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1.1 Nature of economics

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Question 18

Extract A

Sustainable Agriculture and Vertical Farming Grants

In January 2024, the Department for Environment, Food and Rural Affairs (Defra) launched a £15 million capital grant scheme for indoor vertical farming installations. Under this initiative, qualified commercial growers received up to 40% of their technology setup costs. Following the implementation of this scheme, energy consumption reports showed a 22% increase in electricity demand among participating rural hubs. Despite this, the market price of locally grown leafy greens decreased by 15% in the region.

This funding allocation represents an incredibly wasteful expenditure on tech-centric agricultural fads when traditional soil-based smallholders are struggling to survive high fertilizer costs. Some agricultural economists argue that the government must immediately suspend all vertical farming subsidies and divert the funds to organic soil restoration.

Additionally, the import tariff on non-EU fresh produce was maintained at 8%. Customs officials defended this tariff, claiming it protected domestic growers from being undercut by cheaper foreign imports. However, trade analysts highlighted that this tariff has resulted in a £4.50 weekly increase in the average household's grocery bill. It is completely unjust for the state to artificially inflate food prices during a cost-of-living crisis.


Explain the difference between a positive and a normative statement, using an example of each from Extract A.

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1.1 Nature of economics Questions

  1. A Level
  2. /Economics
  3. /1.1 Nature of economics