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Chapter 8-3Commercial Agriculture• Production Control

– short supply should command an increased market price (after typhoon in Asia, vegetable price going up)

– government control prices either too high or too low. (farm economy distorted while low food price is enforced, material distortion while stop importing and subsidizing)

– Today’s contractual arrangement in the U.S. up to 1/3 from 10% within 50 years.

– Older supply/demand market price mechanism is not totally valid

– crop or livestock mix selected by commercial farmers reflects an assessment of market demands and prices

– involves intensive land use near markets and extensive land use at more distant locations.

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von Thunen’s model (8.14)• intensity of land use, higher priced/more perishable goods are

produced in land closer to the city. High shipping and high demand commodities found in inner rings.

• “A portion of each crop is eaten by the wheels” - observed by von Thunen, distance between market and production site is the most important determination of the location

• Transport gradients (8.15) - crops with highest transport cost and market values will be grown nearest to the market.

•Transportation cost affect the shape of Rings (8.16)• Industrial and post-industrial economy, land use is determined by factors with urban expansion. von Thunen model is less predictable

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Intensive Commercial Agriculture

• Characterized by high yields per unit of cultivated land

• Large amount of input - justified by fruits, vegetable and dairy products. Truck Farm produces wide range of vegetable and fruits with refrigerated trucks and custom packaging. (distribution of truck farm 8.17)

• Livestock-grain farming - growing grain for livestock feed. corn and livestock at same farm reducing transportation cost. Close to the great coastal and industrial zone markets.

• livestock price higher than feed, farmer convert their corn into meat on the farm by feeding it to the livestock

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Extensive Commercial Agriculture• Farmland values decline westward with increasing distance

from the northeastern market of the US, but not increasing while near west coast. Climate and environmental considerations (increasing aridity and mountain ranges..) (8.18)

• Large-scale wheat farming - requires large amount capital input. Spring wheat (Dakotas, e Montana, S Canada) winter wheat (Kansas..) Argentina in S hemisphere. Wheat is the most grain production in the world (8.20)

• Livestock ranching - oriented to the urban market of industrialized countries. Confined to areas of European settlement., Caused destruction of tropical rain forests in Central America and the Amazon basin due to expanded cattle ranching. (in land with low quality, low pop density, and require low labor)

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Special Crops - mostly due to climate factor

• Mediterranean agriculture - grapes, olives, oranges, figs, vegetables and similar commodities - needs warm temp. all year round plus summer sunshine. Summer drought and winter rain, irrigation system is needed.

• Plantation crops - foreign to the areas (8.22)– tea in India and Sri Lanka, jute in India and Bangladesh,

rubber in Malaysia and Indonesia, cacao in Ghana and Nigeria, can sugar in Cuba...., coffee in Brazil and Colombia, banana in central America.

– Most plantation in coastal area, easy for export.

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Planned Economy

• agricultural communes in Soviet Union, Eastern Europe, and mainland China. Program set up by Stalin.

• In China, communist regime redistributed all farmlands to some 350 million and collectivized into 700,000 communes in 1957 and reduced to 50,000 with 13,000 members each.

• Free market in China (8.24)

• loss of farm land to urbanization, is not compensated by yield increases would again raise the prospect of shortage of domestically produced food.

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Primary Activities: Resource Exploitation

• Gathering industries - fishing and forestry

• Extractive industries - mining and quarrying

• Renewable resources - materials can be consumed and then replenished quickly by natural or by human-assisted processes. such as forest, fish, grasslands, and animals. Maximum sustainable yield - max. rate of use that will not impair its ability to be renewed or to maintain the same future productivity. If exceeded, renewable will become nonrenewable.

• Nonrenewable resources - exist in finite amount and either are not replaced by natural processes.

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Fishing - provide 19% of all animal protein in the human diet (5% in all protein)

• steady fish harvest increase (8.26) except in 1998 (El Nino)

• 99% fish are from coastal wetlands, estuaries,and continental shelf. 1% from open sea. Commercial capture fishing for market only in northern hemisphere, tropical fish do school and contain higher oil content, only for local use.

• Overfishing - due to the accepted view of “open seas”

• tragedy of the commons - a open resource without collective controls being exploited to the max.

• Aquaculture - farm ponds, catfish and crayfish ponds in SE US

• Mariculture - coastal lagoon

• 30% of worlds’ fish harvest from aquaculture and mariculture production.

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Forest - Covers 30% of the earth land.

• 1) Northern coniferous (softwood) - largest- for construction, paper..(8.29) 2)Deciduous hardwoods (oak, maple, hickory) reduced by urbanization and agriculture - for furniture..

• 3) Lowland hardwood for fuelwood and charcoal and special wood exported for lumber. Malaysia accounted for 60% of the world hardwood logs export.

• Roundwood production - – 45% for industrial consumption and 55% for fuelwood and charcoal.

Developing countries rely on fuelwood and charcoal resulting in the serious depletion of tropical forest stands. In tropical areas, deforestation rates exceeds reforestation by 10 to 15 times.

– since 1970s, 25 to 30 million acres of tropical forestland have been converted to agricultural land and in S and Central America additional millions of acres been cleared for beef cattle for the N Ame. market.

– Half of roundwood production (for industrial markets) are from US,Canada and Russia and less than 20% from developing countries due to the transportation cost, explained by von Thunen’s model.

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Mining and Quarrying - Definition of reserves (8.31)

• Extract industry depend on the exploitation of minerals unevenly distributed in amounts and concentrations determined by past geologic events, not by market demand.

• In 1980s, many iron ore-producing plants were shut down due to the cheap import.

• Metallic minerals - production influenced by quantity of ore available, richness of ore, and distance to market.

• After h-quality ore is exploited, the demand for low-grade ores has been increasing. upgrading process done near site (concentration of copper, smelting facilities 8.32) and refinery at the market areas.

• And, large deposits of low-grade ore is being exploited instead of h-q ores due to the cost and consideration of long-term source of supply.

• Most important extractive industries - nonmetallic Minerals (in terms of volume and weight), mostly used for construction, only economically feasible when they are near the site where they are to be used. (8.33)

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Mineral Fuels • Energy consumption vs. GNP (8.34)

• Coal classified by rank (carbon content and fuel quality) and grade (measure of its waste material content), mined by strip-mining and shaft mining (Appalachian and Europe). Coal will last many centuries but not for oil.

• Petroleum reserves can only last 40 to 150 years. Petroleum is the most unevenly distributed resources.

• OPEC (Organization of Petroleum Exporting Countries)

• See Chapter8-Petroleum.ppt

• Natural Gas - highly efficient and requires little processing

The End of Cheap Oil

• Oil reserve - 1020 gbo (gigga-barrels of oil) 25 gbo/yr consumption, but with 2% increase of consumption, it won’t last 40 yrs.

• New discoveries - 7 gbo/yr• US gasoline price -

http://www.ouraaa.com/news/news/fuel.html• Americans consumed 19 million barrels/day=2.9

g/p/d=1000 g/person/yr, production=2.6 bbls in 2000. Reserves can only last 5 years if without import.

• Gulf of Mexico holds 15 bb of oil, high cost required to exploit.

data source: Scientific American, March 1998

Discoveries Production

1960

2000

1860 2100

Oil discoveries and Production

Evolution of gasoline price

Data:US DOE