Calculator Allowed: Yes
Transcription of this question: 3.PedroPedro is a farmer who operates as a sole trader in a developing country. Like other farmers in hiscommunity, he grows oranges, which are sold to buyers in developed communities and large cities.Working in the primary sector often results in very low income and poverty for some of the farmers.Most children do not go to school, as they are needed in the fields for manual work. Cooperationbetween the farmers in this community is very limited due to linguistic and cultural differences.Recently, farmers’ incomes have fallen further. Pedro has conducted social, technological,economic, environmental, political, legal and ethical (STEEPLE) analysis and identified two mainexternal threats that are impacting on farmers’ incomes:competition from orange producers from developed communities and large cities with improvedtechnology and higher productivity rates• a severe and sustained drought affecting the level of orange production in all developingcountries.Pedro would like to improve productivity as an orange producer. Investing in new technology isrisky and would require extensive research and development. The internet is unreliable and Pedrois unable to raise funds for this investment himself to change current production methods.Pedro has arranged an emergency meeting of local farmers. He proposes that all farmers in hiscommunity create an agricultural cooperative and collectively raise funds to invest in newcapital-intensive farrning methods. The investment in technology could allow them to diversify intothe manufacturing of bottled orange juice drinks.(a)(b)(c)(d)Define the term productivity rate.Explain how each of the two external threats arising from the STEEPLE analysis wouldhave impacted on farmers’ incomes in the developing world.Explain one cost and one benefit to Pedro of conducting extensive research anddevelopment.Examine Pedro’s proposal to create an agricultural cooperative in his community ratherthan continuing to operate as a sole trader.