Transcript HGIA Chapter 6 - Jobs

Agriculture & Rural Land Use – Key Topics
Commercial
Agriculture
Subsistence
Agriculture
Primarily for purpose
of selling products for
money, often
monocultures for
economies of scale
Primarily for direct
consumption by a
local population,
usually small scale
and low tech
Intensive Land Use
Small-area farms or
ranches
High inputs of labor &
high output per acre
Cattle ranch, northeast Colorado
Rice paddies, southeast China
Extensive Land Use
Large-area farms or
ranches
Low inputs of labor &
low output per acre
Labor-Intensive
Agriculture
Large amount of human
work is applied per unit
of output
Top picture – Labor-intensive corn raising in
central Mexico.
Bottom picture – Corn exported from capitalintensive U.S. farms to the Mexican market
Capital-Intensive
Agriculture
Large amount of capital
(equipment and buildings used to
produce other goods) is applied
per unit of output
Subsistence – predominantly low-income regions
Intensive subsistence – subtropical monsoon areas
Shifting cultivation – tropical forests & savannas
Nomadic herding – semiarid and arid lands
Commercial – predominantly high-income regions
Crop farming – more humid climates
Livestock ranching - drylands
First Agricultural Revolution
Invention of farming & domestication of livestock (8,000–
14,000 years ago) + diffusion from several source regions =
shift from hunter-gatherer to agricultural societies
Probable culture-hearths of agriculture
Second Agricultural Revolution
Technological changes (starting 1600s in Western Europe;
spread by 1800s to North America)
Began with new methods: crop rotation, better horse collars
Later innovations: replace human labor with machines,
supplement natural fertilizers & pesticides with chemical
Beginnings of
commercialization
of agriculture
(production of
surplus for trade);
enabled widespread
urbanization
Factors influencing location of agriculture
• Climate and natural environment
Urban market
• Culture
• Economic factors
High transportation cost items
(vegetables, eggs, dairy, flowers)
Intensive land use – high land rent
Medium transportation cost items
(corn, soybeans, mixed farming)
More extensive land use – medium rent
Lowest transportation cost items
(forestry, wheat, livestock ranching)
Most extensive land use – lowest land rent
Simplified von Thünen model of agricultural land use (1826)
Chile’s
agricultural
exports
Vegetables and
orchards near
Santiago
Regional produce
warehouse in Chile
Market in Slovakia
Third Agricultural Revolution
Since 1960s
- hybridized grains for better yields (“Green Revolution”)
- greater reliance on synthetic fertilizers
- genetically engineered crops
- vertical integration of ownership (e.g., Cargill, ConAgra, ADM)
- globalization of production
A partial list of ConAgra’s brands
Swiss Miss
Hunt’s
Van Camp’s
Marie Callender’s
Wesson
Hebrew National
Slim Jim
Egg Beaters
Rosarita
Chef Boyardee
ReddiWip
Pam
Peter Pan
Orville Redenbacher’s
Healthy Choice
Banquet
“Green Revolution” –
1960s -1980s
Rice - staple food for 2.5 billion
Asians - provides 2/3 of calories
for Asians with rice-based diets
Green Rev – Raised yields
* Improved rice strains
Rice
plant
Sources: FAO, IRRI (research
organization devoted to
rice) – part of global CGIAR
effort at improving yields of
staple crops worldwide
* Greater use of fertilizer
* Increase use of irrigation
Asia’s rice production grew at
annual rates of 3.0% until 1980s
Yield growth rate exceeded high
pop. growth rates of the time
Green Revolution Plusses:
Countries self-sufficient in rice
or even exporters (Thai, Viet).
“Post-Green Revolution”
(since 1980s)
Poor people benefited as yield
increases caused real price of
rice to drop.
Problems
Successes led to less concern
about food security, and less
investment in irrigation, agric research, and rural infrastructure.
Growth rate in rice production declined during 1985-95 due to
drop in growth rate of rice yields.
In most places, despite increasing use of fertilizers, further
increases in yields became harder to achieve and more costly.
www.fao.org: Mobilising science for global food security
Globalization of the Cut-Flower Industry
Kenya has become the European Union's biggest source of flower imports
and overtaken Israel as market leader. It has a 25% market share, beating
Colombia and Israel, which each have about 16%.
Two thirds of these blooms go to the Netherlands, which dominates the
trade in cut flowers worldwide through its auction halls where Dutch
wholesalers buy flowers for re-export to markets as far away as the United
States and Japan.
Valentine's Day is a big date for Kenyan growers, thanks to the country's
perfect match of high altitudes and equatorial sunshine. Roses make up
74% of Kenya's flower exports, followed by carnations which are the most
popular flower in Britain at less romantic times because they last longest.
