Gce Model Questions Vol1 2022 Agricultural Science Question 50

A farmer produces 10 t of wheat each year. The market price is ₦150 kg⁻¹. Variable cost is ₦90 kg⁻¹ and fixed costs are ₦300 000 per year. Post‑harvest loss is 12 % of the harvested quantity unless a storage facility is built. The government offers a price‑support subsidy: if the market price falls below ₦130 kg⁻¹ the farmer receives a subsidy of ₦20 kg⁻¹ on the total harvested quantity. A storage facility costs ₦500 000 and reduces loss to 5 %; wheat stored can be sold at a 10 % premium over the market price. (i) Ignoring the storage facility, find the minimum market price at which the farmer breaks even. (ii) At a market price of ₦120 kg⁻¹, does building the storage facility make the farmer profitable? Answer "Yes" or "No".