Why Do Farmers Face Economic Difficulties?

C10K4

Objectives

• Challenges for Commercial Farmers• Challenges for Subsistence Farmers• Strategies to Increase Food Supply

Challenges for Commercial Farmers

• Victims of their own success• What’s important? access to

markets – distance influences what crops to plant

• Economic Model: Von Thunen model: crop/ animal choice with proximity to market

• 2Factors: cost of land versus cost of transportation

Von Thunen Model

Overproduction in Commercial Farming

• 1980 -2008: 10.8 to 9.3 million cows, but milk production + 128B to 190B. (demand stays the same)

• Farmer Welfare? 1) Farmers avoid producing crops in excess supply 2) gov pays farmers when certain prices are low 3) gov buys surplus and donates

Sustainable Agriculture

• - an agricultural practice that preserves and enhances environmental quality. (organic farming – less than 1% of farms)

• Lower profits but lower cost• Characteristics of

Sustainability: 1) sensitive land management 2) limited use of chemicals 3) better integration

1) Sensitive Land Management?

• Farming method: protects soil through ridge tillage

• Pros: lower costs & better conservation

• Cons: more labor intensive

2) Limited Use of Chemicals

• Commercial farms use genetically modified seeds to resist chemicals for killing bugs and weeds. (i.e. DEET, Roundup) *Organic farms minimize chemical use.

3) Integrated Crop and Livestock• “Grow crops that animals use… and

use animals for fertilizers” – Four things to consider…

• A) number of livestock: conducive to the environment and climate? (use of farm space to balance both)

• B) How should animals be confined?: moral and ethical treatment of animals

• C) Management of extreme weather conditions: droughts, fires, etc

• D) Flexible feeding & marketing: finding alternatives in reducing costs (producing or purchasing feed for farm animals.)

Challenges for Subsistence Farmers

• LDC vs MDC: Efficient and productive farming need to meet population growth.

• 20th century and modern medicine – demand for higher yields has greatly increased. How to meet needs?

• 1) new farming methods• 2) land left fallow for

shorter periods

Subsistence Farming and International Trade

• Double Edge Sword for LDC farmers and global demand?

• LDC focus on producing crops that are out of season or impossible to grow in MDCs. Use revenue to adopt better farming methods and technology.

• Dilemma: more land devoted for exports the less land for domestic.

Drug Crops

• Heavy Demand = Big Business

• Asia: opium from Afghanistan and Burma for Central Asia

• South America: cocoa from Colombia, Peru, and Bolivia for North America

• Marijuana: est. 140 million world-wide users.