Primarily for direct consumption by a local population,

usually small scale and low tech

SubsistenceAgriculture

Primarily for purpose of selling

products for money, often monocultures

for economies of scale

Commercial Agriculture

Agriculture & Rural Land Use – Key Topics

Large-area farms or ranches

Low inputs of labor & low output per acre

Extensive Land Use

Small-area farms or ranches

High inputs of labor & high output per acre

Intensive Land Use

Rice paddies, southeast ChinaCattle ranch, northeast Colorado

Large amount of human work is applied

per unit of output

Labor-IntensiveAgriculture

Large amount of capital (equipment and buildings used

to produce other goods) is applied per unit of output

Capital-IntensiveAgriculture

Top picture – Labor-intensive corn raising in central Mexico.

Bottom picture – Corn exported from capital-intensive U.S. farms to the

Mexican market

Subsistence – predominantly low-income regions

Intensive subsistence – subtropical monsoon areas

Shifting cultivation – tropical forests & savannas

Nomadic herding – semiarid and arid lands

Commercial – predominantly high-income regions

Crop farming – more humid climates

Livestock ranching - drylands

Probable culture-hearths of agriculture

Invention of farming & domestication of livestock (8,000–14,000 years ago) + diffusion from several source regions = shift from hunter-gatherer to shift from hunter-gatherer to agricultural societiesagricultural societies

First Agricultural Revolution

Second Agricultural RevolutionTechnological changes (starting 1600s in Western Europe; spread by 1800s to North America)

Began with new methods: crop rotation, better horse collars

Later innovations: replace human labor with machines, supplement natural fertilizers & pesticides with chemicalBeginnings of commercialization of agriculture (production of surplus for trade); enabled widespread urbanization

• Climate and natural environment

• Culture

• Economic factors

Simplified von Thünen model of agricultural land use (1826)

Factors influencing location of agriculture

Medium transportation cost items

(corn, soybeans, mixed farming)More extensive land use –

medium rent

Urban market

High transportation cost items(vegetables, eggs, dairy, flowers)

Intensive land use – high land rent

Lowest transportation cost items(forestry, wheat, livestock ranching)Most extensive land use – lowest

land rent

Third Agricultural Revolution GREEN REVOLUTIONSince 1960s

- hybridized grains (“Green Revolution”)- synthetic fertilizers- genetically engineered crops - vertical integration of ownership (e.g., Cargill, ConAgra,

ADM)

- globalization of productionA partial list of ConAgra’s brands

Swiss Miss Hunt’s

Van Camp’s Marie Callender’s

Wesson Hebrew National

Slim Jim Egg Beaters

Rosarita Chef Boyardee

ReddiWip Pam

Peter Pan Orville Redenbacher’s

Healthy Choice Banquet

““Green Revolution” – Green Revolution” – 1960s -1980s1960s -1980s

Rice plant

Rice - staple food for 2.5 billion Asians - provides 2/3 of calories for Asians with rice-based diets

Green Rev – Raised Green Rev – Raised yieldsyields

* Improved rice strains

* Greater use of fertilizer

* Increase use of irrigation

Asia’s rice production grew at annual rates of 3.0% until 1980s

Yield growth rate exceeded high pop. growth rates of the time

““Post-Green Revolution” Post-Green Revolution” (since 1980s)(since 1980s)

Green Revolution PlussesGreen Revolution Plusses::

Countries self-sufficient in Countries self-sufficient in rice or even exporters rice or even exporters (Thai, Viet). (Thai, Viet).

Poor people benefited as Poor people benefited as yield increases caused yield increases caused real price of rice to drop.real price of rice to drop.

ProblemsProblems

Successes led to less Successes led to less concern about food concern about food security, & lesssecurity, & lessinvestment in irrigation, agric research, & rural investment in irrigation, agric research, & rural infrastructure. infrastructure.

Growth rate in rice production declined during 1985-95 Growth rate in rice production declined during 1985-95 due to drop in growth rate of rice yields.due to drop in growth rate of rice yields.

In most places, despite increasing use of fertilizers, In most places, despite increasing use of fertilizers, further increases in yields became harder to achieve & further increases in yields became harder to achieve & more costly.more costly.

