Chap 6: World Agriculture

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Presentation transcript:

Chap 6: World Agriculture

OUTLINE 1. U.S. and Soviet Agricultural Policies in recent past 2.  A Model of How subsidies work/don't work 3.  Von Thunen Model The first sections will be for the students to read and review on their own. Study guide will be provided, the above two sections 5 and 6 will be discussed in class.

1. U.S. Agricultural Policy A. Historical Past, 17th thru 19th century      stable prices family farms limited market size environment had a direct impact on price drought http://www.agr.gc.ca/pfra/drought/maps/archives/n1e050930.pdf http://water.usgs.gov/waterwatch/ Versus bumper crop

B. Late 19th and 20th century: Review 1. Transportation transforms market access (Globalization Starts) a. all markets become international b. love/hate relationship with American railroads the original "Bill Gates" and other robber barons: the Vanderbilts, Harrimans, Stanfords (as in Stanford U.) and Jay Gould

c. Chronic American farm labor shortages transform Agriculture the cotton gin, McCormick Reaper, Combine.... Replace labor with capital and energy (industrialize agriculture) d. farm is a "factory" maintain minimum labor costs maximum profits

2. The "Good" War: WWI (The Benefits of Globalization for US Farmers) American farmers make-up for European shortfalls Get rich from destruction World markets favor World war

3. The Roaring 20s disaster on the American Farm, the great depression starts early supply too great, solution close "factories" (i.e. family farms -- note the "peaking behavior on the graph").  Number of farms hits a plateau during this period before the steep decline in the 1940s

4. The Great Depression of the 30s a. just when you thought things were bad over supply couples with collapsing demand international markets closed plus environmental disastors (Dust Bowl)

5. Recovery: New Deal years and the 1940s American style "Socialism" (so this is family [farm] values) -- Farm Subsidies Begin, more about this in the 50s Also see model example later b. Another "Good" War: WWII c. The Marshall Plan

How subsidies work

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