unit 2 - von thunen + weber

SHAZARD MOHAMMED © - Geography


CAPE GEOGRAPHY SYLLABUS – UNIT 2: MODULE 2 – ECONOMIC GEOGRAPHY

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UNIT 2

MODULE 2: ECONOMIC ACTIVITY

On completion of this Module, students should:

1. appreciate the pattern of man’s economic activities;

2. develop appropriate skills and techniques in Geography;

3. have the ability to apply appropriate investigative and practical techniques

SPECIFIC OBJECTIVES – AGRICULTURAL EMPHASIS

Students should be able to:

1. classify economic activity

2. explain the factors influencing the types and organization of agriculture;

3. describe the factors affecting the location and development of industries;

4. evaluate the effects of agriculture, and tourism on the environment in MDC’s and

LDC’s;

5. analyze the factors contributing to the development of tourism;

6. account for economic changes in agriculture and industry;

7. use topographical maps to analyze the location of economic activities

8. apply appropriate investigative and practical techniques.




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The Geography of

griculture

Around ten to twelve thousand years ago, human began to domesticate plants and animals for

food. Before this first agricultural revolution, people relied on hunting and gathering to obtain

food supplies. While there are still groups of hunters and gatherers in the world, most societies

have switched to agriculture. The beginnings of agriculture did not just occur in one place but

appeared almost simultaneously around the world, possibly through trail and error with different

plants and animals or by long term experimentation. Between the first agricultural revolution

thousands of years ago and the 17th century, agriculture remained pretty much the same.

In the seventeenth century, a second agricultural revolution took place which increased

efficiency of production as well as distribution which allowed more people to move to the cities

as the industrial revolution got under way.

The eighteenth century's European colonies became sources of raw agricultural and mineral

products for the industrializing nations.

Now, many of the countries, which were once colonies of Europe, especially those in Central

America, are still heavily involved in the same types of agricultural production as they were

hundreds of years ago. Farming in the twentieth century has become highly technological in

more developed nations with geographical technologies like GIS, GPS, and remote sensing

while less developed nations continue with practices which are similar to those developed after

the first agricultural revolution, thousands of years ago.

About 45% of the world's population makes their living through agriculture. The proportion of

the population involved in agriculture ranges from about 2% in the United States to about 80%

in some parts of Asia and Africa. There are two types of agriculture, subsistence and

commercial.

There are millions of subsistence farmers in the world, those who produce only enough crops to

feed their families.

Many subsistence farmers use the slash and burn or swidden agricultural method. Swidden is a

technique used by about 150 to 200 million people, and is especially prevalent in Africa, Latin

America, and Southeast Asia. A portion of land is cleared and burned to provide at least one and

up to three years of good crops for that portion of land. Once the land can no longer be utilized,

a new patch of ground is slashed and burnt for another round of crops. Swidden is not a neat or

well-organized method of agricultural production by it is effective for farmers who don't know

much about irrigation, soil, and fertilization.




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The second type of agriculture is commercial agriculture, where the primary purpose is to sell

one's product at market. This takes place throughout the world and includes major fruit

plantations in Central America as well as huge agribusiness wheat farms in the Midwestern

United States.

Geographers commonly identify two major "belts" of crops in the U.S. The wheat belt is

identified as crossing the Dakotas, Nebraska, Kansas, and Oklahoma. Corn, which is primarily

grown to feed livestock, reaches from southern Minnesota, across Iowa, Illinois, Indiana, and

Ohio.

J.H. Von Thunen developed a model in 1826 (which wasn't translated into English until 1966)

for the agricultural use of land. It has been utilized by geographers since that time. His theory

stated that the more perishable and heavier products would be grown closer to urban areas. By

looking at the crops grown within metropolitan areas in the U.S., we can see that his theory still

holds true. It is very common for perishable vegetables and fruits to be grown within

metropolitan areas while less-perishable grain is predominantly produced in non-metropolitan

counties.

Agriculture uses about a third of the land on the planet and occupies the lives of about two and a

half billion people. It's important to understand where our food comes from.




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CONTENT

1. Agriculture:

(i) The characteristics of primary, secondary, tertiary, quaternary and

quinary economic activites.

Sectors of the Economy

Primary, Secondary, Tertiary, Quaternary and Quinary Industries

A nation’s economy can be divided into various sectors to define the proportion of the population

engaged in the activity sector. This categorization is seen as a continuum of distance from the natural

environment. The continuum starts with the primary sector, which concerns itself with the utilization of

raw materials from the earth such as agriculture and mining. From there, the distance from the raw

materials of the earth increases.

Primary Sector

The primary sector of the economy extracts or harvests products from the earth. The primary sector

includes the production of raw material and basic foods. Activities associated with the primary sector

include agriculture (both subsistence and commercial), mining, forestry, farming, grazing, hunting and

gathering, fishing, and quarrying.

The packaging and processing of the raw material associated with this sector is also considered to be part

of this sector.

In developed and developing countries, a decreasing proportion of workers are involved in the primary

sector. About 3% of the U.S. labour force is engaged in primary sector activity today, while more than

two-thirds of the labour force were primary sector workers in the mid-nineteenth century.




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Secondary Sector

The secondary sector of the economy manufactures finished goods. All of manufacturing, processing,

and construction lies within the secondary sector. Activities associated with the secondary sector include

metal working and smelting, automobile production, textile production, chemical and engineering

industries, aerospace manufacturing, energy utilities, engineering, breweries and bottlers, construction,

and shipbuilding.

Tertiary Sector

The tertiary sector of the economy is the service industry. This sector provides services to the general

population and to businesses. Activities associated with this sector include retail and wholesale sales,

transportation and distribution, entertainment (movies, television, radio, music, theater, etc.), restaurants,

clerical services, media, tourism, insurance, banking, healthcare, and law.

