00. R15 000,00 was used for pesticides, seeds and fertilisers.

1.1.1 Tabulate THREE forms of capital used by the family and give an example of each from
the case study above. (3)
1.1.2 Name TWO sources of capital used by the family and give an example of each from the
case study above. (2)
1.1.3 Define the net worth of a farming enterprise (2)
1.1.4 Distinguish between the following pairs of terms:
(a) Fixed and variable assets (4)
(b) Income and expenditure (4)
(c) Assets and liabilities (4)
(d) Fixed and variable costs (4)
1.1.5 Mention TWO sources of capital (2)

[25]

MANAGEMENT/ENTREPRENEURSHIP

Terminology:

Management: Involves organisation and coordination of activities (human, and

financial) of a business.

Business management skills: This will involve short term and long-term planning.

Communication skills: The skills of communication which is good for all the workers on the
farm.

Control: Involves checking and verification of the results of the decision making.

External forces: Are forces that the manager has little or no control over them.

Farm Management: Farm management involves a day-to-day organization and

coordination of resources.

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Financial Management skills: The skills wherein the manager is well vested on financial
matters regarding borrowing, investing and full understanding regarding taxation so as to
regard against financial losses.

Internal forces: These are forces that originate on the farm itself.

Leading: Involves giving direction, guidance and setting the plan to motion

Legal risks: The types of risks when the manger is taken to court for having ignored some
regulatory standard on the farm.

Legislation: A law or set of laws made by the government.

Farm Management:

• About applying business principles and the scientific principles of agriculture to the
farm business.
• Two components of farm management:
(a) day-to-day farm management, and
(b) long-term strategic farm management.

Management Principles for Farmers:

• Planning: the farmer decides what to do, when to do it and who is responsible for
doing it. e.g., financial planning, and market planning.
• Implementation: the farmer gives direction, guidance and making sure the plan is
put in motion.
• Control: the farmer checks results against previous performance. The farmer can
delegate control and it must lead to changes if results are not as expected.
• Communicating: the farmer communicates with staff (for example giving
instructions), suppliers (for example negotiating prices), competitors (for example,
investigating opportunities to market collectively), and markets (regarding amounts
they require).
• Organisation and Coordination: the farmer allocates resources for farm activities. It
involves putting together physical, human, and financial resources for the farmer.

General Management Skills Needed to Manage a Farming Business:

Conceptual skill: The manager must be able to reflect on changes in the farming industry
and come out with strategies to address them effectively.
Ability to apply new knowledge: This refers to the farm managers ability to ability seek and
process information and forecast future demands and price trends

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Analytical skills: Farm manager must be able to analyse market information such current
maize prices on Johannesburg Stock Exchange (J.S.E) and global trends such as the war in
Ukraine and its effect on grain prices.
Planning Skills: Planning is very critical for everyday management of a farm.
Financial Management Skills: A farm manger needs to have good record keeping skills, good
accounting systems and a deep knowledge of factors surrounding borrowing funds and
investing capital, taxation, and insurance.
Communication Skills: Farm managers need to know how to interact well with various
stakeholders in his farming business.
Problem solving skills: A good farm manger must be proactive to prevent potential
problems and prevent them from happening. The source of a problem must be Identified
and dealt with fairly.
Decision making skills: Dealing with risk, change and responsibility are necessary to enable
a manager, arrive at correct decisions.

Steps in the Planning Process:

• Planning
• Implementation
• Measuring and recording results
• Comparing performance against results
• Analysis and refinement of the plan.

Forces affecting business

Several forces affect farming business. These can be categorised into:
a. Internal Forces, and
b. External Forces.

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Internal Forces Can Make a Business Succeed or Collapse:
Internal forces originate from the farm. Some of the internal factors include the following:
1. The farm’s financial position (whether strong or weak, debts, credits, and cash flow).
2. Resources such as equipment, water, equipment, and machinery.
3. Whether management is competent and capable of handling issues on the farm.
4. The organogram/Organisational Structure of the farm and the farms culture are
other examples of internal forces.

External Forces include the following

1. Political forces: Acquisition of land for farming, market restrictions, war all affect
faming business.
2. Economic forces: Both macro-economic and micro-economic factors affect farming
business. Examples are inflation rate, whether credit is available, taxation levels,
interest rates and currency exchange rates.
3. Socio-economic forces: Population demographics, gender, can lead to customers’
needs and wants. Level of education, culture and education all affect customers’
needs and wants.
4. Ethical forces: People see what businesses do as right or wrong. Child farm labour
issues tend to influence customers perception about companies which might lead to
decline in sales. Competitive forces, Technological forces and Environmental forces
are other external forces affecting businesses.

