What are the Social and Economic Impacts on Agriculture

Social and economic impacts are scarcely less significant in determining the type and methods of farm production in any area and the spatial patterns of agricultural activity. It is these factors which are examined next.

1. Land tenure

Land tenure is one of the most fundamental influences on agriculture. Among primitive peoples, the land is owned by the community and the concept of individual ownership is unknown. It is in the more economically advanced farming regions of the world that various forms of land tenure are to be found. These include freehold ownership, various forms of tenancy and communal and state ownership. As well as determining the amount of income which must be set aside to meet mortgages or rent, the form of tenancy also influences the extent of the farmer’s participation in planning and policy, the degree to which he is dependent solely on his own resources in developing the farm, and the ease with which operations can be expanded or contracted by the purchase or letting of land.

Freehold ownership is the dominant form of landholding in most advanced farming nations, although the UK, with a majority of tenant farmers, is an exception to this. It is frequently suggested that freehold ownership offers the strongest incentives for efficient farm management and allows the greatest freedom and flexibility in decisions about farm policy, although the outcome of these decisions will ultimately depend on the experience and knowledge of the farmer. On the other hand, the owner-occupier is free to subdivide his holding between his heirs, and, if local custom favours gavelkind (equal inheritance between all heirs) rather than primogeniture (inheritance by the eldest child), this can lead to a reduction in unit sizes and fragmentation of holdings which is unlikely to occur under a system based on tenancies.

Two forms of tenant farming may be noted. The most common is cash tenancy, in which a fixed cash rent is paid to the landowner. The second form is share-cropping, or metayage, whereby the tenant cultivates the land and gives the owner an agreed share of the farm produce. Under the former system the farmer has a fixed outgoing in rent, but a fluctuating income from the land. He may also be restricted in his farming operations by conditions in his lease, which in extreme cases even stipulate particular cropping rotations. Security of tenure depends on the length of the lease, and this in turn influences farming methods. With a long lease, the farmer will be more willing to invest capital, perhaps in conjunction with the landlord, in farm improvements, but with a short lease, there is a danger that he will avoid making capital improvements and seek to maximise his profits by over-cropping or over-grazing, to the long-term detriment of the land.

In share-cropping, the farmer’s annual payments to the landowner are related to the return from the farm, and to some extent, he is protected from fluctuations in yield and income. However, in many instances, the share due to the landlord is fixed at an excessively high level so that he is left with a very meagre income for his labours. In parts of the USA where the practice still persists, ‘share-croppers’ generally form a very impoverished section of the agricultural community. In Europe share-cropping still survives in parts of France and Italy.

State ownership of both land and the capital equipment of agricultural production represents another form of tenancy which has been established in most countries of the Communist World. Ideological considerations apart, state control of agriculture may be seen as an attempt to rationalise and modernise agricultural production, achieve economies of scale and eliminate many of the problems common to peasant cultivators, such as small size and fragmentation of holdings. However, the collective farms (kolkhozy) and state farms (sovkhozy) of the Soviet Union have not been an unqualified success. It has been suggested that ‘the yield or fertility of the soil has not been very materially improved, although the productivity of agricultural labour has been considerably increased’. Thus, the USSR, with a very favourable ratio of land to population (one-sixth of the earth’s land area but only one-fifteenth of the world’s population), is unable to produce enough food to support its own population, and since the mid-1950s has been a major importer of grain from North America. State farms are also found in many countries of Eastern Europe — East Germany, Czechoslovakia, Hungary, Romania, Bulgaria and Albania — as well as in China, where the traditional pattern of small peasant holdings was reorganised after 1950, first into collective units, and later into large ‘communes’.

2. Scale of Operations

In most studies of farm size and its effects on productivity, land area is taken as the sole criterion of farm size. Yet land is only one of many farm resources, and in theory, other measures of a unit size such as the number and size of buildings, labour inputs or value of production might also be employed. However, information on the land area is most readily available, compared with data on farm output or labour inputs, and for this reason, it is widely used as an index of size.

