The Economic World

Revision Notes

Primary, Secondary and Tertiary activities in MEDCs and LEDCs

• Primary activities involve taking raw materials directly from the ground, they remain unaltered. Activities include farming, fishing, mining and logging.

• Secondary industries (also called manufacturing industries) involve processing the raw materials into other products. For example, latex can be made into rubber which can be used for tyres.

• Tertiary industries are service industries, such as teachers, nurses and shop assistants.

• Quaternary industries are modern high tech service industries involving research activities and computing.

Primary, Secondary and Tertiary activities in MEDCs and LEDCs

• MEDCs (such as the UK) tend to have very little primary industry, some secondary industry and the majority of people working in tertiary or service industries.

• LEDCs (e.g. Mali) tend to have most people working in primary industries and very few workers in the secondary and tertiary industries.

The change PST over time for in LEDCs and MEDCs

• All countries undergo changes in their economic systems. The percentage of people working in primary, secondary and tertiary industries can change over time as a country develops. A decrease in primary sector jobs is caused by

1. Improvements in technology allowing machines (mechanisation) to do the jobs of people. This has been particularly important in agriculture.

2. Raw materials such as coal run out or become too expensive to mine.

3. Workers prefer well paid less “dirty” tertiary jobs to primary jobs.

• Increased Tertiary employment has resulted from improvements in technology allowing micro electronics, research and biotechnology to grow.

• Secondary industries decline in MEDCs because of competition from Newly Industrialising Countries (NICs like Taiwan) that have cheaper labour costs.

• Changes are also occurring in LEDCs.

China's changing employment structure

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1960 1980 2000Year

Perc

enta

ge e

mpl

oyed

in s

ecto

r

Tertiary

Secondary

Primary

Characteristics of farm systems• Organic farming is farming that

takes place without the use of chemicals.

• Intensive farming is one that has high inputs of capital and/or labour. The idea is to maximise the amount of produce gained from a unit area of land.

• Extensive farming has low levels of input of labour or money and produces a low yield per unit area of land (e.g. Grain farming in the Prairies)

• Commercial farming is when a farmer produces food for sale.

• Subsistence farming is where most of the food produced is to be eaten by the farmers and little is left over for sale.

• Arable farms produce crops.• Pastoral farms rear animals.

The physical and human factors affecting a farmer’s choices

Physical factors Human factors

Soils – the fertility will affect the type of farming and whether or not the farmer uses fertilisers. On a loam soil arable farming usually takes place.

Market – The farm needs to be close to its market or to routes of communication that allow the farmer to sell his goods. Also, is there demand for the product?

Relief – flat land is perfect for arable farming while steep land tends to be used for grazing animals. Over 20° it is difficult to use the machinery needed for arable farming.

Cost of land – if the land is expensive then farmers must farm intensively to make a profit.

Climate – the key physical factor, both rainfall and temperature are important.

Tradition – farmers may have farmed in a certain way and may be reluctant to make changes .

E.G. Wheat needs temps of at least 15°C for 3 months and less than 750mm of rain to grow. Oats can grow at less than 15 °C and require over 1000mm of rain.

Government – through grants, tax barriers and subsidies governments like the EU and British government can have a major influence on farming.

Farmers face many decision when deciding what to grow or rear on their farm.The table opposite contains the factors the farmer need to consider.

Intensive wet rice farming from SE Asia (LEDC)

• Intensive wet rice farming has traditionally involved many people working on small plots of land maximising the amount of rice and other fruit and vegetable produce they can get out of that plot of land. Most of the produce is eaten by the farmers and only a small amount goes to market for sale, so this is subsistence farming.

• The inputs to a traditional wet rice farm include seeds, manure from oxen and other animals, lots of water from the wet climate and labour. The climate is hot and wet, soils are fertile, all ideal for wet rice farming.

• The processes include terracing hillsides, building retaining walls to keep rainwater, ploughing with the Oxen, sowing the seeds and harvesting.

• Outputs include rice, rice, rice and more rice. Some fruit and vegetables are produced.

• Recent pressures and changes are occurring in this type of farming. Genetically modified rice has been introduced that produces more crop, and farmers are under pressure to use pesticides and insecticides from big businesses and government.

• Our case study was the Da Meize Village in South Eastern China.

European Union Farming – Common Agricultural Policy (CAP)

• CAP was a government policy funded by the EU to help farmers. CAP use to spend 70% of the European Union’s total budget through the following ways

1. Subsidies – this was money given to farmers per head of livestock to help towards the cost of rearing them.

2. Set–aside – This was money given to farmers when they did not grow food on an area of their farm (£200 per hectare)

3. Guaranteed prices – Farmers were guaranteed that if their crops did not get a certain price at market the EU would make up the differences.

4. Quotas – a set amount of produce that a farmer can produce. If the more is produced the farmer is fined. This was introduced after the overproduction of milk.

5. Grants – this is money given to farmers who do activities that are environmentally friendly such as planting hedges.

Can you think of the positives and negatives of this system? (for EU and non EU farmers)

Case study – Home farm near Birmingham

• For many years British farmers had the price of their food subsidised by government. This support is being withdrawn leaving farmers with a shortfall in their income.

