The local farm cooperative has been growing and supplying wheat and maize to the local area for
the past 20 years. However, the returns have remained quite low as the price obtained does not
allow much margin for investment into new technologies. As a result of regional development, a
river has been re-routed and now runs very close to the cooperative and so provides a potential allyear
water source. The ground is also suited to growing soft fruit such as peaches and melons, for
which they can get a premium price from overseas customers. This will also mean supplying a
particular fruit exporter who has been awarded the contracts and their contacts.
Undertake

Undertake a critical cost benefit analysis for the farm cooperative in regards to this diversification
strategy.

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