In most developed and developing countries, a growing proportion of workers are devoted to the tertiary

sector. In the U.S., more than 80% of the labor force are tertiary workers.

Quaternary Sector

The quaternary sector of the economy consists of intellectual activities. Activities associated with this

sector include government, culture, libraries, scientific research, education, and information technology.

Some consider there to be a branch of the quaternary sector called the quaternary sector, which includes

the highest levels of decision making in a society or economy. This sector would include the top

executives or officials in such fields as government, science, universities, non-profit, healthcare, culture,

and the media.

An Australian source relates that the quaternary sector in Australia refers to domestic activities such as

those performed by stay-at-home parents or homemakers. These activities are typically not measured by

monetary amounts but it is important to recognize these activities in contribution to the economy.




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The Industrial Enlightenment Theory

Towards Quinternary Industries1

We have long been told that is it not the "production of goods" that will form the core of

industry in the 21st century, as in the past, but "intellectual creativity".

Firstly, my understanding of the industrial enlightenment theory is as in Table 2. Current

management theory bundles all tertiary industries together. I divide these industries as below

into tertiary, quaternary and quinternary industries.

Table 2: The New Industrial Enlightenment Theory - From Primary to Quinternary Industries

[1] Tertiary industries are services that store products created by primary and secondary

industries for periods of time or transport the same across distance. Airline companies,

distribution companies and delivery companies fall within this category.

[2] Quaternary industries handle real data. Real data means information related to goods

handled by primary and secondary industries or information related to tangible objects in

1 http://www.lec-jp.com/speaks/info_027.html

http://www.lec-jp.com/speaks/info_027.html




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existence in the world. Most companies belonging to this category use computers, such as travel

companies and information searching service providers.

[3] Quinternary industries handle creative information. Creative information is a product of the

brain. That which is the province of educational institutions, scientific hypotheses and theories,

is creative information. This is the rightful central stronghold of intellectual property. Secondary

industry patent rights are no longer the pinnacle of intellectual property. As patent rights cannot

continue to exist separate from tangible property, they cannot be given pre-eminence in our

intellectual property policy as production shifts to China and elsewhere.

It is the production of absolutely 100% intellectually creative products that we should make the

core of intellectual property policy. These products are not focused on tangibles; both the direct

and indirect sections of the business are made up of intellectual information systems. This is the

essence of quinternary industries. All products for which the right hand side of the brain is

responsible, including the arts, music, painting and animation belong to this category, as do

Sony Computer Entertainment (SCE) to Nintendo!

Whilst creative information is divided in this way into the scientific and artistic fields, in both

cases it is arguable that the thing that becomes the product is not something that exists in the

outside world, but creative information from the imagination. Creative information is something

the brain has made and which has monetary value. This is the product handled by today's typical

service industry.

As tertiary, quaternary and quinternary industry categories do not yet exist [in Japan national

policy focus is indeterminate]. One must not lose sight of the fact that, no matter what, the core

of the service industry is quinternary industries. If one calls the Microsoft operating system to

mind its influence is as plain as day. The fact that Microsoft produced world-best results

precisely symbolizes that the nucleus of modern wealth has become creative products of the

brain. What our country needs to put effort into now is not steel, cars or electricity. Japan has,

until now, desired to have world pre-eminence in tangible products. However, it is no longer the

19th or 20th century; we are now in the 21st century. The core of our nation's wealth has

changed so that it is not heavy industry but the creative goods produced by our brains. It is

quinternary industry that will become the core of future industry. In the past, the Ministry of

International Trade and Industry cultivated industry as a national policy; however that method

will be focused on this area in future.

The Quinternary Service Industries of Today

The Quinternary service industries of today are those where the brain produces intellectually

creative goods, such as education, medical services, welfare and child care. There are more

within the administrative services carried out by local governments. Many are in fields where

the Council for Regulatory Reform has been doggedly battling for deregulation. If these

industries are released from regulatory controls, they will, as in the US and in the UK, become

businesses able to respond to consumer needs in accordance with the logic of capitalism.




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According to that report, if the productivity of every hospital was raised to equal that of private

sector best practice (mainly of incorporated medical institutions), there would be room for a

20.4% increase in productivity in medical services overall. In the institutionalized nursing care

sector management efficiencies including the optimization of scale would increase cost-

effectiveness by 15.5% and productivity in child care centres would rise by 33.9%. Whilst at

present the total size of the market in these fields is roughly 4.3% of GDP, it is mooted that

these productivity increases would leave room for a 0.92% of GDP increase in overall economic

productivity.

I wonder how the education sector in which our company is engaged would fare. Whilst there

are no statistics available, from my own practical experience I believe that the market is larger

than that for medical services, the reason being that education begins at birth and continues as

lifelong education. As society develops, the fields with expectations of education also increase.

The market is worth 10 trillion yen even now and will no doubt exceed 20 trillion yen in the

midterm. This is greater than current sales in the car industry.

There are other service industries, including in the field of welfare, nursing care, security, the

environment and public peace and order that local governments are currently undertaking

inefficiently as administrative duties.

These will no doubt come into the sphere of GDP, as one after another they are opened to the

private sector in formats such as Public-Private Partnership (PPP), Private Finance Initiatives

(PFI), the private management of public facilities, sub-contracting to private enterprise and

transfers to private enterprise. In this manner, the service industries are ever expanding, each

with intellectually created services as its essence. These industries will, as quinternary

industries, take the place of the current large-scale industries and having acquired citizenship,

lead to the revitalization of our nation. Thinking people call it "Japan re-born".

