HGIA Chapter 6 - Jobs

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Agriculture Rural Land Use Key Topics
Subsistence Agriculture
Commercial Agriculture
Primarily for direct consumption by a local
population, usually small scale and low tech
Primarily for purpose of selling products for
money, often monocultures for economies of scale
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Intensive Land Use
Small-area farms or ranches High inputs of labor
high output per acre
Rice paddies, southeast China
Cattle ranch, northeast Colorado
Extensive Land Use
Large-area farms or ranches Low inputs of labor
low output per acre
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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 capital-intensive 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
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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
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First Agricultural Revolution
Invention of farming domestication of livestock
(8,00014,000 years ago) diffusion from several
source regions shift from hunter-gatherer to
agricultural societies
Probable culture-hearths of agriculture
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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
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Factors influencing location of agriculture
Climate and natural environment Culture
Economic factors
Urban market
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)
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Chiles agricultural exports Vegetables and
orchards near Santiago Regional produce warehouse
in Chile Market in Slovakia
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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 ConAgras brands Swiss
Miss Hunts Van Camps Marie Callenders Wesson He
brew National Slim Jim Egg Beaters Rosarita Chef
Boyardee ReddiWip Pam Peter Pan Orville
Redenbachers Healthy Choice Banquet
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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 Greater use of
fertilizer Increase use of irrigation Asias
rice production grew at annual rates of 3.0
until 1980s Yield growth rate exceeded high pop.
growth rates of the time
Rice plant
Sources FAO, IRRI (research organization devoted
to rice) part of global CGIAR effort at
improving yields of staple crops worldwide
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Post-Green Revolution (since 1980s)
Green Revolution Plusses Countries
self-sufficient in rice or even exporters (Thai,
Viet). Poor people benefited as yield increases
caused real price of rice to drop. Problems Succes
ses 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
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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)
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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
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Sectors of the Economy
Secondary
Primary
Tertiary
Quaternary
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Background on Economic Restructuring of the U.S.
and Canadian Economies
Job Competition
Figure 6.8 (p. 147)
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Structural change of the economy
Figure 6.10 (p. 149)
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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
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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 lower-wage countries, mainly China.
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Fixed and Variable Costs Influence the Optimum
Location for Economic Activity
Classical economic geography models focus mainly
on the variable cost of transportation
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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 mats needed)
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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

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Webers Theory of Location

• Webers 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

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Webers 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)

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Webers Theory of Location

• Agglomeration
• Weber recognized that clustering will result in a
  per unit savings
• Example

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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)
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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)
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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
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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.
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The recipe for making steel has changed (new
technology) How has this affected the location of
modern steel-producing areas?
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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
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Consider transport costs of a cars components.
Wheres a good place to locate your assembly
plant?
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Over 50,000 U.S. auto-making jobs in these
foreign-owned plants (New York Times data and
map, 2005)
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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.
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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)
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Economic Base Model
Figure 6.7 (p. 146)
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Multiplier Effect