Agricultural land use

In 1826, Von Thunen published his work on agricultural land-use. He set out to explain how and why rural land-use varies. Despite being over 150 years old his work still has relevance today.

To simplify the real world he made several assumptions:

  1. Economic man: man will be motivated by maximising profit
  2. Isolated state: the state is cut off from the rest of the world
  3. One urban area: which provides a uniform price
  4. Isotropic plain: the land is broad and flat with no features. Soil and climate are the same across this plain.
  5. Transport: only one type and cost increases with distance

He based his work on the concept of locational rent.

Locational rent is the money a farmer gains for growing his crops on any particular piece of land. Today we would call it profit.

You can calculate locational rent thus:

Locational rent = Revenue from selling crop - (Costs of production + costs of transport)

From this we can work out the profits for each piece of land.

For example:

If we assume that Wheat is selling at £100 per tonne.

It costs £20 per tonne to grow it (labour and fertiliser).

It costs £2 per mile per tonne to transport.

Example

Farm A is 0 miles from the market

L.R. per tonne = 100-(20+0)

L.R.= £80.

Farm B is 15 miles from the market

L.R. per tonne = 100-(20+30)

L.R. = £20.

Farm C is 30 miles from the market

LR per tonne = 100-(20+60)

L.R. = £20

If we now plot these figures on a graph:

Locational rent for wheat

We can see that locational rent decreases with distance from the market place. This is because transport costs increase.

Different crops would have different market prices, costs of production and costs of transportation.

So, if we look at potatoes that have a higher market price but also higher costs of transportation:

Market price - £120 per tonne

Costs of production - £25 per tonne

Costs of transportation £3 per tonne per mile

Then we would get a different locational rent graph...

Farm: Locational rent:
A - 0 miles from market 125- (25 + 0)= £100
B - 15 miles from market 125- (25 + 45)= £55
C - 30 miles from market 125- (25+ 90)= £10

This would produce the following graph:

Locational rent for potatoes

If we then put these two graphs together then we get this...

Locational rent for wheat and potatoes

From this we can identify how and why land-use will vary as we move out of the urban area. Farm A and B would grow potatoes as these command the highest locational rent (profit).

Farm C however would grow wheat because the cost of transporting the produce to the market place means potatoes would no longer make the most money.

If in this imaginary land you were to walk from the market place out into the countryside you would first see nothing but potatoes then nothing but wheat. Obviously the real world is far more complex. Von Thunen developed these basic principals to come up with a pattern of land-use.

Von Thunen over simplifies the real world and his model is often criticised for having little modern day relevance. The main weaknesses of his model relate to the basic assumptions. Each of these can be dismissed:

  1. Economic man: man is actually motivated by a wide range of factors. For example many would reach a certain income level and then enjoy increased leisure time. Some will work harder or more efficiently then others.
  2. Isolated state: the state is not cut off from the world.
  3. One urban area: maybe true in cases of urban primacy but this is the exception not the rule.
  4. Isotropic plain: the physical landscape is not feature less. Physical features in fact have a great influence on farming as we have already seen.
  5. Transport: today the transport revolution means food can be transported further than ever before. Refrigerated milk lorries for example mean milk no longer needs to be produced next to the market place. The EU food-mountains show that perishable produce can be stored for a long time!

In addition Von Thunen failed to take into account innovation, new technology or government action. The influence of which has already been discussed.

Von Thunen does however have some relevance to land-use distribution in certain areas.

In the hill farms of southern Italy for example crop intensification does decrease with distance from the market place. This is because the transport routes are poorly developed and the villages almost act as isolated states.

Alternatively in Uruguay farming intensity decreases as you move away from the primate city.

Von Thunen provides us with an explanation of land-use. His work is now over 150 years old so has inevitable faults but if this is appreciated he still provides us with a land-use pattern for comparisons and a starting point for explanations.

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