Quinternary Industries and International Earnings and Expenses

Cutting-edge medical treatments born of intellectual services are attracting patients from all

over the world. Numbers of patients coming to Japan will make it possible to recover from

depleted earnings from travel and tourism. Further, if we have universities training and

educating in globally cutting-edge practical technology then large numbers of foreigners will be

drawn to Japan, in the same manner as with medical treatments. Moreover, WTO negotiations

on the liberalization of occupations such as those of lawyers and patent attorneys are underway.

These are also businesses that deal in intellectually creative products or quinternary industries.

These industries will surely compensate for the deficits in the tangible goods industries.




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(iii) The:

[environmental],

[cultural] and

Political* factors

which influence the Caribbean and the EU (for example, transnational trading

blocs, government policies, changes in trading agreements)

* NB: I am only doing this part for you.

Farming is a multifaceted activity, that is not only based on the climate but more so now in a

ever globalised environment, influenced by political decisions. The European Union is one of

the world’s largest trading/economic blocs.

Key EU export products are machinery, transport equipment and chemicals. The EU imports

mainly agricultural and energy products from Latin America. Although the Latin American-

Caribbean region represents almost 10% of the world's population, it only accounts for around

3% of the global GDP. All Latin American and Caribbean countries benefit from preferential

access schemes for their exports to the EU market. The EU is also a large provider of

development assistance to the region via the European Development Fund (EDF).2

The EU is a huge investor in Latin America, which is relatively open to foreign

investment. The EU is the largest investor in many Latin American countries. EU investment

stocks in the region amount around €400bn, around 12% of total EU FDI. The EU also attracts

FDI from Latin America, mainly from Brazil, Chile and Venezuela.

Although proximity makes the US a natural export market for the region, most Latin American

countries have sought to diversify their economies away from dependence on the US market.

This means seeking new markets in Europe and strengthening trade among the countries of

Latin America via regional integration processes.

Both Chile and Mexico have concluded Free Trade Agreements with the EU which cover both

trade and investment. Since these agreements are in place, bilateral EU trade with Mexico and

Chile grew by 70% and 250% respectively.

The EU is also negotiating Free Trade Agreements with Central America (Costa Rica, El

Salvador, Guatemala, Honduras, Panama, Nicaragua) and the Andean Community (Bolivia,

Colombia, Ecuador, Peru), which are designed both to boost trade with the EU but also to create

regional markets among these countries. These negotiations were launched in 2007 and have

made good progress.

2 European Development Fund (EDF) -

http://europa.eu/legislation_summaries/development/overseas_countries_territories/r12102_en.htm





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The EU is also negotiating an FTA with Mercosur3 (Brazil, Argentina, Paraguay, Uruguay,

Venezuela). These talks are closely tied to the result of the Doha Round of WTO trade talks and

have been temporarily suspended until greater clarity on the likely outcome of those

negotiations is possible.

On December 17 2007 the European Commission initialed an Economic Partnership

Agreement with Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, the Dominican

Republic, Grenada, Guyana, Haiti, Jamaica, Saint Lucia, Saint Vincent and the Grenadines,

Saint Christopher and Nevis, Surinam, and Trinidad and Tobago (the CARIFORUM

countries). The EPA fully opens the EU market to Caribbean exports and gradually

opens the Caribbean market to new trade from the EU.

Trade in goods with the European Union is important for the 15 Caribbean ACP countries

(Antigua and Barbuda, The Bahamas, Barbados, Belize, Commonwealth of Dominica,

Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St. Kitts and Nevis, Saint Lucia, St.

Vincent and the Grenadines, Suriname, and Trinidad and Tobago).Caribbean exports

to the EU have increased by more than 40% between 2004 and 2006 to over €4 billion, mainly

due to the increase in fuel exports.

EU imports from CARICOM have traditionally been dominated by oil, aluminium oxide, rum,

sugar, and bananas.

3 Mercosur was created in 1991 by the Treaty of Asuncion and encompasses four Latin American countries:

Argentina, Brazil, Paraguay and Uruguay. The European Union has favoured the strengthening of Mercosur and

supported its initiatives, notably through the Interinstitutional Agreement to provide technical and institutional

support for its newly created structures. http://ec.europa.eu/external_relations/mercosur/index_en.htm &

http://actrav.itcilo.org/actrav-english/telearn/global/ilo/blokit/mercosur.htm

http://ec.europa.eu/external_relations/mercosur/index_en.htm

http://actrav.itcilo.org/actrav-english/telearn/global/ilo/blokit/mercosur.htm




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The Cotonou Agreement: A General Overview

A History of the Agreement

The European Development Fund (EDF) is the main instrument for providing Community

aid for development cooperation in the ACP (African, Caribbean and Pacific) States and OCT

(Overseas Countries and Territories). The 1957 Treaty of Rome made provision for its

creation with a view to granting technical and financial assistance, initially to African

countries which at that time were still colonised and with which some Member States had

historical links.

The EDF does not yet come under the Community's general budget. It is funded by the

Member States, is subject to its own financial rules and is managed by a specific

committee. The aid granted to ACP States and OCTs will continue to be funded by the EDF,

at least for the period 2008-2013.

Each EDF is concluded for a period of around five years. Since the conclusion of the first

partnership convention in 1964, the EDF cycles have generally followed the partnership

agreement/convention cycles. The most recent and examinable Agreements are the

following:

Fourth EDF: 1975-1980 (Lomé I Convention)

Fifth EDF: 1980-1985 (Lomé II Convention)

Sixth EDF: 1985-1990 (Lomé III Convention)

Seventh EDF: 1990-1995 (Lomé IV Convention)

Eighth EDF: 1995-2000 (Lomé IV Convention and the revised Lomé IV)

Ninth EDF: 2000-2007 (Cotonou Agreement)

Tenth EDF: 2008-2013 (Revised Cotonou Agreement)

The development aid provided by the EDF forms part of a broader European framework.