Third Agricultural RevolutionBenefits

Reduced uncertainties in agriculture

Greater global exchange of ag products

Increased yields

Costs

Increased dependence on fossil fuels

Reliance on chemical inputs

Less global diversity of food products

Concentration of pollutants

Primary Secondary

TertiaryQuaternary

Sectors of the Economy

Figure 6.1 (p. 138)

Figure 6.11 (p. 150)

Background on Economic Restructuringof the U.S. and Canadian Economies

Job Competition

Figure 6.10 (p. 149)

Structural change of the economy

Least-Cost Location Theory

Cost minimization is half of profit maximization equation (along with maximizing revenues)

Cost minimization theory:- labor-cost minimization- transportation cost minimization

Cost minimization - an industrial location strategy that seeks to minimize what the firm pays to produce and distribute its products or services

Maquiladoras – foreign-owned assembly plants in Mexico (mostly textiles &

consumer electronics)

Over 11,500 maquiladoras along

border with U.S.; employ 2 million+ Mexicans

Revenues from maquiladoras, make up

85% of trade btwn Mexico and U.S.

Minimizing Labor Cost

Average work week is 60-70 hours; wages about $5.75 per

day. Women are 70% of maquiladora workforce.

Since 2000, some maquiladoras have closed as corporations move assembly-line jobs to even lower-wage

countries, mainly China.

Sources: PBS & Ingolf Vogeler

Fixed and Variable Costs Influence the Optimum Location for Economic Activity

Classical economic geography models focus

mainly on the variable cost of transportation

Determining the best location for a mfg. plant with raw materials in Minnesota, Florida, and Texas & the market in New York

(but with differing amounts of raw mat’s needed)

Weber Triangle

• Three factors:– Transport costs– Labor costs– Agglomeration

• Transport costs:– One market and two

sources:• Equal distance and

shipping costs dictates a market location

• Two weight-losing materials results in an intermediate location

Weber’s Theory of Location

• Weber’s theory results in 3 generalizations:– Using pure materials in the production process

will always dictate a market location– Weight-loss materials usage will pull the plant

closer to the sources– Intermediate location chosen most often

• No handling costs at terminal

Weber’s Theory of Location

• Labor Costs:– Location chosen always has least combined

costs• A location my have higher transport costs, but more

inexpensive labor

– Isotims: lines of equal transport cost– Isodapane: line of total transport costs (sum of

isotims)

Weber’s Theory of Location

• Agglomeration:– Weber recognized that clustering will result in a

per unit savings– Example:

Raw Material OrientedTendency for industry to locate near its

source of raw materials in order to save on transport costs

Usually occurs when raw materials lose weight in the production process (e.g., paper,

steel)

Transportation Cost Minimization

Market OrientedTendency for industry to locate near

population centers in order to save on transport costs

Occurs when product is more costly to transport than raw materials (e.g.,

beverages, glass)

Transportation Cost Minimization

Break-of-Bulk OrientedLocation between sources of raw materials and markets – for products that must be

divided and shipped from a central point of entry

Intermodal transportation – e.g., moving from rails to trucks or ships to trucks, or ports to

pipelines

Transportation Cost Minimization

Where is the best location for a steel manufacturing plant?

Recipe for steel (traditional)

Coal = 2 to 3 tons (+ energy*)

Iron ore = 1½ to 2 tons

Limestone = ¼ to ½ ton

Mix all solid ingredients. Heat at about 600º F until thoroughly melted.*

Pour molten blend into molds. Cool and serve. Makes one ton of finished steel.

The recipe for making steel has changed (new technology) How has this affected the location of

modern steel-producing areas?

Consider transport costs of a car’s components. Where’s a good place to locate

your assembly plant?

Over 50,000 U.S. auto-making jobs in these foreign-owned plants (2005)

The cost of transporting data has declined to near zero

Source: Probe Research, Inc., Telcordia (Bellcore); Progressive Policy Institute.

Low transmission costs, plus ability to digitize data, revolutionized the location choices for high-tech industry

“Post-Fordist” Production – High Tech Industry

Adapting the traditional models of economic geography

Greater flexibility of production

Less reliance on storage of inventory – seek prompt delivery of goods needed for production (“just-in-time”)

Suppliers’ location

Need to have access to fast delivery systems (= airports)

Agglomeration of management

Still occurs! High-tech innovators locate closer to airports; universities; amenities; venture capital (tends to be a “footloose” industry)

Internationalized spatial division of labor

Lower labor costs needed for production – industry locates manufacturing in lower wage areas (secondary) but tech and management stays in core area (quaternary)

Multiplier Effect

• Addition of one basic job tends to give rise to more jobs including non basic jobs– Basic Job = brings money into an urban place &

gives the city its primary function• Auto manufacturing• Coca cola plant• Aerospace industry• Movie production industry

• Adding a NON basic job does not have the same effect

Economic Base Model