The economic viability of a farm of a given size is difficult to assess and depends on the type, method and intensity of production as well as the economic aspirations of the farmer and the social context within which the farming is carried out. Under the system of intensive, subsistence rice-growing practised throughout much of South-East Asia one hectare of land is sufficient to support a family, whereas on the drier parts of the Great Plains of the USA a farm of 200 ha is considered small and would scarcely support a family. However, despite the problems of defining a minimum or optimum farm size, it does seem clear that in many parts of the world there is an excessive number of small, inefficient farm units.

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The main constraint imposed by small size lies in the lack of choice of alternative types of production open to the farmer. In order to achieve an adequate return, small enterprises must produce a high return per hectare by intensive production methods. In Britain, this generally means dairying or the growing of cash root crops, often supplemented by the rearing of pigs and poultry. It has been noted that in the UK many farmers stay in milk production because their holdings are not large enough to make cereal growing a profitable alternative and because capital is ‘trapped’ in dairy buildings and cannot be transferred to tractors, drills and combine harvesters.

In many parts of the world, because of the limited returns available from small farm units, farmers frequently engage in a secondary occupation to supplement the farm income. In Scandinavia, for example, many farmers also work in forestry and fishing, while in many parts of France, the Low Countries, Germany and Poland many worker-peasants, or ‘5-o’clock farmers’ as they have been termed, combine the running of a smallholding with a full-time job in a nearby urban centre. Indeed, part-time farmers of this type are common in the various agricultural systems of both the developed and developing world.

Another response to the problems of small unit size is that of cooperation between groups of farmers. Cooperative schemes vary widely in their scale of the organisation but frequently involve communal purchase and usage of major items of capital expenditure such as combine harvesters and grain silos, bulk purchase of seeds, fertilisers and animal foodstuffs, as well as the group organisation of the marketing of produce. In this way, economies of scale can be achieved and the bargaining power of farmers in relation to buyers greatly strengthened. In countries such as Denmark, the Netherlands and Finland, where cooperative schemes have been encouraged and financed by the state, the organisation embraces agricultural education, quality control and processing of products, as well as marketing and advertising. Extreme forms of cooperative organisation are found in Israel in the form of the moshavim, in which small family farms share centralised cooperative services, and the kibbutzim, which involve complete communal ownership of the land.

In many instances, the economic problems of small unit size are accentuated by fragmentation of holdings into numerous small, and often widely scattered, plots. Such a situation may result from the preservation of former open-field patterns, the operation of inheritance laws involving the equal division of property between heirs, or the piecemeal acquisition or reclamation of land. Fragmentation is a serious problem, and in extreme cases, mechanisation of farm operations is difficult, if not impossible, much time is wasted in movement between fields, and property disputes are common.

Programmes of farm consolidation have been carried out in many West European countries in recent decades. This involves the amalgamation of scattered plots into compact holdings around farmsteads. In France, an official policy of farm consolidation (remeasurement) was started in 1941, since when just over 8 million hectares of farmland have undergone reorganisation.

3. Marketing

Apart from purely subsistence economies, patterns of farming are greatly influenced by the demand for particular products. Other things being equal, preference will be given to commodities for which there is a strong demand with high profit. However, simple relationships between supply and demand are greatly complicated by government intervention in the form of subsidies, tariffs, quota restrictions and various international trading agreements.

As mentioned earlier, individual farmers are in a relatively weak position in relation to buyers. There are more farmers than merchants so that it is relatively easy for buyers to dictate prices. Moreover, after the harvesting of crops or the fattening of livestock, the farmer generally has no alternative but to sell. In most cases, he cannot retain his produce until market prices are high. The economic vulnerability of the individual farmer may be strengthened by the formation of growers’ associations or cooperative groups for the processing and marketing of produce, This type of arrangement has been successfully applied to cheese-making in Switzerland and the Netherlands, wine production in France and bacon-curing in Denmark.

Many agricultural commodities deteriorate rapidly or require expensive and specialised equipment for processing. Under these circumstances, government marketing boards or agencies are frequently set up. In the UK, for example, the Milk Marketing Board was set up to reduce the transport costs of milk collection from farms and it’s a distribution from dairies to market centres.

