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Chap 6: World Agriculture

Chap 6: World Agriculture. OUTLINE. 1.  U.S. and Soviet Agricultural Policies in recent past 2.  A Model of How subsidies work/don't work 3.  Von Thunen Model

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Chap 6: World Agriculture

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  1. Chap 6: World Agriculture

  2. OUTLINE 1.  U.S. and Soviet Agricultural Policies in recent past 2.  A Model of How subsidies work/don't work 3.  Von Thunen Model The first sections will be for the students to read and review on their own. Study guide will be provided, the above two sections 5 and 6 will be discussed in class.

  3. 1.  U.S. Agricultural Policy A. Historical Past, 17th thru 19th century • stable prices • family farms • limited market size • environment had a direct impact on price • drought • http://www.agr.gc.ca/pfra/drought/maps/archives/n1e050930.pdf • http://water.usgs.gov/waterwatch/ • Versus bumper crop

  4. B. Late 19th and 20th century: Review 1. Transportation transforms market access (Globalization Starts) a. all markets become international b. love/hate relationship with American railroads the original "Bill Gates" and other robber barons: the Vanderbilts, Harrimans, Stanfords (as in Stanford U.) and Jay Gould

  5. c. Chronic American farm labor shortages transform Agriculture • the cotton gin, McCormick Reaper, Combine.... • Replace labor with capital and energy (industrialize agriculture) d. farm is a "factory" • maintain minimum labor costs • maximum profits

  6. 2. The "Good" War: WWI (The Benefits of Globalization for US Farmers) • American farmers make-up for European shortfalls • Get rich from destruction • World markets favor World war

  7. 3. The Roaring 20s • disaster on the American Farm, the great depression starts early • supply too great, • solution close "factories" (i.e. family farms -- note the "peaking behavior on the graph"). Number of farms hits a plateau during this period before the steep decline in the 1940s

  8. 4. The Great Depression of the 30s a. just when you thought things were bad • over supply couples with collapsing demand • international markets closed • plus environmental disastors (Dust Bowl)

  9. 5. Recovery: New Deal years and the 1940s • American style "Socialism" (so this is family [farm] values) -- Farm Subsidies Begin, more about this in the 50s • Also see model example later b. Another "Good" War: WWII c. The Marshall Plan

  10. How subsidies work

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