Within the European Union, the funds of the Community's general budget may be used for

certain types of aid. Moreover, in addition to managing part of the EDF's resources (loans

and risk capital), the European Investment Bank (EIB) will contribute a total of 1.7 billion

from own resources for the period covered by the ninth EDF.

The tenth EDF covers the period from 2008 to 2013 and provides an overall budget of EUR

22 682 million. Of this amount, EUR 21 966 million is allocated to the ACP countries, EUR

286 million to the OCT and EUR 430 million to the Commission as support expenditure for

programming and implementation of the EDF. The amount for the ACP countries is divided

accordingly: EUR 17 766 million to the national and regional indicative programmes, EUR 2

700 million to intra-ACP and intra-regional cooperation and EUR 1 500 million to

Investment Facilities. An increased share of the budget is devoted to regional programmes,

thereby emphasising the importance of regional economic integration as the basic

framework for national and local development. An innovation in the tenth EDF is the

creation of "incentive amounts" for each country.




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The Member States have their own bilateral agreements and implement their own

initiatives with developing countries that are not financed by the EDF or any other

Community funds.

Objectives, Principles, and Elements of the Agreement

The objectives of the Cotonou Agreement, stated in Article 1, are to reduce and eventually

eradicate poverty, promote sustainable development, and gradually integrate the ACP

countries into the world economy. The fundamental principles, stated in Article 2, include:

the equality of the partners,

definition by the ACP countries of their development strategies, and

Participation of non-state actors.

The Cotonou Agreement takes some of the Lomé Convention’s essential elements,

including the mutual obligations feature of Lomé, which called for the respect for human

rights and democratic principles. A violation of these elements under Cotonou by the ACP

states could trigger a consultation mechanism possibly leading to a suspension of the

cooperation.

Lomé vs. Cotonou: A Comparison

The first and probably most radical change in this new Cotonou Agreement is the

1. The eventual phasing-out of the ACP’s non-reciprocal trade preferences.

The trade preferences system will eventually be replaced by a set of Economic Partnership

Agreements (EPAs) that will tie nondiscriminatory trade policies with developmental aid.

As a result, the EPAs are in essence Free Trade Agreements (FTAs), with regional groupings

of ACP countries where each party undertakes to abolish restrictions on imports from the

other party.

One key difference between EPAs and FTAs, however, is that the ACPs will receive funding

from the EDF and the European Investment Bank (EIB) to facilitate their implementation of

the EPAs.

Negotiations for the EPAs started in September 2002, and these new agreements should be

completed by 2008 with periodical reviews in 2004 and 2006. Moreover, there is a

transitional period for implementation of the EPAs, which can last up to twelve years.

2. Aid Entitlements: The second difference between Lomé and Cotonou relates to

the role of performance in aid management. Under Lomé, aid was granted to the ACP

states regardless of their political and economic performance.




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However, as of 2008, the Cotonou Agreement marks the end of the “aid entitlements,” that

is, fixed allocations regardless of a country’s political and economic performance. The EU

will now give aid on the basis of two criteria:

level of development, and

regional integration projects. This implies that the EU can use the

resources for the ACP in a more selective and flexible way.

In practice, it means that more money can be channeled to “good performers” and that the

share for “bad performers” can be reduced. The programming of aid resources, therefore,

is a strategic management tool, aimed at ensuring that EU support is not wasted on a given

country or region.

3. Stronger Political Dialogue: The third major contrast with the Lomé

Convention: a stronger political dialogue for the ACP-EU partnership. Discussion will cover

a broad range of political issues that fall outside traditional development cooperation.

These issues include peace and security, the arms trade, migration, drugs and organized

crimes, and religious or racial discrimination.

4. Extending the Partnership to New Actors: Unlike Lomé, which focused on the

participation of central governments, this new feature encourages local and regional

authorities, civil society, and the private sector to participate as well. Among the new

actors, the most attention is given to the private sector. Its role “as the engine for

development” is explicitly recognized




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Problems with the Cotonou Agreement

The Effects of the Agreement on the Small Island Economies of the Caribbean

Lomé and Bananas

The Lomé Convention conceded certain trade preferences to the fifteen ACP members

located in the Caribbean, many of which are small island nations that rely on banana

production for their economic growth. Lomé essentially guaranteed these countries a

certain percentage of the EU banana market.

Certain ACP members especially benefited from this feature of Lomé. The Windward Islands

(Dominica, St. Lucia, Grenada, and St. Vincent), former colonies of the United Kingdom,

represent four small Caribbean nations that survive, in large part, by exporting bananas to

the EU under the auspices of the Lomé Convention.

In fact, some have argued that bananas are the “only legitimate year-round crop that can

viably be cultivated in the Caribbean to provide a regular weekly income to small farmers”

because over one-third of the population in the Windward Islands depends on the banana

industry for support.For example, thirty-three percent of Dominica’s labor force and

seventy percent of St. Vincent’s population are directly or indirectly involved in the

production and marketing of bananas.

Cotonou and Bananas

Specific negative ramifications for the region in the event of the eradication of the Lomé

banana trade preferences could include:

unemployment, generating social and political unrest,

a rise in drug trade,

increased illicit emigration to the United States, and

an inability to service foreign debts. For example, the World Bank claims

that any adverse change in the trading environment would have a “major

impact” on Dominica, an island in which thirty percent of the total

population already lives below the poverty line. Similarly, in reference to

the island of St. Vincent, the World Bank has predicted that a change in

the banana industry would cause unemployment, reduced foreign

investment, and other major “devastating effects.”

