VHEMBE EAST DISTRICT

GRADE 12

AGRICULTURAL SCIENCES
PRODUCTION FACTORS
MARKING GUIDELINE
24 JULY 2024

MARKS: 100 DURATION: 1 ½ hours

This Marking Guideline consist of 07 pages

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Vhembe East Agricultural Sciences 2 Production Factors Topic Test/2024
Marking Guidelines

SECTION A

QUESTION 1

1.1 1.1.1 B
1.1.2 A
1.1.3 C
1.1.4 D
1.1.5 B
1.1.6 B
1.1.7 B
1.1.8 B
1.1.9 A
1.1.10 B (10 x 1) (10)

1.2 1.2.1 C
1.2.2 F
1.2.3 A
1.2.4 G 
1.2.5 H  (5)
(5 x 1)

1.3 1.3.1 Land

1.3.2 Labour productivity
1.3.3 Interest
1.3.4 Consolidation
1.3.5 Management (5 x 2) (10)

1.4 1.4.1 Depreciation

1.4.2 Labour
1.4.3 Floating/working
1.4.4 Overcapitalization
1.4.5 Credit (5 x 1) (5)

TOTAL SECTION A: 30

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 Vhembe East Agricultural Sciences 3 Production Factors Topic Test/2024
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SECTION B

QUESTION 2: PRODUCTION FACTORS

2.1 Land

2.1.1 The economic characteristic of land

The law of diminishing returns  (1)

2.1.2 Implication of the law of diminishing returns

 Output will initially increase at an increasing rate with increase of
input 
 A further increase in input will result in increased output at a
decreasing rate  (2)

2.1.3 Output response to the inputs as it increases from

 5 to 10: An input of 5 units resulted in an output of 10 units/
output increases at an increasing rate with an increase
in inputs  (1)
 10 to 15: An input of 5 units resulted in an output of 5 units/
output increases at a decreasing rate with an increase
in inputs  (1)

2.1.4 TWO measures to improve productivity of land

 Development of disease resistant cultivars/breeds 
 The use of fertilisers/manure/compost 
 Appropriate use of land/better care of agricultural land 
 Adapting to/use of scientific methods/technology/precision/
organic farming/correct cultivation methods/crop rotation 
 Consolidation of small/uneconomic farming units 
 Restoring land potential/resting land/correct land utilisation 
 Responsible application of chemicals/pesticides/herbicides 
 Mechanisation 
 Adapting to appropriate policies/legislation 
 Water provision/management/irrigation  (Any 2) (2)
2.2 Risk management strategy

2.2.1 Identification of the risk management strategy

Diversification  (1)

2.2.2 Reason
There are different production enterprises on the farm  (1)

2.2.3 Risk management strategy when production costs is distributed

equally
Risk-sharing  (1)

2.2.4 The source of risk

Production risk 
Technical risk  (Any 1) (1)

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Vhembe East Agricultural Sciences 4 Production Factors Topic Test/2024
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2.2.5 TWO management principles the farm manager can employ

 Planning 
 Organizing and coordination 
 Implementation 
 Control/monitoring  (Any 2) (2)

2.3 Contract between a farmer and a farm worker

2.3.1 Definition of a contract

A legally binding document  between the employer and employee  (2)

2.3.2 Indication of the type of farm worker

Permanent/fulltime worker  (1)

2.3.3 Reason
The contract will terminate at retirement  (1)

2.3.4 Labour legislation

(a) Number 7 - Basic Conditions of Employment Act/BCEA
(Act No. 75 of 1997)  (1)
(b) Number 8 - Occupational Health and Safety Act/OHSA
(Act No. 85 of 1993)/  (1)

2.3.5 TWO reasons that lead to the movement of farm labourers

 Poor working conditions/less leave days 
 Low wages/salaries 
 Longer working hours/ 
 Lack of protective clothing  (Any 2) (2)