• Home farm in Birmingham has been affected. The owner, Mr Redfearn, has over 200 hectares and fertile sandy soils. The land is relatively flat, rain fall is 700mm and summer temperatures of 16°C. He is therefore not limited by physical factors and has a mixed farm where livestock (cows, sheep and bulls) are raised and crops grown.

• Mr Redfearn is more affected by human factors, Banbury and Uttoxeter are his local markets. His crops are sold to merchants who visit the farm.

Case study – Home farm near Birmingham

• Mr Redfearn has sold all of his cows because he was getting a very poor return on the milk they produced, only 8p a litre (for a product that sells for 45p a litre in the shops).

• The withdrawal of subsidies has meant that Mr Redfearn’s income from his cereal crops dropped by £40,000 between 1998 and 1999.

• These losses have meant that Mr Redfearn has had to do the following to diversify (find non farming activities to make money from his farm) and earn more income;

1. He stores up to 26 caravans on his farm for which he needed planning permission for £250 a year.

2. He will convert the old unused cow sheds into a bed and breakfast for businessmen who go to the nearby NEC in Birmingham.

3. Another possibility is for him to offer car parking at £3 per day.

4. Ponies are also kept on the farm at £100 a pony.

5. Other farmers have tried paintball, adventure sports, growing wood and turf to make money.

The physical, economic and human factors affecting the location of secondary industries in MEDCS

• There are several factors that influence the location of an industry including

1. Energy – often needed in manufacture of goods

2. Labour – the skill level and cost of workers is important.

3. Capital – businesses need money in order to get started.

4. Land – for secondary industry large areas fo flat cheap land are often needed.

5. Raw materials – if these are heavy (e.g. coal, limestone ad iron ore) then the factory needs to be close to raw materials.

6. Transport – roads, rivers and rail offer ways for businesses to move inputs and finished products.

7. Government policy – the British government used to give money to companies (e.g. Nissan) to locate in depressed areas (Sunderland!).

8. Markets – fragile goods need to be produced colse to their market, bulky goods must also be close because of the cost of transport.What factors would affect a steel

industries location? Which factors are most important and why?

Identifying Industrial Location Factors from maps and photos

Additional land is available for expansion.

This is the Nissan plant, attracted to the NE by government grants and a strong tradition of engineering in the region.

The A 19 offers a major north-south transport route for the shipping in of components needed to build the cars and the export of the finished product to a European market.

The site is close to the major cities of Newcastle an Sunderland, a handy and skilled workforce.

Identifying Industrial Location Factors from maps and photos

The Nissan plant occupies a site of over 2miles2

The room for expansion is clear here

A test track – fancy a drive?

This major transport axis is good for workers and the movement of finished products and components.

The river Wear offers another transport option

The Nissan site was built on a greenfield site, close to farming areas

Factors affecting the location of Hi-Tech Industry in MEDCs

• Hi-Tech industries are those that use research and technology to create products of high value e.g. medicines and electronics.

• Hi-tech industries are said to be footloose, not tied to a location (like the steel industry).

• Bracknell in the Thames valley has a high number of such firms, but why are they there?

1. Communications- Bracknell is located next to the M3 motorway and is within reach of London by train. The UK’s 2 major airports are no more than 60miles away.

2. The local labour force is skilled – Royal Holloway and Brunel Universities are close by offering computing degrees.

3. There are good leisure facilities in the region – including dry ski slope, cinema etc.

• Panasonic, ICL and Dell all have plants in Bracknell

LEDC industry – formal and informal industries

• LEDCs have different economies to MEDCs.

• Most people in MEDCs have formal jobs in which they have regular hours, a weekly set wage, pay taxes and reasonable working conditions.

• In LEDCs, while many people do have formal jobs many workers have Informal jobs. These jobs do not involve the payment of taxes, are often unskilled and labour intensive, require little money to set up and offer no protection to the worker if they are sick or fall upon hard times.

• Examples of informal jobs include shoe shining, beach vendors and small shanty town businesses, all rob governments of valuable tax money.

TNCs

• Trans National Companies are companies that operate globally. They tend to have their headquarters and management in their parent country and other factories around the globe. e.g. Nike is from the USA, but has branch factories in South East Asia.

• Fiat is an Italian car manufacturer with an annual turnover of 48 billion euros which operates in 64 different countries.

• Fiat opened a plant in Betem in Belo Horizonte in 1976 and this plant now produces 650 000 cars a year and employs 12,000 people.

Factor’s attracting a TNC to an LEDC - Fiat

• Why did Fiat open a plant in Brazil?1. The Brazilian government started a

motor industry in Brazil for long term employment, this created a market for cars.

2. The state of Mina Gerais offered loans, grants and cheap land to Fiat, cutting their costs.

3. Fiat could sell its cars to all of South America.

4. There was a large pool of workers earning half of a British motor industry worker.

5. Strikes are rare in Brazil.

• Fiat has since opened another factory in Brazil, with a £100million sweetener from the Brazilian government softening production costs.

• In your opinion, are TNCs good for a LEDC?