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2 marksFarm Organisation and Planning

CSEC Agricultural Science · May/June 2013 · Paper 2 · Question 7(b)(iv)

Farmer Mary plans to produce sweet potatoes on 10 hectares and considers purchasing a tractor instead of hiring tractor services at $110 per hectare. Table 1 shows her budget projections.

Mary also decides that she will rent her tractor at a cost of $100 per hectare to the other farmers in her district, who farm on a total of 50 hectares. Calculate the additional income that Mary will gain from renting the tractor to the other farmers. (Show your working.)

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Other parts of this question

  1. 7(a)State THREE subsidies or incentives that the government could provide to farmers to encourage the expansion of cassava production.[3 marks]
  2. 7(b)(i)What type of budget should Mary do for the change in her plans, that is, to buy a tractor instead of hiring a tractor?[1 mark]
  3. 7(b)(ii)Identify TWO fixed costs and TWO variable costs in Table 1.[3 marks]
  4. 7(b)(iii)Calculate the annual depreciation on the tractor, using the following formula: (Cost of tractor - net disposable value of tractor) / 5 = Depreciation[1 mark]
  5. 7(b)(v)Calculate net change in profit or loss, using the following formula: Net change in profit/loss = Additional Income calculated in (iv) - Additional Costs (shown…[2 marks]

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