The British Egg Marketing Board, with almost 400 egg-packaging stations, attempts a similar function. In the case of British sugar-beet production, acreages and prices for the crop are determined by the government and it is grown under contracts made each year between the farmer and the British Sugar Corporation.

In recent years large companies involved in the freezing, canning, drying and packaging of products, and large firms owning supermarket chains have bought increasingly large quantities of fruit, vegetables and poultry direct from farmers. One important result of these developments is for processing to be carried out in enormous, factory-like units, the location of which in tum exercises a profound effect upon patterns of agricultural land use. This is true of most advanced farming nations, In such countries the small local livestock market, abattoir and dairy now play a relatively insignificant role in the pattern of agricultural marketing.

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4. Transport

Transport provides the essential link between agricultural producer and buyer, as well as the means of moving various material inputs such as seeds, fodder and fertilisers to the farmer. Historically, the impact of transport developments on agriculture has been enormous. In North America, railway construction converted ranching land on the interior plains into vast grain-producing areas. The advent of refrigerated shipping in the 1870s transformed the farming face of Australia, New Zealand and Argentina by permitting the movement of frozen beef and mutton to European markets. In many parts of Africa, the construction of new roads and railways has been the essential prelude to the opening up of new farming districts.

Most geographical studies of the influence of transport on agriculture have concentrated on transport costs, although, as described in Chapter Nine, there are many other factors which go to make up the economic distance, such as the speed of movement, frequency of services and the availability of special facilities for the preservation of perishable goods. However, it is the cost factor which is undoubtedly the dominant influence upon patterns of agricultural land use. Indeed, the cost of transporting produce to market forms a central theme in von Thünen’s classic theory of agricultural location.

In the case of international trade in agricultural produce, transport costs may include not only freight charges but also insurance, customs charges, transhipment costs, packaging and handling costs and storage charges. The costing of internal movements of produce is less complicated and is essentially a product of weight and distance. Thus, bulky and heavy crops such as potatoes and sugar-beet tend to be grown close to urban markets and processing factories respectively. On the other hand, less bulky, high-value commodities may be able to withstand high transport costs and can be profitably grown at a great distance from the market. For example, costly airfreight services are even used to transport early-season crops of fruit, vegetables and flowers from the Channel Islands, Scilly Islands and various Mediterranean areas to the London market. Transport improvements and reductions in transport costs may be instrumental in extending the area of production for given markets.

5. Labour

Different crops and different types of livestock vary greatly in their labour requirements as well as in the seasonality of their labour demands. Labour requirements for a selection of crops and livestock in England and Wales.

Availability and cost of labour will obviously play an important part in determining the farmer’s choice of crops and livestock. Low population densities and shortage of labour in a region will tend to restrict agriculture to forms and methods requiring little labour in relation to lands, such as extensive, highly-mechanised grain cultivation or stock ranching. Conversely, a high population density and abundance of labour will favour labour-intensive forms of production such as the cultivation of paddy-rice or market-gardening.

Almost all forms of agricultural production are typified by marked seasonal variations in labour demand. During periods of intensive activity such as harvesting this demand may be met by the regular workforce working overtime, by the use of part-time personnel, the recruitment of casual labour, or even by the subcontracting of certain jobs. At times of the year when there is relatively little activity on the farm, the regular labour force may be underemployed and reduced to short-time working. However, this constant adjustment of the labour force to the amount of work in hand presents many problems, and certain writers have even suggested that the extreme variability in the length of the working week and the resultant fluctuations in weekly earnings has been an important contributory factor to the drift of labour from the land in Britain.

In many advanced farming nations, there has been a marked reduction in the size of the agricultural labour force in recent decades. In the UK the combined total of full-time and part-time agricultural employees fell from 843,000 in 1950 to just under 340,000 in 1986. Low wages, dissatisfaction with working conditions, better job opportunities and prospects in the industry, and the increasing mechanisation of many aspects of agricultural production have all contributed to this reduction in the size of the workforce.

The substitution of machinery for manual labour occurs when a farmer considers that capital investment in machinery, including purchase costs, running costs and depreciation, will increase profits through a reduction in labour costs. It has been estimated that in 1830 the production of wheat on one hectare, using the ordinary plough, harrow, sickles and flails, took 144 man-hours. In the United States in 1896, with the aid of machines in use at that time, this had been reduced to 22 man-hours; in 1930, when using tractors and combine harvesters, the time was brought down to 8¼ man-hours. Thus, by the development of increasingly efficient and sophisticated machinery enormous savings in both time and cost were effected.

