Commercial Agriculture and Market Forces: The Von Thünen Model

1. Chapter 10 section 10 Commercial Agriculture and Market Forces:The Von Thünen Model

2. Terms/Concepts Agribusiness Von Thunen Model Government subsidies

3. Commercial Agriculture and Market Forces • Agribusiness • The system of commercial farming found in the developed countries

4. Von ThÜnen • Von ThÜnen model • explains importance of proximity to market in the choice of crops on commercial farms. • Johan Heinrich Von-Thünen

5. 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.

7. 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.

8. Productivity challenges • Surplus (greater yield per area of land) is produced because of efficient agricultural practices • new seeds • Fertilizers • Pesticides • Mechanical equipment • Management practices

9. 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

10. Terms/Concepts Agribusiness Von Thunen Model Government subsidies