Chapter 8-3 by 4A83AJ


									                        Chapter 8-3
Commercial 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
   – 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.
            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                                                2
model is less predictable
    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

      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..)
• 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)
 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.

                 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.

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

 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.

             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.
  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
• In 1980s, many iron ore-producing plants were shut down due to the cheap
• 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)
                     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 -
• 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
Oil discoveries and Production



   1860                                                 2100

  data source: Scientific American, March 1998
Evolution of gasoline price

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