Factors influencing farming: Economic factors

Farming requires transport to move the produce to the market. Image credit farmradio.fm

Transport

• Types of transport available, time taken, and the cost of moving raw materials is one of the economic factors.
• For perishable commodities for example milk, an efficient transport network is a necessity.
• For bulky goods for examples potatoes transport costs must be lower for outputs to be profitable.
• Items should be grown as close to the market as possible.

Markets

• Economic factors also operate on the basis of demand, market prices for farm produce and the consumption patterns of the market.
• If demand for certain products is high, then supply must increase and this means increasing production of the commodity in demand.
• This affects prices which must rise and the farmers make huge profits.
• Role of the market is closely linked with transport.
• All farmers want to locate as close to the market as possible to reduce costs of inputs and outputs.
• In order to accommodate as many farmers as possible, farm sizes must be small and this forces farmers to practice intensive farming.
• However, because the demand for land is so high close to the market, this land is generally expensive.
• Market demand depends on size and affluence of the market population.
• It also depends on religious and cultural beliefs.
• For example the anti-tobacco lobby is internationally so successful that tobacco production in Zimbabwe in under threat.
• Changes in behavioural patterns of consumers economically affect production on farms.
• As distance from the market increases, farm size increases and there is a change from intensive to semi-intensive, semi-extensive and finally extensive farming.

Technology and capital

• Technological developments such as new strains of seed, cross-breeding of animals, improved machinery and irrigation may extend the areas for optimal conditions and the limits of production (Green Revolution).
• Green revolution is a large increase in crop production in developing countries achieved by the use of artificial fertilizers, pesticides, and high-yield crop varieties.
• Lack of capital may mean that countries are unable to take advantage of these developments.
• Where capital is available, productivity is high but where it is scarce, it is low.

To access more topics go to the O Level Geography Notes page