(a) State two methods of calculating depreciation of farm machines. (b) List four roles of capital in agricultural production. (c) Explain five major roles ...

(a) Two methods of calculating depreciation of farm machines [2 marks]

• Straight-line method (equal instalment method).
• Reducing (declining) balance method. (Others include the sum-of-the-years'-digits and revaluation methods.)

For example, by the straight-line method,

\[\text{Annual depreciation} = \frac{\text{Cost} - \text{Salvage value}}{\text{Estimated useful life (years)}}.\]

(b) Four roles of capital in agricultural production [4 marks]

• It is used to buy land, machinery, tools and farm buildings (fixed assets).
• It is used to purchase inputs such as seeds, fertilizers, feeds and agro-chemicals.
• It is used to pay wages to hired labour and to hire services.
• It provides working funds for storage, processing, transport and marketing of produce.

(c) Five major roles of middlemen in marketing agricultural produce [5 marks]

• Assembling/buying: they gather (bulk) produce from many scattered small farmers into large quantities.
• Transportation: they move the produce from the farms/production areas to the markets and consumers.
• Storage: they store produce and make it available throughout the year, evening out seasonal supply.
• Processing and grading: they process, grade, package and preserve the produce to add value and meet consumer needs.
• Financing and risk-bearing: they provide finance (sometimes advance money/credit to farmers) and bear the risks of price change, spoilage and loss; they also distribute the produce and pass market information to farmers.