Level 3 Agricultural and Horticultural Science...3 Agricultural and Horticultural Science 91530,...

915300

3SUPERVISOR’S USE ONLY

9 1 5 3 0

© New Zealand Qualifications Authority . All rights reserved.No part of this publication may be reproduced by any means without the prior permission of the New Zealand Qualifications Authority.

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

3


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4

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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Agricultural and Horticultural Science 91530, Sample Assess ment

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Agricultural and Horticu ltural Science 91530 , Sample Assessment

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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.

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Agricultural and Horticultural Science 91530, Sample Assess ment

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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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11

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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

This examination continues on the following page.

13

Agricultural and Horticultural Science 91530, 2016

14

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

product.

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QUESTION NUMBER

16

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Exemplar for 91530 - Sample Assessment Processed Products I Total Score: 24

Grade

Score

E8

E8

E8

Annotation

The candidate produced a graph with wine prices per litre from 2013-2016 and

extended with information over an extended period to support their answer. They

produced a detailed response (demonstrating understanding of the wine industry),

explaining how exchange rate can influence the returns to wine growers, and how

different export destinations can help spread the risk of currency fluctuations. They

explained how this has helped the NZ wine industry to have steady returns in a turbulent

world market. The candidate also explained with detail, how market trends have

benefited the NZ wine industry over the past 3 years. Specific trends such as a shift

towards the premium bottled market, the decline in the acceptance of binge-drinking and

the increasing palette for technically produced wines such as NZ sauvignon blanc have

increased NZ's market share in lucrative markets such as the US. These factors

combined, have given confidence for the NZ wine industry to increase supply. Specific

prices both per litre to growers and as a total of value (e.g. $500 million worth to US),

were given. Added data representing the increasing number of hectares the wine

industry is planning to meet an increase in supply and a clearly articulated justification,

that was stated early for market trends, enable this candidate to receive an E8.

A challenging product choice of a2 baby formula with specific market forces was chosen

by this candidate. The candidate produced responses for both market forces in this

question, providing specific examples for each. The material was recent and showed an

in-depth understanding of the specific market forces that influences market demand for

a2 baby formula. An interesting twist on reliability of supply had the danger of moving

away form the secondary product - a2 baby milk formula- when discussions around

Chinese milk powder stockpiling in 2013-2014, however, the candidate carefully

manoeuvred the discussion back to its relevance to the market demand for its own

product. The final delivery of the answer was further supported with quantitative data,

both in terms of increasing market revenue in Australia and China, and with specific

volumes of increasing supply of a specific infant formula product planned to meet future

demand. Whilst specific prices of secondary products are unlikely to be known, due to

market sensitivity, the candidate did supply compelling quantitative and qualitative

evidence to support the viewpoint presented, hence an E8 was awarded.

The candidate has produced a detailed response in terms of how the TPP might have

influenced the supply and demand for cheese, and how this might be both

advantageous and ineffective for NZ cheese producers. The material does not overly

utilise material from the resources; rather they have provided a commentary that

indicates a wide knowledge of the market forces for the NZ cheese industry and

extended to include FT As and trade agreements outside the TPP. At times, the answer

diverted into political issues, not specifically related to cheese, however the candidate

did eventually connect this to their product. Quantitative data surrounding mozzarella

into China and the increasing factory production for soft cheeses were given to support

this answer and combined well with the largely qualitative commentary around the

effects of trade agreements on the supply of NZ primary products, including processed

cheeses. The addition of quantitative data surrounding exchange rates added an

additional dimension to the advantages and disadvantages the NZ cheese industry can

face in international markets and the impacts this can have to producers. These factors

combined provided sufficient evidence to award an E8.

NCEA Level 3 Agricultural and Horticultural Science (91530) Sample Assessment — page 1 of 3

Sample Assessment Schedule summary

Agricultural and Horticultural Science: Demonstrate understanding of how market forces affect supply of and demand for New

Zealand primary products (91530)

Assessment Criteria

Achievement Achievement with Merit Achievement with Excellence

“Demonstrate understanding” involves explaining

how market forces affect supply and demand for New

Zealand primary products.

“Demonstrate in-depth understanding” involves

explaining in detail how market forces affect supply

and demand for New Zealand primary products, with

quantitative data.

“Demonstrate comprehensive understanding” involves

analysing how market forces affect supply and

demand for New Zealand primary products, with a

focus on the significance and impact of the market

forces.

Question One: Market forces affecting the supply of primary products (unprocessed or processed)

N1 N2 A3 A4 M5 M6 E7 E8

ONE market force

partially explained,

with reference to a

specified product.

TWO market forces


with reference to a

specified product.

ONE market force

explained in general

terms, with

reference to the

price trends for a

specified product.

TWO market forces

explained, with

reference to the

price trends for a

specified product.

ONE market force

explained in detail,

and the other

supported, with

reference to the

price trends for a

specified product,

using quantitative

material where

appropriate.

TWO market forces


with reference to the

price trends for a

specified product,

using qualitative and

/ or quantitative

material where

appropriate.

TWO market forces



price trends for a

specified product,


/ or quantitative

material where

appropriate.

AND

Partial justification of

the ranking, using

both qualitative and

quantitative material

where appropriate.

TWO market forces



price trends for a

specified product,


/ or quantitative

material where

appropriate.

AND

A full and

comprehensive

justification of the

ranking, using both

qualitative and


where appropriate.

N0/ = No response; no relevant evidence.



Question Two: Market forces affecting the demand for primary products (unprocessed or processed)

N1 N2 A3 A4 M5 M6 E7 E8

ONE market force


with reference to a

specified product.

TWO market forces


with reference to a

specified product.

ONE market force


terms, with

reference to a

specified product.

TWO market forces


terms, with

reference to a

specified product.

ONE market force


and the other

supported, using

qualitative and / or


where appropriate.

TWO market forces



/ or quantitative

material where

appropriate.

TWO market forces



/ or quantitative

material where

appropriate.

AND

Partial justification,

using BOTH

qualitative and


where appropriate.

TWO market forces



/ or quantitative

material where

appropriate.

AND

A full and

comprehensive

justification, using

BOTH qualitative

and quantitative

material where

appropriate.




Question Three: The TPP and other trade agreements, and their likely effect on another primary product (unprocessed or processed) for export

N1 N2 A3 A4 M5 M6 E7 E8

Possible market

impacts from the

TPP and other trade

agreements are

described, using the

resource provided.

Possible market

impacts from the

TPP and other trade

agreements are

described in general

terms.

Two obvious

comparisons

between the TPP

and other trade

agreements and the

possible market

impacts for their own

nominated product

are made.

Two obvious

comparisons

between the TPP

and other trade

agreements and

possible market


nominated product

are made. Some

attempt to include

data from sources

beyond the resource

supplied.

Two obvious

comparisons

between the TPP

and other trade

agreements and

possible market


nominated product

are made, using

supporting data

outside the resource

supplied.

Two obvious

comparisons

between the TPP

and other trade

agreements and

possible market


nominated product

are made, using

supporting data


supplied, with either

supply OR demand

discussed in depth.

Two obvious

comparisons

between the TPP

and other trade

agreements and

possible market


nominated product

are made, using

supporting data


supplied, with either

supply OR demand

discussed

comprehensively,

and the other

mentioned.

Two obvious

comparisons

between the TPP

and other trade

agreements and

possible market


nominated product

are made, using

supporting data


supplied, with BOTH

supply and demand

discussed

comprehensively.


Level 3 Agricultural and Horticultural Science...3 Agricultural and Horticultural Science 91530,...

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