Level 3 Agricultural and Horticultural Science · 2 INSTRUCTIONS This assessment requires you to answer questions related to TWO distinctly different primary products. "Primary products
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Level 3 Agricultural and Horticultural Science91530 Demonstrate understanding of how market forces
affect supply of and demand for New Zealand primary products
Credits: Five
Achievement Achievement with Merit Achievement with ExcellenceDemonstrate understanding of how market forces affect supply of and demand for New Zealand primary products.
Demonstrate in-depth understanding of how market forces affect supply of and demand for New Zealand primary products.
Demonstrate comprehensive understanding of how market forces affect supply of and demand for New Zealand primary products.
Check that the National Student Number (NSN) on your admission slip is the same as the number at the top of this page.
You should attempt ALL the questions in this booklet.
If you need more room for any answer, use the extra space provided at the back of this booklet.
Check that this booklet has pages 2 – 16 in the correct order and that none of these pages is blank.
YOU MUST HAND THIS BOOKLET TO THE SUPERVISOR AT THE END OF THE EXAMINATION.
ASSESSOR’S USE ONLY
TOTAL
SAMPLE ASSESSMENT
2
INSTRUCTIONS
This assessment requires you to answer questions related to TWO distinctly different primary products.
"Primary products are primary industry products ... in unprocessed or processed form." (AS 91530 Version 3)
Note the following points. 1. Select your primary products and write them in the box below. Before doing this, carefully read
ALL of the questions in this paper to ensure that your selection will allow you to meet ALL therequirements of the questions.
2. The primary product for your discussion of supply (Question 1) must be different from that for yourdiscussion of demand (Question 2).
3. At least one of your selected products must earn significant export earnings for New Zealandproducers.
Choice of market forces affecting product supply for discussion in Question One: • exchange rate• market trends• quantity available
Choice of market forces affecting product demand for discussion in Question Two: • consumer preferences• quality requirements of processors orbuyers• reliability of supply.
Question Three asks you to discuss how free trade agreements including the Trans Pacific Partnership (TPP) agreement could have affected the supply of, and demand for, one or both of your selected products.
SELECTION OF PRIMARY PRODUCTS
Primary product (1) for discussion of supply: vv1r1v
Primary product (2) for discussion of demand: vf J.. rn I ·/1(. � / '1/f
Primary product for discussion in Question Three: � f e,,,,
Note: In your answers, use specific examples, including recent units and values where appropriate, to
help explain how market forces affect supply and demand - e.g. volume of product, typical costs, or
returns to producers.
Agricultural and Horticultural Science 91530, Sample Assessment
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Agricultural and Horticultural Science 91530, Sample Assessment
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QUESTION ONE: Market forces affecting the supply of primary products
Note that the product you have chosen for discussion in Question Two cannot be used for this question.
I Primary product (1) ~~L-c....-'-/fU/'-r'"=-- -------------------
Draw a graph on the grid below , representing trends in the price received over the last three years (price vs time). fJ - fr; _
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2013 2014 2015 Time (years)
Explain the impact of at least TWO of the market forces listed below on the price trends for your product.
Exchange rate
Quantity available
In your answer, use data and evidence to:
identify the trends that are observed in the graph
Market trends
explain how TWO market forces contribute to the price trends observed in the graph
~rank the importance of each market force in its impact on, or contr ibution to, the price trends observed , and justify your ranking.
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The examination continues on the following page.
Agricultural and Horticultural Science 91530 , Sample Assessment
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QUESTION TWO: Marke t forces affecting the demand for primary products
Note that the product you have chosen for discussion in Question One cannot be used for th is question.
Demand for a product can often be influenced by more than one factor . For your second selected product , identify TWO market forces from the box below that impact on demand , and explain the relative importance of each of these forces.
Consumer preferences
Quality requirements of processors or buyers
Reliability of supply
(a) SelectTWO market forces from the box above, and analyse their effect on the demand for the product.
Market force 1: Cot1~ /?Y'eJpr:.e,,v,C-e---Effect on demand
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Agricultural and Horticultura l Science 91530 , Sample Assessment
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(b) Select the market force from (a) that has the greater effect on the demand for your primary AssEssoR·s USE ONLY product , and justif y your selection .
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The examination continues on the following page.
