Von Thunen Model

• Used to explain the importance of proximity to market in the choice of crops on commercial farms

• 1826 Germany• Cost of land vs. Cost of transporting to market• The value of the yield per hectare• The cost of transporting the yield per hectare

Von Thunen Model

Von Thunen Today

• Still a good basis for understanding farmer considerations but…• Timber forests no longer surround cities• Refrigeration and trucks and highways allow farms to be farther away• Not all farms grow crops just for human consumption anymore

(ethanol, corn plastics, food for livestock)

Who was von Thünen?

• German farmer and economist• 1826 wrote down his ideas• Noticed that one crop or commodity gave way to another as one

moved away from the market (city)• Each market, or city, had its own “concentric rings” around it• Also noticed that farmers near the market produced very different

things than farmers far from the market

Assumptions of the model

• The market is a central Isolated State• The Isolated State is surrounded by forest• The terrain is homogeneous, flat, isotropic plane and has no rivers or

mountains. There are no barriers to transport for farmers to bring their goods to market

• Soils and climate are even and consistent• Farmers behave rationally to maximize profits

The classic model

A “modernized” look

Yet, another look

http://www.csiss.org/classics/uploads/vonthunen2.jpg

Main factors of v.T.

• Land rent or cost = Bid Rent• Labor costs• Transport costs (distance to market)• Production costs

The classic model again

Modern usefulness of von Thünen:What has changed?

• Refrigeration and freezing• Preservatives – vacuum packing, canning, chemical and natural

preservatives• Modern transport systems – containers, trucks, ships, planes - flowers

flown into NYC from the Caribbean• Factories/Agribusiness or Industrial Agriculture• Where do Farmer’s Markets fit into von Thünen?

Why do farmers face economic difficulties?• Both commercial and subsistence farmers face the same challenge:

money. But for different reasons.

Commercial Challenges

• Able to produce large quantity high supply, same demand, so low prices

• Many MDC governments must provide subsidies• Example: 1960s: 20 million dairy cows; 63 million tons of milk• 2005: 9 million dairy cows; 90 million tons of milk• Market is saturated; low pop growth in MDCs; and change in price

doesn’t usually change consumer preferences.

US Solutions

• 1. Farmers are encouraged to avoid producing crops that are in excess supply

• Plant fallow crops instead

• 2. Government sets a target price for the commodity and pays framers the difference between the target price and the market price

• 3. Government buys surplus, sells or donates to foreign countries.

Sustainable Agriculture

• Organic farming• Sensitive land management• Limited use of chemicals• Better irrigation practices

What is the future of organic?

• Despite higher costs, will probably increase• Lots of media attention• Health concerns/chemical concerns• Conspicuous consumption/green lifestyle• Marketing/supermarket branding• More sustainable practice

Subsistence Challenges

• Growing population in LDCs• International Trade Approach—need to grow food to export, not just

consume

Challenges with International Trade

• Decision to grow for export or local consumption• Affording machinery• Genetically Modified Foods• Drug Crops

Boserup Thesis on how to increase food• Forest Fallow (20 years)• Bush Fallow (10 years)• Short Fallow (2 years)• Annual Cropping (few months)• Multicropping (never left fallow)• Also, new methods: tools, terracing, manure, weeding, irrigation. Use

excess population to help with labor, output stays the same per person.

Strategies to Increase Food

• Expand the land use• Human pop. growing faster than arable land• Overgrazing, desertification, urbanization, flooding

• Increase the productivity of land• Green Revolution

• Identify new food sources• Oceans, higher protein cereals, rarely consumed foods

• Increase exports from other countries• US, but now also South and SE Asia

First Agricultural Revolution

10,000 – 12,000years ago, closelyaligned with thedeclining IceAge/Neolithic Period

Accompanied by amodest population explosion

http://tiger.towson.edu

Second Agricultural Revolution

Agriculture underwent significant change during the 17th and 18th centuries. Changesincluded – tools and equipment, crop care…

www.mathewsmuseum.org

Second Agricultural Revolution

Additional changes included soil preparation, fertilization, harvesting techniques improved, foodstorage improved.

http://image.guardian.co.ukhttp:/hort.ifas.ufl.edu

Third Agricultural Revolution – The Green RevolutionLaboratories and plant nurseries use biotechnology andgenetic engineering togain higher yields ofgrain.

Hybrids (Merritt Corn)IR8 Rice (higher yield)What is a cultivar?

http://typesofcorn.com/ www.mindfully.org

Short Term Effects of Green Revolution

Famines have beenabated.However genetic products still require proper soil andwater along with fertilizationand pesticides.Some farmers do not haveaccess or money for geneticseeds and are at acompetitive disadvantage. http://wallpapers.bulhostingcom