ACJC H1 Prelim 2024 QP

ANGLO-CHINESE JUNIOR COLLEGE 2024 JC2 PRELIMINARY EXAMINATIONS ECONOMICS 8843/01 Higher 1 Paper 1 19 August 2024 3 hours Additional materials: Writing papers and Cover sheet X 2 READ THESE INSTRUCTIONS FIRST Write your exam index number and name on all the answers you hand in. Write in dark blue or black ink pen on both sides of the paper. You may use a soft pencil for any diagrams, graphs or rough working. Do not use staples, paper clips, highlighters, glue or correction fluid / tape in your answers. Answer all questions. Begin Question 2 on a fresh sheet of writing paper. At the end of the examination, arrange your answers in order. Fasten your answers for Question 1 and Question 2 separately using the cover sheets provided. The number of marks is given in brackets [ ] at the end of each question or part question. This document consists of 8 printed pages (including this page). Please check that your question paper is complete.

2 ©ACJC 2024 Preliminary Exam 8843/01 Answer all questions Question 1: Food Security and Challenges Table 1: Global Food Commodity Prices The Food and Agriculture Organisation Food Price Index (FFPI) is a measure of the monthly change in international prices of a basket of food commodities. The table below shows the five commodity groups – food, meat, dairy, cereal, vegetable oil and sugar. Their respective price index is the average price indices over 2017 to 2022. Food Price Index Meat Price Index Dairy Price Index Cereal Price Index Vegetable Oil Price Index Sugar Price Index 2017 98.0 97.7 108.0 91.0 101.9 99.1 2018 95.9 94.9 107.3 100.8 87.8 77.4 2019 95.1 100.0 102.8 96.6 83.2 78.6 2020 98.1 95.5 101.8 103.1 99.4 79.5 2021 125.8 107.9 119.6 131.2 164.9 109.3 2022 144.7 118.8 149.5 154.7 187.8 114.5 Source: Food and Agriculture Organization of the United Nations Extract 1: Why are global food prices near an all-time high? Higher global food prices are contributing to a wider trend of increased cost -of-living in both advanced and emerging economies. The annual rate of inflation worldwide is 9.2%, driven by a surge in energy as well as food prices. Prior to the Russia-Ukraine war, droughts and Covid-19 restrictions have driven up global food prices. The price hike worsens after the war, as the combined supply from both Russia and Ukraine is around 30% of global wheat exports and around a fifth of the world’s maize supply. To make matters worse, farming activities, including irrigation and transportation of agricultural machinery, rely heavily on energy sources like diesel and natural gas. Therefore, rising energy prices directly translate to higher pr oduction costs, ultimately reflected in food prices . At the same time, due to longer lifespan, the world’s population has grown exponentially over the last few decades. The increased chaos in global food markets has led to a new problem: food protectionism. Some governments have clamped down on exports of staples including grains and cooking oil to safeguard supplies for domestic consumption. Apart from export quotas, threat of domestic social unrest has led to other forms of export restrictions such as taxes and outright bans. These policies have a severe impact on the developing countries that depend on international markets for food imports. Source: World Economic Forum, 12 May 2022

3 ©ACJC 2024 Preliminary Exam 8843/01 Extract 2: A sustainable food system for Singapore and beyond Singapore is vulnerable to supply shocks and disruptions as the country imports more than 90 per cent of its food. For greater resilience, the government has set a “30 by 30” goal – to be able to produce 30 per cent of the country’s nutritional needs by 2030. With climate change posing challenges to food production, Singapore’s agri -food industry sees the need to devote more resources to local food production despite Singapore’s limited land space. As the country journeys towards her “30 by 30” goal, carving out land spaces and innovation technology will be key enablers. To boost local food production, the government has expanded the Agri-food Cluster Transformation (ACT) Fund to cover more types of food and technology. To encourage innovation through Research and Development (R&D) projects in areas like improving the disease resistance and nutritional quality of crops and fish, the Singapore Food Story R&D programme was launched in 2019. Since then, 40 projects have been given funding. Source: Singapore Food Agency, 11 November 2022 Extract 3: What is the problem with meat production and consumption? Despite the recent popularity of plant-based diets, the world is on track to consume more meat, largely due to population growth and consumers regarding meat consumption as an important part of their diet. To meet the rising demand, farmers are rearing more livestock. However, rearing livestock accounts for more than one -third of global greenhouse gas emissions. Greenhouse gas emissions can be harmful as it contributes to climate change and global warming. Fresh water is also necessary for the rearing of livestock and as of now, more than 70% of the world’s fresh water has been used up. Sources of fresh water include melted icebergs, natural precipitation such as rainfall and groundwater found in rivers and lakes. While rainfall precipitation may top up the earth’s supply of fresh water, scientists are worried about the impact of the worsening global warming on the future supply of fresh water. The trajectory of meat consumption has left both environmentalists and economists very concerned. Rearing of livestock can take years and is subjected to weather elements, which means production may not always meet demand. This has an impact on cost -of-living, especially for countries where meat is a staple part of their diet. Source: Various Extract 4: Is meat tax the only way? In several countries, vocal and opinionated environmentalists are proposing a meat tax . However, while there is a general acknowledgement of the need to reduce meat consumption and production for environmental reasons, the validity of a tax on meat is far less clear. Imposing a meat tax would mean further reducing the affordability of meat for low -income households who may already struggle to purchase meat. The environmental impact of meat production also varies considerably across farming practices – not all farming practices are

4 ©ACJC 2024 Preliminary Exam 8843/01 necessarily bad for the environment, especially sustainable farming. As such, opponents of a meat tax have proposed several alternative policies: 1. Subsidising healthier food choice To drive down consumption of meat, consumers should be able to access cheaper alternatives. A good way to change consumer’s behaviour and hence, the production of meat is to subsidise the production of healthier food such as fruits, vegetables, legumes and nuts. 2. Subsidise sustainable livestock farming practices If sustainable livestock farming practices can be made cheaper, through subsidies, farmers could have greater incentives to adopt these practices. The sustainable livestock farming practices include the use of organic feed and fertilisers, animal supplements and vaccines that can cut the methane emissions during the animals’ digestion process. This could even lower the pressure on meat prices. 3. Empower consumers at all income levels to make more sustainable purchasing decisions This means investing in education to consumers on ways to achieve healthier diets. It could mean clearer food labelling and display of nutrition information, as well as campaigns to promote the benefits of eating plant-based diet instead. Source: World Economic Forum, 21 May 2022 Questions (a) Table 1 shows various global food commodity pr