Commercial Agriculture and Market Forces: The Von Thünen Model Chapter 10 section 10.
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Transcript of Commercial Agriculture and Market Forces: The Von Thünen Model Chapter 10 section 10.
Commercial Agriculture and Market Forces:
The Von Thünen Model
Chapter 10 section 10
Terms/Concepts
• Agribusiness• Von Thunen Model• Government subsidies
Commercial Agriculture and Market Forces
• Agribusiness– The system of commercial farming found in the
developed countries
Von ThÜnen
• Von ThÜnen model– explains
importance of proximity to market in the choice of crops on commercial farms.
– Johan Heinrich Von-Thünen
According to the model, later modified by geographers, a commercial farmer initially considers which crops to cultivate and which animals to raise based on market location.
Productivity challenges
• The experience of dairy farming in the United States demonstrates the growth in productivity.– Increased yield per cow (dairy farming) has
tripled.
• Commercial farmers suffer from low incomes because they are capable of producing much more food then is demanded by consumers in developed countries.– Surplus leads to low incomes.
Productivity challenges
• Surplus (greater yield per area of land) is produced because of efficient agricultural practices– new seeds– Fertilizers– Pesticides– Mechanical equipment– Management practices
Government subsidies
• Subsidy = a grant or contribution of money• U.S. government has 3 policies to address the
problem of excess productivity– Farmers are encouraged to avoid producing crops
that are in excess supply.– Government pays farmers when certain
commodity prices are low.– Government buys surplus production.
• Sells or donates it to foreign governments• Developed countries: encouraged to grow less food• Developing countries: struggle to increase food
production
Terms/Concepts
• Agribusiness• Von Thunen Model• Government subsidies