Another result of mechanisation has been to bring into cultivation areas that were previously considered unsuitable. The introduction of the Otto- Meyer plough, capable of ploughing to depths of 1.8 m, has been instrumental in bringing parts of the Dutch and West German heathlands under cultivation, while in Australia the development of the so-called ‘stump-jump’ plough has allowed areas not completely cleared of tree-stumps and roots to be brought into production.

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6. Capital

From the preceding remarks, it will be evident that the increasing mechanisation and modernisation of farming in many parts of the world have involved very profound changes in both methods and organisation. “In advanced commercial economies farming as a way of life is retreating before farming as a business. The development of agribusiness with its capital intensive and vertically integrated production systems is reducing the relative significance of land and labour and emphasising the importance of capital deployment and marketing skills.” (W. B. Morgan and R. J. C. Munton)

In developed economies capital may be raised by privately negotiated loans from finance or mortgage companies, from clearing banks or from cooperative banks dealing specifically with agricultural business. Old and middle-aged farmers generally have more difficulty than young farmers in obtaining capital for improvements, but on the other hand, are usually less willing to innovate and often require less capital than their more youthful counterparts. In some instances, government grants and loans may be available for improvements to land and buildings. In this case, the question of the farmer’s knowledge and information about the grants available and his attitude and response to such grants becomes an important factor. The spread or diffusion of information of this type has, therefore, attracted the attention of many geographers in recent years.

In developing, countries funds are less readily available to farmers. Peasant farmers, living close to the margin of subsistence, have an income from the land which fluctuates from year to year according to crop yield and market price, while on the other hand family expenditure and outgoings remain relatively fixed. Periodically income falls considerably below expenditure, and to cover this deficit the peasant farmer frequently resorts to the moneylender. Thus, debts at cripplingly high-interest rates are contracted in bad years in anticipation that they will be discharged in good years, but in fact, few peasants manage to free themselves from such repayments. Rural indebtedness of this type is prevalent among peasant farmers in south-east Asia, the Middle East and southern Europe. The effect of indebtedness is to reduce further the small profit margin on which the farmer and his family must live and reduce the capital available for farm improvements and modernisation. Agricultural progress is thus retarded if not completely prevented.

7. Government Impacts

In most countries, there has been a marked increase in the level of government control over agriculture during the present century. It is an obvious point that stable government tends to promote stable economic conditions, which in turn encourage capital investment in agriculture as in other forms of economic activity. However, this may be regarded as an incidental influence. More specifically, government policies and attitudes towards land taxes, food prices, wage levels, freight rates and food imports all have a profound and direct influence on agricultural production.

Government action operates at two distinct levels: first through policies affecting the internal organisation of agriculture, and secondly through controls on external trade. The internal organisation finds its most extreme and direct form in the collective agriculture of the Communist World, in which the government plans and controls virtually all aspects of agricultural production. In the Western World, policy decisions are more typically implemented by means of financial incentives such as grants, loans, subsidies and tax allowances. Low interest-rate loans may be available for the purchase of machinery and for land improvements. Land reclamation schemes may be financed by the government. Agricultural research and education may be advanced by the establishment of colleges and research centres. Guaranteed prices and other forms of subsidy may be used to influence the level of production of particular commodities. Subsidies may also act as a means of protecting high-cost home producers from the competition with low-cost foreign producers.

External trade is generally controlled by means of tariffs and quotas on food imports. In the EEC, the USA and other high-cost producing areas, the effect of such trade restrictions is to allow small, inefficient farms to shelter behind tariff barriers. “As long as the small farms persist, sheltered by tariffs and supported by subsidies, a variety of crops and livestock will be maintained, some of which would disappear if truly competitive conditions prevailed. In the low-cost producing countries, access to wider markets at remunerative prices would encourage greater intensification of agriculture, though it is less easy to visualise the landscape changes that would follow there.”(L. Symons)