8.1 The Classification of Economic Activity and Economies

• Production patterns are rooted in the spatially variable circumstances of the physical environment

• Unequal distribution of petroleum and mineral deposits make some regions wealthy and some dependent

• Forestry and fishing need other natural resources that are unequal in occurrence

  • Type

  • Value

• Complex environmental and cultural realities control the economic activities of humans

• Cultural considerations may shape economic decisions

• Culturally based food preferences rather than environmental limitations may dictate the choice of crops or livestock

• Production is controlled by economic factors of demand, whether that demand is expressed

• Preindustrial societies have no knowledge of or need the resources below for hunting, gathering, or gardening grounds

  • Iron ore

  • Coal

  • Petroleum

  • Uranium

• Level of technological development of culture will affect its recognition of resources or its ability to exploit them

• You can categorize the world’s productive work by viewing their economic activity

  • Primary Activity

    • Harvesting or extracting something from the Earth

  • Secondary Activity

    • They add value to materials by changing their form or combining them into more useful products

  • Tertiary Activity

    • Provide services to the primary and secondary sectors and goods and services to businesses and to individuals

    • Wholesale

    • Retail trade

  • Quaternary Activity

    • Service activities involving research, information, and administration

• Worlds most advanced economies are now largely post-industrial information economies

• Subsistence economy

  • Goods and services are created for the use of the producers

• Market (commercial) economies

  • Making buyers and sellers transacting everyday business

• Planned economies

  • Investment, production and the allocation of capital goods takes place while following economic and production plans

8.2 Primary Activities: Agriculture

• 38% of the world’s population depended on agriculture, hunting, fishing, and forestry for their livelihoods

• Supplies for humankind’s basic concerns can be acquired directly, through hunting, gathering, farming, or fishing, or indirectly, through performance of other primary, secondary, or service sector endeavors

• Increasing population would exceed food supplies

• Annual food supplies are more than sufficient to meet world needs

• 11% of the world’s population are inadequately supplied with food and nutrients

• Subsistence Agriculture

  • nearly total self-sufficiency on the part of its members

• Extensive Subsistence Agriculture

  • Large areas of land and minimal labor input per hectare

• Intensive Subsistence Agriculture

  • The cultivation of small landholdings through the expenditure of great amounts of labor per acre

• Animals provide a variety of products

  • Milk, cheese, blood, and meat for food

  • Hair and wool for clothing

  • Skins for clothing and shelter

  • Excrement for fuel

• Economic, social, and cultural changes are causing nomadic groups to change their way of life or to disappear entirely

• Urban Subsistence Farming

  • Around 800 million city farmers worldwide are part of an urban subsistence farming

  • Urban food production reduced adult and child malnutrition in a lot of cities

• Expanding Crop Production

  • There are two paths to promote increased food production

    • Expand the land area under cultivation

    • Increase crop yields from existing farmlands

• Intensification and The Green Revolution

  • The key to agricultural production for the past few decades has been increased productivity of existed cropland rather than the expansion of the area

  • World grain yields rose nearly 140 percent between 1960-2009

• Commercial Agriculture

  • Growing food to sell it as a business venture

  • Opposite of subsistence agriculture

• A Model of Agricultural Location

  • Johann Heinrich von Thünen observed that uniformly fertile areas of farmland were used differently in the early 19th Century when the governmental influences were the normal

• Intensive Commercial Agriculture

  • Has both plants and animals

  • Industrial agriculture

  • Crops that give a lot of profit and high yield

• Extensive Commercial Agriculture

  • Large wheat farms

  • Animal ranching

  • Way of cropping with minimal amounts of labour

  • Produces lower yield per unit

• Special Crops

  • Mediterranean Agriculture

    • Specialized farming economy

    • Known for fruits and vegetables

  • Plantation Agriculture

    • Foreign

      • Investments

      • Management

    • Marketing to indigenous

      • Culture

      • Economy

    • Employing nonnatives to produce crops for foreign markets

• Sustainable Agriculture

  • Main point of this type of agriculture is to

    • provide enough food for everyone

    • prevent poverty

    • enhance social, ecological, economic, and individual health

8.3 Primary Activities: Resource Exploitation

• Resource Terminology

  • Resources or natural resources are the naturally occurring materials that society perceives to be useful to its economic and material well-being

• Fishing

  • Fish and shellfish account for just 17 percent of all human consumption of animal protein

  • The annual fish supply comes from three sources:

    • The inland catch; ponds, lakes, and rivers

    • Fish farming (or aquaculture)

    • The marine catch

• Forestry

  • the world’s forests and woodlands probably covered some 45 percent of the Earth’s land area before the rise of agriculture

  • With forestry, you can:

    • Managing

    • Planting

    • Repairing

    • Constructing

    • Economic uses

    • Social uses

    • Ecological

• Mining and Quarry

  • Extracting natural resources and minerals from the earth

  • Provides non-renewable resources

  • Minerals can be used for social, economic, ecological, and recreational purposes

• Non-Metallic Minerals:

  • Minerals that do not contain metals of industrial interest as part of their composition

  • Non-metallic mineral reserves consist of quarries of stone, clay and sand pits

• Fossil Fuels:

  • Are highly dense natural fuel such as coal and/or gas made from decomposing plants and animals

• Metals:

  • Usually hard material used to construct objects

8.4 Trade in Primary Products

• International trade expanded rapidly since the end of WW2 (Has increased more than 8 fold since 1980)

• Primary commodities contribute to the total dollar value of international flows

• The world distribution of supply and demand for primary commodities resulted in a colonial pattern of commodity flow (20th century)

• Reverse flow carried manufactured goods from industrialized states for sale to developing countries

• The two-way trade benefited the developed states

• Also gave less developed countries some capital to invest

• Trade flows have changed in modern days

• Raw materials decreased and manufactured goods increased

• Trade in unprocessed goods still remains dominant in the economic well-being of many third world countries

• Commodity prices are volatile

  • May rise sharply in periods of product shortage or international economic growth

• During the ’80s and ’90s, commodity price movements were downwards

• Prices for agricultural raw materials dropped 30 percent between 1975-2000

• Metals and minerals decreased by 40%

• 91 of the 141 developing countries rely on commodities for 60% of their export earnings

• Technology has provided advanced countries with vast materials that substitute ores and metals produced by developing states

• As world industrial economy expands, demand and prices for traditional raw materials remain low

• Prices paid for developing country commodities are low | prices charged for the manufactured goods offered in exchange tend to be high

• Some developing states placed restrictions on the export of unprocessed commodities to capture profit for themselves

• Some dc’s also encouraged domestic manufacturing to reduce imports and diversify exports

• In 1964 developing states promoted the establishment of the United Nations Conference on Trade and Development (UNCTAD)

  • Expanded to 13 developing states

  • Continues to press for a new world economic order

• WTO (Established in 1995) was designed to reduce trade barriers and inequities

• WTO is ineffective on issues of importance to developing countries

  • Failure of the high-income countries to eliminate generous protections for their own agricultural and mineral industries

• At WTO meeting in 2001, developing countries argued for the elimination of agricultural subsidies and protectionist policies in the EU and US

• Negotiations continued through 2008

• Agriculture was the primary roadblock in the trade talks

• 2015 Nairobi package included agreements to eliminate export subsidies for agricultural products