MI_H2_ECONS_P1_QP_Answer

2015 Preliminary Examination 2 Pre-University 3 ECONOMICS 9732/01 Paper 1: Case Study 15 September 2015 2 hours 15 minutes Additional Materials: Answer Paper READ THESE INSTRUCTIONS FIRST Write your name and class on all the work you hand in. Write in dark blue or black pen on both sides of the paper. You may use a soft pencil for any diagrams or graphs. Do not use staples, paper clips, highlighters, glue or correction fluid. Answer all questions. Begin your answer to Question 2 on a fresh sheet of writing paper. At the end of the examination, hand in your answers to the 2 questions separately. The number of marks is given in brackets [ ] at the end of each question or part question. This question paper consists of 7 printed pages and 1 blank page. [Turn over

2  9732/01/P2/MI/2015 Answer all questions. Question 1 Australian Agriculture Sector Extract 1: Challenges faced by Australian farmers A near-perfect growing season for small farmers in two of Australia's biggest food belt regions - south-east Queensland and Victoria - has produced a bumper crop. But despite a bountiful yield, oversupply has driven down prices. It should be a time for celebration for growers, who have become hardened to a relentless cycle of droughts and floods in recent years. Instead many are complaining that they are being paid less at wholesale markets than the cost of harvesting their crops. The number of farmers in Australia is shrinking, and it's not just the current domestic oversupply that is hurting the bottom line. The amount of imported fresh produce has reached record levels, and growers are facing unfair competition from overseas imports. Local farmers want prices to be set by the federal government to guarantee a decent return. If not, the sector will continue to contract. In contrast, Tasmania produced large crops of apples and many other crops. Artisan farming has blossomed on the island state in recent years, where small enterprises labour away making high-value, niche specialities, including hand-ground spelt and rye flour along with boutique jams and relishes. Tasmanian farmers are also leading the way on exporting extensively. But Tasmania's optimism gives way to a sense of gloom in other parts of Australia. In Queensland's sugar capital, Bundaberg, Mark Presser, a fourth generation cane farmer, enjoyed a record crop last year, and is on course to harvest another reasonable yield this time around. Yet he too feels besieged by falling prices and growing competition from overseas, most notably Brazil and India, where production costs are far less. Source: BBC News, 31 October 2013 Extract 2: Australian dairy industry The Australian dairy industry starts with some 6,686 registered dairy farms. Most of the dairy far