Source – www.bbc.co.uk
Flower
industry
workers in
Kenya (left)
and Colombia
(right)
Third Agricultural Revolution
Benefits
Reduced uncertainties in
agriculture
Greater global exchange
of ag products
Increased yields
Costs
Increased dependence on
fossil fuels
Reliance on chemical
inputs
Less global diversity of
food products
Concentration of
pollutants
Sectors of the Economy
Figure 6.11 (p. 150)
Primary
Secondary
Figure 6.1 (p. 138)
Tertiary
Quaternary
Background on Economic Restructuring
of the U.S. and Canadian Economies
Job Competition
Figure 6.8 (p. 147)
Structural change of the economy
Figure 6.10 (p. 149)
Least-Cost Location Theory
Cost minimization is half of profit maximization
equation (along with maximizing revenues)
Cost minimization theory:
- labor-cost minimization
- transportation cost minimization
Cost minimization - an industrial location strategy
that seeks to minimize what the firm pays to
produce and distribute its products or services
Minimizing Labor Cost
Maquiladoras – foreign-owned
assembly plants in Mexico
(mostly textiles and consumer
electronics)
Over 11,500 maquiladoras
along border with U.S.; employ
2 million+ Mexicans
Revenues from maquiladoras,
exceed make up 85% of trade
between Mexico and U.S.
Sources: PBS & Ingolf Vogeler
Average work week is 60-70 hours;
wages about $5.75 per day. Women
are 70% of maquiladora workforce.
Since 2000, some maquiladoras
have closed as corporations move
assembly-line jobs to even lowerwage countries, mainly China.
Fixed and Variable Costs Influence the
Optimum Location for Economic Activity
Classical economic geography
models focus mainly on the
variable cost of transportation
Determining
the best
location for
a mfg. plant
with raw
materials in
Minnesota,
Florida, and
Texas & the
market in
New York
(but with
differing
amounts of
raw mat’s
needed)
Weber Triangle
• Three factors:
– Transport costs
– Labor costs
– Agglomeration
• Transport costs:
– One market and two
sources:
• Equal distance and
shipping costs dictates
a market location
• Two weight-losing
materials results in an
intermediate location
Weber’s Theory of Location
• Weber’s theory results in 3 generalizations:
– Using pure materials in the production process
will always dictate a market location
– Weight-loss materials usage will pull the plant
closer to the sources
– Intermediate location chosen most often
• No handling costs at terminal
Weber’s Theory of Location
• Labor Costs:
– Location chosen always has least combined
costs
• A location my have higher transport costs, but more
inexpensive labor
– Isocheims: lines of equal transport cost
– Isodapane: line of total transport costs (sum of
isotims)
Weber’s Theory of Location
• Agglomeration:
– Weber recognized that clustering will result in a
per unit savings
– Example:
Transportation Cost Minimization
Raw Material Oriented
Tendency for industry to locate near its source of
raw materials in order to save on transport costs
Usually occurs when raw materials lose weight in
the production process (e.g., paper, steel)
Transportation Cost Minimization
Market Oriented
Tendency for industry to locate near population
centers in order to save on transport costs
Occurs when product is more costly to transport
than raw materials (e.g., beverages, glass)
Transportation Cost Minimization
Break-of-Bulk Oriented
Location between sources of raw materials and
markets – for products that must be divided and
shipped from a central point of entry
Intermodal transportation – e.g., moving from rails
to trucks or ships to trucks, or ports to pipelines
Where is the best
location for a steel
manufacturing plant?
Recipe for steel (traditional)
Coal = 2 to 3 tons (+ energy*)
Iron ore = 1½ to 2 tons
Limestone = ¼ to ½ ton
Mix all solid ingredients. Heat
at about 600º F until
thoroughly melted.*
Pour molten blend into molds.
Cool and serve. Makes one
ton of finished steel.
The recipe for making steel has changed (new technology)
How has this affected the location of modern steelproducing areas?
Shipbreaking
industry,
Bangladesh
Shipbreaking yards in Bangladesh alone dismantle about 90 giant ships a year, mostly oil
tankers, generating millions in revenue, employing tens of thousands, and providing a
significant proportion of the iron and steel used by local industry. However, there is a dark
side to the industry in which the workers must toil in extremely hazardous conditions that
frequently lead to death or serious injury and which is tremendously harmful to the
environment. ... A majority of ships are built in South Korea and China, filling orders
placed by Japan, the UK, the US, Norway, Singapore and Denmark. Until the 1970s,
shipbreaking was done in the countries of origin, using heavy machinery on salvage decks.
But increasing environmental regulations and labour costs resulted in the transfer of this
work -- first to Korea and Taiwan, and then to South Asia after the Asian Tigers upgraded
away from this work.
Source: www.sos-arsenic.net
Consider transport costs of a car’s components.
Where’s a good place to locate your assembly plant?
Over 50,000
U.S. automaking jobs
in these
foreignowned
plants (New
York Times
data and
map, 2005)
The cost of transporting data has declined to near zero
Low transmission
costs, plus ability to
digitize data,
revolutionized the
location choices for
high-tech industry
Source: Probe Research, Inc., Telcordia (Bellcore); Progressive Policy Institute.
“Post-Fordist” Production – High Tech Industry
Adapting the traditional models of economic geography
Greater flexibility of production
Less reliance on storage of inventory – seek prompt
delivery of goods needed for production (“just-in-time”)
Suppliers’ location
Need to have access to fast delivery systems (= airports)
Agglomeration of management
Still occurs! High-tech innovators locate closer to
airports; universities; amenities; venture capital (tends
to be a “footloose” industry)
Internationalized spatial division of labor
Lower labor costs needed for production – industry
locates manufacturing in lower wage areas (secondary)
but tech and management stays in core area (quaternary)
Economic Base Model
Figure 6.7 (p. 146)
Multiplier Effect