2.4 Capital

2.4.1 Identification of the types of capital

A - Movable  (1)
B - Fixed  (1)
C - Working/floating/production  (1)
2.4.2 TWO methods to create more capital
 Production/own capital 
 Savings 
 Credit/loans 
 Grants  (Any 2) (2)

2.4.3 TWO problems associated with capital

 Scarcity/difficult access to capital 
 Expensive/high cost/interest rates 
 Depreciation 
 Law of diminishing returns 
 Undercapitalisation 
 Overcapitalisation 
 High risk  (Any 2) (2)

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Vhembe East Agricultural Sciences 5 Production Factors Topic Test/2024
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2.5 Balance sheet

Name of the financial statement
2.5.1 Balance sheet  (1)
2.5.2 Identification of A from the financial statement
Current/short term assets  (1)

2.5.3 Calculation of B
 R 55 000 + R 340 000 + R 570 000 
 = R 965 000  (2)

2.5.4 Calculation of the net worth

 Net worth = Total assets – Total liabilities 
 = R 1 861 000 – R 965 000 
 = R 896 000  (3)
[35]

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Vhembe East Agricultural Sciences 6 Production Factors Topic Test/2024
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QUESTION 3: PRODUCTION FACTORS

3.1 3.1.1 Meaning of the following economic characteristics of land

(a) Industrial and residential areas reduce the amount of land
available for agriculture  (1)
(b) The amount of land available for agriculture in a country does
not increase  (1)
(c) The decrease in the marginal output of a production
process  as the amount of a single factor of production is
incrementally increased,  while the amount of all other
factors of production remain constant (2)

3.1.2 Methods of increasing the productivity of land

 Consolidation of uneconomic farming units 
 Use of scientific farming methods 
 Water management 
 Use of farming methods that are suited to the area  (Any 3) (3)

3.2 3.2.1 Deduction of type of farm workers

A – Seasonal workers 
B – Permanent worker  (2)

3.2.2 Motivation for answers to QUESTION 3.2.1

A – Harvesting is a seasonal activity 
B – Office / paper work is done by a farm manager who is a
permanent employee  (2)

3.2.3 (a) Farm worker that is most likely to be exploited

Farm worker A  (1)

(b) Justification of answer to QUESTION 3.2.3 (a)

Because they are the least educated / they have less
bargaining power due lack of formal training  (1)

3.2.4 Piece of legislation that protects Farm worker A from

exploitation.
Basic Conditions of Employment Act  (1)

3.3 3.3.1 Benefits of record keeping

.
A – variable costs 
B – Overhead costs 
C – Gross margin 
D – Net profit  (4)

3.3.2 Importance of an enterprise budget

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Vhembe East Agricultural Sciences 7 Production Factors Topic Test/2024
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 Enables a farmer to determine the viability of an enterprise 

 Enterprise budgets can be used to help make decisions such as
pricing products / comparing production practices 
 Enterprise budgets can be used to develop a product mix that
matches business goals  (2)

3.4 3.4.1 Deduction of capital type

A – movable 
B – floating / running / working 
C – fixed  (3)

3.4.2 Capital item funded through medium term credit

A  (1)

3.4.3 Problems associated with capital

 Scarcity of capital 
 High interest rates / expensive capital 
 Overcapitalisation 
 Undercapitalisation 
 Depreciation  (Any 2) (2)

3.4.4 Methods of creating capital

 Savings 
 Credit 
 Production  (2)
3.5 3.5.1 Management principles expressed in the passage
 Planning 
 Implementation 
 Control  (3)
3.5.2 Management skills possessed by the manager
 Financial management skills 
 Labour management skills 
 Planning skills 
 Organisation skills (2)

3.5.3 Motivation for answers to QUESTION 3.5.2
 Financial management skills – The farmer drafted budgets
 Labour management skills - Decide which activities
are going tobe done by who  (2)
 Planning skills – Prepares production plans / drafts budgets 
 Organisation skills – Decided which activities are going to be
done by who, when and how  [35]

TOTAL SECTION B: 70
GRAND TOTAL: 100

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