Answer to Question #320549 in Microeconomics for samson

Question

In Rwanda local farmers manage small plots of land for subsistence farming. However, some have benefited by selling pineapples at an agreed fixed price to an exporter. The exporter provides finances, training, fertilizers and machinery and even building materials for the farmer’s homes. Explain the benefits which may be gained by the local community in Rwanda from the project.

Answer 1

The benefits from this deal are;

increased production due to cheap production

Source of employment

Large margins of profit since they spend so little to produce

Readily available market for them

Increase in farming knowledge due to the training.