(a) Distinguish between the terms loan and subsidy as used in agricultural financing. (2 marks) (b)(i) Define the term supply. (2 marks) (ii) Use the inform...

(a) Loan and subsidy

• Loan: a repayable credit, in cash or kind, granted to a farmer for agricultural purposes. It may attract interest.
• Subsidy: non-repayable financial assistance, usually provided by government, to reduce part of the cost of farm inputs or services.

(b)(i) Supply

Supply is the quantity of a commodity which producers are willing and able to offer for sale at various prices over a given period of time.

(b)(ii) Supply curve for cocoa

Plot the points (450, 10,000), (550, 15,000), (700, 20,000), (1,000, 25,000) and (1,700, 30,000), with supply on the horizontal axis and price on the vertical axis. Join the points to obtain the supply curve.

(b)(iii) Relationship between price and supply

The supply curve slopes upwards from left to right. This shows a direct relationship between price and quantity supplied: as the price of cocoa rises from Le10,000 to Le30,000, quantity supplied rises from 450 tonnes to 1,700 tonnes. Conversely, a lower price leads to a lower quantity supplied.

(c) Farm and home visits in agricultural extension

Advantages

1. The extension worker obtains first-hand knowledge of the farmer's farm and the actual problems faced.
2. It promotes personal contact, goodwill, confidence and mutual trust between the farmer and the extension worker.

Disadvantages

1. It is expensive and time-consuming, especially where farms are widely scattered.
2. Only a few farmers can be reached at a time.

(d) Characteristics of agricultural produce in marketing

1. Perishability: many agricultural products spoil rapidly after harvest.
2. Seasonality: production is seasonal, causing fluctuations in supply and price.
3. Bulkiness: many products are bulky and costly to transport and store.