Removing the trade preferences may condemn thousands of people to poverty and

hardship because many farmers rely on the weekly income from bananas to pay their

household costs. This change will therefore contradict the goals of the Cotonou Agreement,

since it seeks to reduce and eventually eradicate poverty.

Moreover, higher levels of unemployment will increase the crime rates in these Caribbean

countries because people will probably resort to crime to support themselves. As a result,

the significant achievements of these islands’ governments in pursuing democracy will be

severely threatened as they will struggle to cope with rising economic deprivation and

social unrest.




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There is also a very real danger that the banana farmers will resort to the production of

illegal drugs as a viable economic alternative. For example, a few dozen marijuana plants

on a small plot of land will be sold for up to thirty times more per kilo than a farmer’s

banana crop. Furthermore, it is claimed that St. Vincent can now count marijuana as its

principal export crop, and there is an increase in the production of the crop in Grenada and

Dominica.

The Cotonou Agreement will also severely affect the Caribbean’s heavy reliance on foreign

trade in paying public debt When the banana preferences are removed, these small island

economies will have great difficulty in repaying public debts because of the lack of foreign

exchange earnings from the banana trade. This inability to repay public debts will also

cause foreign investors to hesitate before investing in these debt-ridden economies.

Potential Cotonou Reforms

The Cotonou Agreement should be reformed in two ways.

First, it must give the ACP states more time to adjust to the changes from Lomé, especially

with respect to the removal of trade preferences.

Since the Caribbean countries will eventually have to compete with the bananas produced

by U.S. owned multinational corporations in Latin America, the Cotonou Agreement should

focus on ways in which the banana producers in the Caribbean could improve the

competitiveness of their banana market, instead of focusing on ways in which the

Caribbean could diversify its exports.

Though it can be argued that the ACP should have realized that the removal of the trade

preferences was inevitable, it seems impossible that the countries that have relied on these

preferences for the past three decades can simply diversify into other industries besides

bananas.

The other alternatives, which could provide comparable employment or income, are

nonexistent for various reasons.

1. Any alternative crop would confront the disadvantages of terrain, climate, and

size of plantations.

2. In order to be profitable, any alternative product would require access to major

markets, the majority of which are already “entrenched in competition.”

3. Other products will incur higher per unit shipping costs because they will not be

able to take advantage of the large shipping discounts that the banana industry enjoys with

its high export volumes.

Competition with Latin American banana corporations, such as Dole, Chiquita, and Del

Monte, also appears inevitable to the banana producers in the Caribbean; therefore, their

hope is to improve the quality and productivity of their banana production.




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Few banana producers, however, have the resources to do so. Currently, the administration

of EU funding initiatives to these producers is cumbersome and inflexible, which means

that funds are often not deployed and do not reach intended beneficiaries. Although the

Cotonou Agreement includes reform mechanisms that hope to dramatically improve the

efficiency of EU aid, appropriate knowledge and capacity may not be readily available in

these relatively new policy areas.

Conclusion

The Caribbean islands have complied with every aspect of this long-standing regime of

trade preferences set up by Lomé. They are staunch allies of the United States and

politically stable, with literacy rates in the ninetieth percentile, and little or no human rights

abuses.

Yet, the trade preferences were called into question and deemed as illegal because U.S.

companies in Latin America objected to them. By complying with WTO rules, the EU will

have to open its market to U.S. owned companies such as Chiquita, Dole, and Del Monte,

and it is hard to imagine that the Caribbean countries will be able to compete with these

multinational corporations that already dominate the world market.

Admittedly, in an age of global market liberalization, economic dependency on one

commodity is a serious problem for small island economies. Thus, it is understandable that

the EU is pushing the Caribbean Islands towards diversification of their markets. However,

the transition period between the Lomé system to the new system under Cotonou is too

short. While it is acknowledged that “it is better to teach a man how to fish that to give him

the fish . . . he must be given a fish while he is being taught to fish.”

In other words, the EU must continue to give the Caribbean countries trade preferences

while they are taking the time to develop successful alternatives to bananas. Twelve years

is not enough time for these countries to move from an economic system that fostered

dependence to a new system that argues for interdependence.

References:

European Development Fund (EDF)

http://europa.eu/legislation_summaries/development/overseas_countries_territories/r1210

2_en.htm

Cotonou Agreement

http://europa.eu/legislation_summaries/development/african_caribbean_pacific_states/r12

101_en.htm



http://europa.eu/legislation_summaries/development/african_caribbean_pacific_states/r12101_en.htm

http://europa.eu/legislation_summaries/development/african_caribbean_pacific_states/r12101_en.htm




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EU looks to cut farming subsidies4

The EU is renewing efforts to reform its Common

Agricultural Policy, the rural payments system

that costs more than 40bn euros (£32bn) a year.

It is due to announce proposals aimed at making

farming more efficient and environmentally friendly.

The European Commission will suggest going further

down a road it embarked on five years ago.

It aims to scrap milk quotas and give farmers incentives

to look after the countryside rather than producing food.

BBC Europe editor Mark Mardell says the idea is to make farmers more responsive to the

demands of the market - and more at its mercy.

The draft policy requires approval by all 27 EU member

states and the European Parliament.

It calls for milk quotas to be raised then scrapped by

2015.

The commission wants to progressively cut subsidies to

farms, and shift the money saved to protect and

promote traditional family farms.

The UK has urged the EU to go much further and get

rid of direct payments to farmers altogether.

But EU Agriculture Commissioner Mariann Fischer Boel

says this is completely impossible politically, and our

correspondent says she is probably right.

