BASIC ECONOMIC CHARACTERISTICS:

AGRICULTURAL SYSTEMS

Prepared by:

Professor Dr. Mamdouh Nasr

Previous Vice-Dean for Graduate Studies & Research

GDP (General Domestic Producer)

PPP (Purchasing Power Parity)

CPI (Consumer Price Index)

$405.4 billion (2007 est.)GDP (PPP)

7.1% (2007 est.)GDP growth

$5,000 (PPP) (2007 est.)GDP per capita

Agriculture (13.8%), Industry (38.1%),

Services (48%) (2007 est.)

GDP by sector

9.5% (2007 est.)Inflation (CPI)

22.1 million (2007 est.)Labour force

Agriculture (32%), Industry (17%), Services

(51%) (2001 est.)

Labour force by occupation

9.1% (2007 est.)Unemployment

Textiles, Food Processing, Tourism,

Chemicals, Pharmaceuticals, Hydrocarbons,

Construction, Cement, Metals, Light

Manufactures

Main industries

$24.45 billion (2007 est.)Exports

Crude Oil and Petroleum Products,

Cotton, Textiles, Metal Products,

Chemicals

Export goods

United States 10%, Italy 9.7%, Spain

7.8%, Saudi Arabia 5%, United

Kingdom 4.3% (2007)

Main export partners

$44.95 billion (2007 est.)Imports

Machinery and Equipment, Foodstuffs,

Chemicals, Wood Products, Fuels

Import goods

United States 11.7%, China 9.7%, Italy

6.5%, Germany 6.4%, Saudi Arabia

4.8% (2007)

Main import partners

AGRICULTURE

Most important question of the day: What’s for lunch?

SUBSISTENCE AGRICULTURE:

food production primary for farm family consumption

Example: slash and burn

http://upload.wikimedia.org/wikipedia/commons/6/6b/Bakweri_cocoyam_farmer_from_Cameroon.jpg

http://en.wikipedia.org/wiki/Subsistence_farming

ISSUES FOR SUBSISTENCE

AGRICULTURE: Population growth

Forest fallow bush fallow short fallow annual

multi-cropping

Intensification may not be sustainable. (Site dependent)

New farming methods require cash.

more inputs: fertilizer, manure, new tools, more labor

intensive

new seeds and new crops

Needs to have enough income to fertilize, buy

equipment, buy seed.

International trade pressure:

conversion of food crops to cash crops for more profit…

drug crops (can be involuntary)

INTENSIVE SUBSISTENCE AGRICULTURE:

Examples: wet rice cultivation, dry farming

maximize yield per acre, minimize

unused land, some double cropping

low machinery inputs, high animal and

human inputs

dry farming crop rotation

CHARACTERISTICS OF TRADITIONAL

AGRICULTURE

Intermixing of farm and family decisions

Why?

Implications?

CHARACTERISTICS OF TRADITIONAL

AGRICULTURE

Small farms with family & hired labor

CHARACTERISTICS OF TRADITIONAL

AGRICULTURE

Low productivity but high efficiency

“poor but efficient”. Why? Implications?

CHARACTERISTICS OF TRADITIONAL

AGRICULTURE

Rational but risk adverse (conservative)

Joint & extended families, intercropping

CHARACTERISTICS OF TRADITIONAL

AGRICULTURE

Livestock important in most cases

ROLES OF LIVESTOCK IN TRADITIONAL

AGRICULTURE

Buffers and extenders (meat, milk, eggs)

Fertilizer

Fuel

Hides and hair

Power

Transport

Social and cultural

Capital (savings bank)

COMMERCIAL AGRICULTURE:

food production primarily for sale off the farm

Can Start as subsistence farming, excess sold

Can transition to pure commercial agriculture

http://www.internationalspecialreports.com/theamericas/00/bahamas/17-2.gifhttp://www.georgetowncranberry.com/images/skipper.jpg

ISSUES FOR COMMERCIAL

FARMERS: Access to market: Von Thunen model (ring and transport)

Land rent and distance driven… too far no profit, lose $

Overproduction

encourage growth of crops with global demand

price subsidies

buy surplus yield, often donate to foreign governments

Unsustainable agriculture

move to more sustainable practices

sensitive land management

Ridge contour tillage

limited use of chemicals

(organic farming)

AGRIBUSINESS

integration of commercial agriculture into food processing,

usually by corporationsImage: http://www.agribusiness-

mgmt.wsu.edu/Templates/index_images/Landscape-Green_r2_c24_.jpg

Source: http://www.agribusiness-mgmt.wsu.edu/

HOW DO YOU FIGURE OUT WHAT TO GROW WHERE?

Von Thunen Model: Important

Influences:

Market Price

Distance

Transportation Cost

Perishability, (actually covered under transportation cost)

Likely on the quiz, test, and final exam.

WHERE DOES OUR FOOD COME FROM?

Croplands (mostly grain) – provide 77%

of the world’s food

Rangelands (meat) supply 16%

Oceanic fisheries (fish and shellfish) –

7%

MAJOR TYPES OF AGRICULTURE

Industrialized agriculture• Large amounts of fossil fuel, water, fertilizer, and

pesticides to produce monoculture crops or livestock

animals

Plantation• Form of industrialized agriculture – single ownership

Traditional subsistence agriculture

Produce only enough for the family

Traditional intensive agriculture

Increase outputs for profit

Traditional

Industrialized

Plantation

ECONOMICS OF AGRICULTURAL DEVELOPMENT:

TRANSITION PROCESS

320RK

22

Subsistence farming

Diversified or

mixed farming

Specialized, modern

commercial farming