Agr icultural and Horticultural Science 91530, Sample Assess ment
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QUESTION THREE: The Trans Pacific Partnership (TPP) agreement
RESOURCE ON THE TPP
Potential benefits of the TPP
The Asia-Pacific region is a key driver of global economic growth. Roughly half of international trade, and more than 70 per cent of New Zealand's trade and investment, flows through the region. New Zealand's future depends on its economic relationships with Asia-Pacific countries. The 12 economies attempted to negotiate the Trans Pacific Partnership (TPP) because they saw benefits in a regional free trade agreement (FTA). Collectively, the 12 TPP economies represented more than US$27 trillion in GDP. The Asia-Pacific region is New Zealand's neighbourhood, and our economic future is reliant on strong trading relationships with Asia-Pacific countries. By negotiating FTAs, New Zealand tries to ensure that a level playing field exists for our exporters. If we are not involved in FTAs involving key trading partners, our exporters get left behind, and experience real economic disadvantages operating in offshore markets. Five of New Zealand's top 10 trading partners - Australia (1st), the USA (3rd), Japan (4th), Singapore (6th), and Malaysia (8th) were included in TPP negotiations. The TPP negotiating parties account for 45 per cent of New Zealand's total trade. A study by the East-West Center in the USA predicts that an agreement such as TPP could have generated the following GDP and export gains from the lowering of trade barriers and regional integration benefits: • Estimated GDP gains for New Zealand ofUS$2 billion in the year 2025 (a 0.9% increase
in GDP).• Estimated export gains for New Zealand of US$4.l billion in the year 2025 (a 6.8%
increase in exports).• Further income gains of up to US$2.l b i llion are estimated from a lift in the terms of
trade and greater consumer access to goods and services.
In 2009, the Ministry of Foreign Affairs and Trade (MF AT) and New Zealand Trade and Enterprise (NZTE) surveyed 854 New Zealand exporters to assess the impact of FTAs on their companies. More than 75 percent of respondents saw increases in profitability from the removal of trade barriers. Specific benefits for New Zealand businesses from the TPP were expected to include: • tariff elimination and reduced compliance costs for goods exporters• more opportunities to access overseas government procurement contracts• reduced barriers to services trade and investment.The USA is the world's largest economy, with over 300 million consumers. An FTA with the USA had been one of New Zealand's top trade policy goals for many years, with the USA being New Zealand's third-largest trading partner. New Zealand goods exports to the USA are concentrated in the agricultural and related food sectors. New Zealand would have benefited from greater access to the USA Government procurement market and enhanced access for our services exporters. Other potential benefits included an increase in American tourism and investment in New Zealand.
Agricultural and Horticultural Science 91530, 2016
Japan, Peru, Canada, and Mexico are the only other TPP negotiating partners with which New Zealand does not already have an FTA:
• Japan is New Zealand’s fourth-largest individual trading partner. In the year toDecember 2012, two-way trade stood at NZ$6.2 billion. New Zealand exports toJapan were NZ$3.2 billion, accounting for 7 per cent of total exports. Japan joins asthe second-largest economy involved in the TPP, adding nearly US$6 trillion to thecombined GDP of the TPP economies.
• Peru is New Zealand’s 55th-largest trading partner and third-largest export marketin Latin America. Horticultural and agricultural innovation are potential areas forcollaboration. The TPP would also promote increased services trade (in education andtourism), along with growth in tourism-related investment.
• Canada is New Zealand’s 19th-largest goods trading partner overall, with total tradeworth NZ$1.1 billion in the year ended December 2012. New Zealand and Canada havea close and longstanding relationship. Our trade and economic relationship has muchpotential, and Canada is a significant market of interest for New Zealand.
• Mexico is New Zealand’s largest goods trading partner in Latin America and 27th-largest trading partner overall, with total trade worth NZ$534 million in the year endedDecember 2012. It is another significant market of interest for New Zealand trade andinvestment.
The recent ASEAN-Australia-New Zealand FTA (AANZFTA) means New Zealand already has an FTA with Vietnam. The two countries’ complementary trade relationship would be further strengthened by the TPP. New Zealand businesses would enjoy an increased commercial profile in Vietnam (and in each of the other member countries).
New Zealand and Australia have a strong bilateral relationship. Australia is our largest trading partner, with trade flourishing under Closer Economic Relations (CER). We worked together with Australia in negotiating AANZFTA, and the TPP offers another opportunity to cooperate in a regional context.
The TPP’s greatest potential, however, is as a pathfinder for wider regional economic integration. A greater degree of coherence in the regulations that govern global supply chains would streamline international trade, with benefits for businesses and consumers. Over time, it would remove unnecessary duplication, reduce costs, and provide greater opportunities for small to medium-sized businesses in particular. While the negotiation involves 11 countries at the moment, the hope is that it will eventually expand to include other Asia-Pacific economies.Source (adapted): http://mfat.govt.nz/Trade-and-Economic-Relations/2-Trade-Relationships-and-Agreements/Trans-Pacific/index.php
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Agricultural and Horticultural Science 91530, 2016
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New Zealand has negotiated several free trade agreements. Some examples include:
• Australia-New Zealand CER
• New Zealand-Singapore CER
• Trans-Pacific Strategic Economic Partnership
• ASEAN-Australia-New Zealand FTA
• New Zealand-Malaysia FTA
In February 2016, 12 countries in Auckland signed an agreement to begin the process for the
TPP. It was not successful however, due to the US pulling out of negotiations.
With reference to ONE of your selected unprocessed or processed products, discuss how free
trade agreements could impact on the supply and demand for the product in the international
market(s), and whether the TPP would have been of benefit to New Zealand producers of this