38. Agricultural Practices and Economic Forces

This module is focused on commerical farming practices and the Bid-Rent Theory.

Agricultural production regions

• Subsistence regions

  • primary consumption by producer and producer’s local market

  • predominates developing or under developed areas

• Commercial regions

  • primary goal is maximize profits

  • produced for off-farm sales

  • have hired labor and high capital expenditures

    • assets that cost money are considered capital expenditures

  • located/dominates developed areas

Bid-rent Theory

• explains how demand and price for/of land decreases as the distance from the CBD increases

  • CBD: central business district: officer/shops located at city’s most acessible point: usually center

• attempts to predict prices entities are willing to pay for land in different locations

• relies on underlying assumptions

  • Intensive practices in regards to Bid-rent theory

    • intensive farming farmers are more likely to purchase land closer to the CBD because their products may be perishable and do not travel well

  • Extensive practices in regards to Bid-rent theory

    • need large areas to plant crops

    • less concerned about perishability

    • are often not concerned with being close to the CBD and need large lots of land, so extensive farmers will often be located farther from the CBD than intensive farmers

How large-scale commerical agriculture effects family-farms

• large scale operations practice monocropping and require high labor and high number of acres

• Family farms

  • farming operation owned majorly by family corporation that sells its products to a define market

  • rarity of profit while competing with high commerical based companies

  • require intensive attention to farm operations and only make a small amount fo overall agricultural production percentages comapred to commercial farms

  • buyouts from large companies

Commodifty chains

• a commodity refers to a primary product that can be bought and sold, such as chicken, coffee, rice, or milk

• a commodity chain is series of links connecting a commodity’s places of production, distribution, and consumption

• chain begins with producer and ends with consumer (ALWAYS), then goes back from consumer to producer

• the value of the agricultural product increases as it travels from producer to consumer

Economies of scale and Carrying capacity

• the more that is produced, the lower the cost of production and the higher the profit

• smaller farms have similar costs of production, but their profits are far lower due to the cost per unit of production

  • to use this disadvantage to their advantage, small farms pair up together and make farm co-ops

  • then, share equipment and buy items in bulk at discounted prices

• increase in agricultural carrying capactiy increased economies of scale (amount of land that is suitable for agriculture)

  • Industrial inputs

    • shortening the production time increases efficiency and produces higher rates of profit

    • industrial inputs created closed animal feeding operations, pesticides, synthetic fertilizers, and herbicides

  • Mechanization

    • industrialized farms depend on fossil fuels

    • many famr operations are now mechanized due to how it gives them higher productivity rates

      • can reduce farm labor in half

      • labor is on a need basis

    • agriculture mechanization created cool chains

      • system that uses refrigeration to keep items/crops/food safe and preserve them in every step of transport

      • done through climate controlled environments