Safety net

Most EU agriculture ministers say food production has to be increased, but oppose the UK

demands, and the French government will fight hard to keep elements of the old system.

One French farmer told the BBC the subsidies should stay as a safety net.

"Our prices are very high now so we don't need anything, any safety net," said Langlois

Berthelou.

"But when the price will get back down ... we will not have any more efficient tool. "We

don't have to forget that in Europe we have very heavy burden with all the environmental

and labour legislation which farmers around the world, in some other parts, don't have."

Ministers are calling for an increase in food

production

ON THE AGENDA

End to subsidies for major landowners

End to "set-aside" - practice of paying farmers to

leave land fallow

Phasing out milk quotas

Money to be redirected to rural development and

green programme

Europe's farming future debated

Send us your comments

4 http://news.bbc.co.uk/2/hi/europe/7409739.stm

http://news.bbc.co.uk/2/hi/science/nature/7409273.stm

http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=4817&edition=2

http://news.bbc.co.uk/2/hi/europe/7409739.stm




18

In the diagram above, the combination of technologies that are faster – smaller – more

integrated – more intelligent fuels a bifurcation in production agriculture. Agricultural practices

that yield what people use in petroleum, fibre, and industrial applications take advantage of

economies of scale and promote globalization and commoditization. Meanwhile, those

agricultural practices that result in what people eat such as nutraceuticals, place-based

specialties, food with specific qualities (organic, faith-based, ethnic), and livestock, leverage

economies of place and tend toward localization and customization.

The dichotomy prompted by the bifurcation of production agriculture feeds a creative tension

along the continuum of energy—an energy that if usefully applied, has the potential to bring the

association of agriculture and civilization into a more favorable balance than at any time in

human history. As condition reports are received through different media about changing

conditions and circumstances in production agriculture they can be tied to the "strategic

framework" suggested by the diagram and organized into meaningful actions on the continuum

in response. And given the advances that are on the horizon this topic of agriculture,

civilization, and technology will provide ample fodder for future consideration!




19




20

(v) Von Thunen’s model of rural land use and its applicability at both the local and international

scales.

Johann Heinrich von Thunen (1783-1850), a farmer and amateur economist developed one of

the world's first geographical models. Von Thunen owned a large farm in Germany and wanted

to test how distance and transportation costs would affect the location of economic activity.

In this theoretical model, von Thunen wanted to determine the factors that influenced the

locational distribution of farms around a single urban center. Von Thunen's model was created

before industrialization and is based on the following limiting assumptions:

The city is located centrally within an "Isolated State" which is self sufficient and has no

external influences.

The Isolated State is surrounded by an unoccupied wilderness.

The land of the State is completely flat and has no rivers or mountains to interrupt the

terrain.

The soil quality and climate are consistent throughout the State.

Farmers in the Isolated State transport their own goods to market via oxcart, across land,

directly to the central city. Therefore, there are no roads.

Farmers act to maximize profits.

In an Isolated State with the foregoing statements being true, Von Thunen hypothesized that a

pattern of rings around the city would develop.

There are four rings of agricultural activity surrounding the city. Dairying and intensive farming

occur in the ring closest to the city. Since vegetables, fruit, milk and other dairy products must

get to market quickly, they would be produced close to the city (remember, we didn't have

refrigerated oxcarts!)

Timber and firewood would be produced for fuel and building materials in the second zone.

Before industrialization (and coal power), wood was a very important fuel for heating and

cooking. Wood is very heavy and difficult to transport so it is located as close to the city as

possible.

The third zone consists of extensive fields crops such as grains for bread. Since grains last

longer than dairy products and are much lighter than fuel, reducing transport costs, they can be

located further from the city.

Ranching is located in the final ring surrounding the central city. Animals can be raised far from

the city because they are self-transporting. Animals can walk to the central city for sale or for

butchering.

Beyond the fourth ring lies the unoccupied wilderness, which is too great a distance from the

central city for any type of agricultural product.




21

Even though the Von Thunen model was created in a time before factories, highways, and even

railroads, it is still an important model in geography. The Von Thunen model is an excellent

illustration of the balance between land cost and transportation costs.

‘As one gets closer to a city, the price of land increases.’

The farmers of the Isolated State balance the cost of transportation, land, and profit and produce

the most cost-effective product for market. Of course, in the real world, things don't happen as

they would in a model.




22

The assumptions of Von Thunen theories are:

Real World Examples where V.T Model is Applicable or Relevant

Van Valkenburg / Held – Marco – Developed World – Continental land use – Van

Valkenburg / Held Model (1952) used an index based on 8 crops – the north / south

transect line cuts across the concentric lines of equal intensity, (showing a ring-like

concentricity of agricultural production in Europe) – picking out core periphery.

Hocking and Thompson – in the 1970’s they discovered localized V.T production

patterns around the Nigerian village of Poka, where transport systems are reminiscent of

pre-industrial Europe.

Land use on the S.A Pampas – similar to V.T modified model (which incorporated a

river shows a zonation concentric in nature. Where closer to Fray Bentos of Buenos

Aires there is intensive fruit dairying followed by wheat cultivation and on the outer

margin of cultivation there is cattle ranching (extensive) where it is dry and rainfall is

< 1200mm and < 500mm in some cases : example at Bahia Blanca.

V.T model tried to fundamentally show TWO things:

1. The intensity of the production.

2. The type of land used varied.

VON THUNEN ASSUMPTIONS CRITIQUE \ REALITY

The existence of an isolated state

cut off from the rest of the world

There is improved transport, trans-

national trade and globalization.

There exist: one large urban market

or (Central Place). All farmers

received the SAME Price for a

particular product.

