2- Location of Agricultural Products: Von Thünen

Location of Agricultural Products

The subject of location of agricultural products is based on Johann Heinrich Von Thünen's model.

Summary of the Model

The initial model of Von Thünen's “Isolated State”  takes for granted that:

• A single city is located at the center of an "isolated state" and is the only market (point) for agricultural products. Isolated state means there is no international trade.
• The state consists of a plain that is uniform in physical terms (soil, climate, topography, fertility, etc.).
• Transport conditions are the same in all directions. There are no roads.
• Prices are fixed to the city and do not change.
• Producers are motivated by maximizing their profit.

Land rent (profit) for a product i at a distance d from the market is:

R_i = (p_i - c_i) - T_i * d

R_i: land rent (profit)

p_i: product i market price per area unit

c_i: production cost of i per area unit

T_i: transportation cost of i, per unit of distance for the product of an area unit.

d: distance to the city (market).

Thus, the further we get from the market, the lower the land rent. But the cost of transportation is not the same for all products, the profit curves of 2 products can intersect. The producer will choose the product for which R_i is the highest.

In the example of the animated presentation:

R_a = (20 000 – 10 000) – 200 d = 10 000 – 200 d

R_b = (15 000 – 7 000) – 120 d = 8 000 – 120 d

R_c = (10 000 – 3 000) – 130 d = 7 000 – 130 d

R_d = (11 000 – 5 000) – 100 d = 6 000 – 100 d

R_e = (5 000 – 2 000) – 25 d = 3 000 – 25 d

Which gives the following graph:

And the map of productions:

Finally, the state of Von Thünen with the effect of: :

• 
  

  the waterway or road
• the small town

Application:

You can download this app from Philip Steadman of the Bartlett Grad School. The application makes it possible to visualize the landscape resulting from the variation of the factors intervening in the model of Von Thünen..

www.casa.ucl.ac.uk/vonthunen/von-thunen.zip

 

Documents to refer to:

For theories and models in space or regional economics:
CAPELLO, Roberta (2011) : "Location, Regional Growth and Local Development Theories"
FUJITA, Masahisa; KRUGMAN, Paul; VENABLES, Anthony J. (1999): "The Spatial Economy; Cities, Regions, and International Trade"

On agricultural location:
OECD (2009): "Farmland Conversion: The spatial dimension of agricultural and land-use policies"