Strategic management (Long-term management)

This makes a provision for business to anticipate and modify challenges that might arise.
Components of strategic management
These include developing a vision and mission and setting goals and realistic objectives.

Primary Sources of Risk in Farming Business:

There are risks to farming business
1 Some primary risks include Marketing Risk: Risk coming from uncertainty in the
agricultural marker for a particular agricultural product. Farmers are not sure about
the price they will receive when the product is ready to be sold. Market could also be
lost due to some unexpected happenings. For example, fruit exports to Ukraine and
Russia by South Africa Farmers after Russia invasion oof Ukraine have stalled because
of war.
2 Production Risk: It relates to the possibility of your yield will be lower than expected.
Weather, pests and diseases, natural hazards such as floods, drought, heart waves,
hailstorms, high winds, etc create uncertainty in the farming business. Planning and
managing such risks are difficult because they are unpredictable.
3 Financial Risks. Farmers need to borrow money to finance their farming business. This
creates an obligation on farmers to repay debt in time. Farmers therefore need to
manage their cash flow efficiently. Interest rates are also high and this compounds the
problem for the farmers.
4 Human or personal risk: Factors such as death, divorce, illness, accidents are personal
crises that can threaten farm business.

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 Impact of drought in Western Cape

Strategies to manage risks in farming:

Some of the most important risk management strategies in farming include:

Diversification of risk: this involves spreading the risks for example growing different crops
as well as rearing livestock. The reasoning behind this is that when crop production fails, the
farmer will rely on proceeds from livestock farming as a source of income. Diversification is
how a farmer can spread his/her risk over several enterprises.

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Mixing crops and livestock to mitigate against risk:
Insurance: Crops can be insured against risks posed by weather conditions which can have
catastrophic impact on farmers income. SANTAM is one of the companies which insure
farming business in South Africa.
Futures Contract: It is a legal agreement to buy or sell a particular asset, or security at a
predetermined price at a specified time in the future. Grain producers in South Africa use it
to minimise risk in their farming business.
Specialisation : A farmer can choose one enterprise and specialises in it. Specialisation
enables farmers to know almost everything about a product. For example, management of
diseases and pests for maize are different for tomatoes. Specialising in maize production will
afford the maize farmer better understand and deal with potential problems with maize
production.
Flexibility in farming . Using a multipurpose building on a farm for different purposes can
help reduce risk

Scan and view a video on production factors

Class Activity 4: Management

1.1.1 There are sources of risks in farming business. Mention 4. (4)

1.1.2 Explain THREE measures a farmer can use to diversify the risks in agriculture (6)

1.1.3 Give TWO reasons for developing a business strategy. (2)

2.1

A family fruit tree business was started on 34 hectares (ha). It was

later scaled down to 12 hectares and is now very successful. This
success can be attributed to the introduction of pigs, chickens, and
sheep to the farm. The waste from these animals is used to make
compost. The business also buys surplus fruit from neighbouring
farms to make dried fruit and jam. Five guest cottages have been
built on the farm. The kitchen waste from the guest cottages is used
for the compost-from-worms project on the farm.

2.1.1 Identify the risk management strategy employed by this family business (1)
2.1.2 Give ONE reason for the answer to QUESTION 2.1.1. (1)
2.1.3 Suggest TWO primary sources of risk in a farming business (2)

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3.1 State the general business management skills applied by the manager of the family
business in the following situations:
(a) The smooth functioning of the different enterprises of the family business with the same
work force. (1)
(b) Processing and analysing the market information and realising there was a greater
demand for organic products in the global markets (1)
(c) Developing positive relations with workers, suppliers the markets (1)

3.1.1 Name and briefly explain FOUR Management principles/components. (4)

3.1.2 Explain how efficient planning by a farm manager can improve day-to-day planning (2)
[25]

Acknowledgements
1 Laing C.E, and Mavovana (2005). Agricultural Science Grades 11 and 12. SAYDBUC
2 Department of Basic Education (2019) . MTG Chaper4 . Agricultural Production Factors.
3 Department of Basic Education. https://www.education.gov.za. Past Examination
questions. Date accessed27th May 2022.06.14
4 de Fontaine J, Khumalo,F, Lambrechts. Letty B, Morrison K, Strydom L, Tshabang T.A.
Focus on Agricultural Sciences Gade 12. Maskew Miller .2013

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