A competitiveness on a domestic

and international level cause price

variations and more outlets.

There is a broad, flat, featureless

plain, which was uniform in soil

fertility climate and transport

access. (land was isotropic)

Topographic, edaphic and climatic

variations exist in nature.

There was only 1 form of transport

available.

Variations in transport are

available.

The cost of transport was directly

proportional to distance.

Competition and variation in

topography (in that good may in

some case may be freighted) could

increase cost.

Farmers acted as economic men

wishing to maximize their profits

having = knowledge.

Some farmers may be more

knowledgeable, wealthy and have

differing motives.




23

Both concepts were based upon locational rent (LR) which V.T referred to as

ECONOMIC RENT.

Thus LR is the PROFIT from a UNIT of LAND and should not be confused with what is

referred to as actual rent is paid by tenants. Locational Rent can be expressed by the formula:

LR = Y (m – c – td)

Where… LR – Locational Rent

Y – Yield per unit of land (hectares)

m – Market price per unit of commodity

c – produCtion cost per unit of land (ha)

t – Transport per unit of commodity

d – Distance from the market

P = V – (E+T)

Where….

P = net return profit / rent

V = revenue from product

E = production cost

T = transport cost




24

A Model of Agricultural Location – The Nature of Demand and Distance from Markets

Distance from

market

Locational (economic) rent i.e. profits is

absorbed at X – after that cultivation

becomes unprofitable.

Locational Rent

i.e.

Profits




25

Causes of Variation in LR scenarios

1. Change in market price.

(vi) Graphs to show net profit curves and to calculate locational rents based on Von

Thunen’s model.

This is a numerical exercise based on the example of the land-use handout and summarized in

this table:

R = Rent (per unit of land) p = Price our farmer receives per unit of her products at the market

c = (average) production costs per unit of product

f = freight rate (per mile, per unit of product)

Y = Yield (per unit of land)

Yp = Total revenues at the market (per unit of land)

Yfm = Total transport costs (per unit of land)

Yc = Total production costs (per unit of land)

m = Distance in miles from central market

Type

of

Land

Use

Rent Function Rent at

Market

R=Y(p-c)

Transport

Costs per

mile (=Yf)

Distance

from

Market to

No-Rent

Margin

m=(p-c)/f

Range of

Highest - Rent

Land Use in

miles from

Market

1 R=10-2.5m 10.0 2.50 4 0.0 - 1.7

2 R=7-.7m 7.00 0.70 10 1.7 - 5.0

3 R=4.5-.18m 4.50 0.18 25 5.0 - 19.0

4 R=2-.05m 2.00 0.05 40 19.0 - 40.0




26

Explanation of Exercise:

(1) The data given to you in the table refer to aggregate values for

1. Y(p-c)

2. Yf

3. (p-c)/f

Expand the example by giving specific values to Y, p, c, and f for all four land uses, initially

without changing the aggregate values. Interpret your new specific values for the different

crops. What kind of distance related regularities do you detect? Are these regularities inevitable

or could you (at least in part) eliminate them by changing your values (without, however,

changing the aggregate values provided in the table)?

Optional: ("We decided" in class to change the "optional" to "non-optional")

(2) Introduce some moderate changes in the variables (change of one variable at a time,

including changes in p and f sufficiently large to change the aggregate values of the original

example, and, as a result, of the size of the zones. Interpret the sensitivity of land use patterns

(size of zones) to such changes. (You might find it useful to remember the area of a circle...)

Further Explanation:

There are two parts to the question: for the first, you use the given aggregate values of the table

and disaggregate them into p, c, Y etc. so that you make the individual values consistent with all

the aggregate values. Ultimately, it is a matter of trial and error. I prefer it that way, so that you

actually try it out and get a feeling for the importance of different variables.

In the second question, you are asked to make some changes in the variables and observe the

effects of these changes.




27

The Cultural Landscape: An Introduction to Human Geography, Eighth Edition. This website

provides both drill-based review exercises and web-based critical thinking exercises that expand

upon the content of the text.

The following link would take you to a worksheet you should attempt – feel free to browse the

other relevant chapters on the ‘chapter select’ bar above.

http://wps.prenhall.com/esm_rubenstein_humangeo_8/0,9140,1363345-content,00.utf8.html

http://wps.prenhall.com/esm_rubenstein_humangeo_8/0,9140,1363345-content,00.utf8.html




28

(vii) The potential impact of climate change on farming systems in LDC’s

Climate 'could devastate crops'5

Climate change could cause severe crop losses in South Asia and

southern Africa over the next 20 years, a study in the journal

Science says.

The findings suggest southern Africa could lose more than 30% of its

main crop, maize, by 2030.

In South Asia losses of many regional staples, such as rice, millet and

maize could top 10%, the report says.

The effects in these two regions could be catastrophic without

effective measures to adapt to climate change.

The majority of the world's one billion poor depend on agriculture for their livelihoods. Yet, said lead author

David Lobell, it is also "the human enterprise most vulnerable to climate change".

The researcher, from Stanford University in California, US, added: "Understanding where these climate

threats will be greatest, for what crops and on what timescales, will be central to our efforts at fighting

hunger and poverty over the coming decades."

'Crushing' losses

The study used computer models to assess the impact of climate change on farming in 12 world regions

where the bulk of the world's malnourished people live. This included much of Asia, sub-Saharan Africa, the

Caribbean and Central and South America.

"To identify which crops in which regions are most under threat by 2030, we combined projections of

climate change with data on what poor people eat, as well as past relationships between crop harvests and

climate variability," Dr Lobell explained.

The scale and speed of the effects on agriculture surprised the scientists.

"For poor farmers on the margin of survival, these losses could really be crushing," said co-author Marshall

Burke, also of Stanford University.

All the models agree that there will be adverse effects on maize in southern Africa and rice in South-East

Asia, but the picture is less certain in other areas such as parts of West Africa where it is unclear how global

warming will impact the local climate.

Early investment

"For these regions, you get half of the climate models telling you it's going to get wetter and the other half

giving you the opposite," said Dr Burke.

"As a result, our study raises the potential for very bad impacts in these regions but with much less certainty

than in other regions."

The work can help priorities

investment, say the authors

5 http://news.bbc.co.uk/2/hi/sci/tech/7220807.stm

http://news.bbc.co.uk/2/hi/sci/tech/7220807.stm




29

A few developing regions, such as the temperate wheat-growing areas of China, could actually benefit in the

short run from climate change, he added.

Since it typically takes 15 to 30 years for major agricultural investments to be fully realised, work must start

soon to help subsistence farmers increase their yields or switch crops, the study says. While relatively

inexpensive changes, such as switching crops or altering planting seasons, could trim the losses, "the biggest

benefits will likely result from more costly measures, including the development of new crop varieties and

expansion of irrigation," the authors wrote.

----------------------------------------------------------------------------------------------------------------------------- ------

FACTBOX - Impact of climate change on India6

A shopkeeper sits in his shop on a flooded street in Porbander, 400 km (248 miles) west of the western Indian city of Ahmedabad, July 27, 2009.

(Reuters) - India is among countries most threatened by

climate change with experts warning that rising

temperatures will lead to more floods, heatwaves, storms,

rising sea levels and unpredictable farm yields.

Here are the main potential effects of climate change on a country which is the world's

seventh largest in area and is home to 1.1 billion people, a sixth of humanity.

MONSOON

Various studies show that surface air temperatures in India are going up at the rate of 0.4

degrees Celsius every 100 years, particularly during the post-monsoon and winter seasons.

While mean winter temperatures could increase by as much as 3.2 degrees Celsius in the

2050s, summer temperatures could go up by 2.2 degrees Celsius in the 2050s, spurring

climate variability.

Extreme temperatures and heat spells could alter patterns of monsoon rains, vital for

India's agriculture and water needs. Scientists warn that India will experience a decline in

summer rainfall by 2050. The monsoon accounts for almost 70 percent of the country's

total annual rainfall. Winter rains are also predicted to fall by 10-20 percent. Higher

temperatures also mean faster melting of Himalayan glaciers and as the melting season

coincides with the monsoon season, any intensification of the monsoon is likely to

contribute to flood disasters in the Himalayan catchment.

6 http://in.reuters.com/article/topNews/idINIndia-41393820090729?sp=true

http://in.reuters.com/article/topNews/idINIndia-41393820090729?sp=true




30

AGRICULTURE

Agriculture will be adversely affected not only by an increase or decrease in the overall

amounts of rainfall, but also by shifts in the timing of the rainfall. Higher temperatures

reduce the total duration of a crop cycle, leading to a lower yield per unit area, especially

for India's wheat and paddy crops.

Soil erosion, increased numbers of pests and weeds brought by climate change will also

affect agriculture in India. For instance, the amount of moisture in the soil will be affected

by changes in factors such as rainfall, runoff and evaporation.

RISING SEAS

A 10-year study in and around the Bay of Bengal points to the sea rising 3.14 mm a year in

the mangrove swamps of the Sunderbans delta against a global average of 2 mm,

threatening the low-lying area which is home to about 4 million people.

A trend of sea level rise of 1 cm per decade has been recorded along the Indian coast. The

major delta area of the Ganga, Brahmaputra and Indus rivers, which have large

populations reliant on riverine resources, will be affected by changes in water regimes, salt

water intrusions and land loss.

HEALTH

Rise in temperature and change in humidity will adversely affect human health in India.

Heat stress could result in heat cramps, heat exhaustion, heat stroke and weaken immune

systems. Increased temperatures can increase the range of vector-borne diseases such as

malaria, particularly in regions where minimum temperatures currently limited the spread

of such diseases.

(Sources: Greenpeace, UNDP, Centre for Science and Environment)

http://www.climateandfarming.org/additional_resources.php

http://www.climateandfarming.org/additional_resources.php




31

THEORIES OF INDUSTRIAL LOCATION

Models form an integral and accepted part of present-day geographical thinking. Models, as in

many branches of geography, have been formulated in an attempt to try to explain, in a

generalized simplified way some of the complexities affecting Industrial Location (IL). The two

major models are:

1. The industrialist who seeks the lowest-cost location: Weber

2. The industrialist who seeks the area which gives the highest profit: Smith

WEBER’S LEAST COST LOCATION

Alfred Weber, a German economist, devised in 1909 the theory of IL. It was based on the

concept of LEAST –COST LOCATION that would enable profit maximization.

Weber was concerned about the relationship between the locations of

(i) Raw materials

(ii) Market and

(iii)The significance of transportation between these.

He looked at individual factories and in so doing he made a series of assumptions from which

later generalizations could be made. Weber’s assumptions include the following:

- An ISOTROPIC PLANE with ease of access in ALL directions.

- An uneven distribution of natural resources with concentrations at particular

locations.

NB: Ubiquitous materials were evenly distributed materials.

- Labor is at fixed locations with fixed wage rates and is immobile and unlimited.

- Culture, climate and political systems are uniformed.

- Markets are fixed in size and location on the plane.

- The entrepreneur will always minimize the costs of production.

- Perfect competition exists (markets and raw material were unlimited)

- There is no variation in the cost of land, structures, equipment or capital.

- There is a uniform transport system over the isotropic plane.

unit 2 - von thunen + weber

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