Economics: Agriculture in Sa

The weather has an impact on the procurement of grains and makes it very volatile.  In 1990 a poor harvest contributed to low inventories and sales volume.   Willis

1 Farmers may not totally understand the product value. They may not easily accept new product that they have never heard about.

farms to keep their prices low, can eventually cause the market to fail. (58) The article The

This article written in the Texas Agriculture, a magazine published by the Texas Farm Bureau, is about all the factors impacting farmers that effect their income. Over the past couple years, a combination of things has caused the average Texas farmers income to drop. The primary audience for this article is the farmers in Texas as they are experiencing these issues first hand. The secondary audience would be consumers who have noticed price fluctuations in products at the store and are wondering the reason.

There is a market trend of supply and demand in an economy and this is measured through the equilibrium process and the actors that affect supply and demand. The farmers are the market suppliers and hence they determine their produce by measuring the equilibrium market prices and quantities. The suppliers are aware that when the prices of commodity increases the demand of the same commodity decrease and when demand increases supply decreases until the market reaches an equilibrium point. There are various factors that affect

The rising costs of land and the simultaneous costs of water make it so 30% of farm households have negative income. The cost of sustainability, such a new tilling methods and access to water, also strains farms. This often leads to farmers self-exploiting themselves to try to generate the most crops possible and cultivate their land to the fullest extent.

Aside from the acquisition of initial land for cultivation, new farmers faced another challenge equally aggressive; farm expansion. It was to be expected that a farmer who wished to make profit out of his exploits should consider expanding their total land under cultivation.

In the first week of classes we learned seven economic principles that would later be reinforced with examples in the class along with providing our own examples and analysis of the concepts in our own written work and debates about real world issues and events. We first talked about how incentives matter. In agriculture, and many other business sectors, incentives are very important and come in many forms such as subsidies or tax breaks from the government. It was also very important to learn about the shortages and surpluses that could amount from such incentives. For example, if the government were to give farmers prices above equilibrium, farmers would then be able to over produce above the demand levels. This is not to say that the government can’t sometimes improve the market outcomes. If a market failure is present and the government interferes, it would result in a positive market outcome. Next we discussed the importance of trade-offs and the opportunity costs behind those trade-offs. We make our trade-offs among three pillars of values: social/cultural, environmental, and economics and only when all three are balanced are we completely sustainable. In agriculture, trade-offs and opportunity costs are faced daily, and decisions should be made according to what is most sustainable now, and in the future. If a farmer decides to drain a wetland for more crop space to produce more (economic), the opportunity cost is the ecosystem being destroyed (environmental). Another example is if a farmer decides to farm organically, the opportunity cost is the increased yields of non-organic farming practices. Next I learned that rational people think at the margin. An example of this within agriculture is that a farmer does not think that he will hire five people to run two tractors, he thinks at the margin, hires two people to do the job, and therefore profits from that decision. I learned that markets are a good way

But when wheat prices decreased, farmers needed to increase more produces to make ends meet

Figure 4 in Appendix A demonstrates the supply and demand of white potatoes. In the short run price, demand and supply with all increase because of the commodity being added to the program. While in the long run both supply and demand will increase. Price will decrease because consumers will keep demand high enough to have equilibrium at a lower price than in the short run. By adding the proposed changes white potato farmers will be better off.

Astyk and Newton, in their essay: The Rich Get Richer, the Poor Go Hungry, explains that “around the world, industrial agriculture has consolidated land ownership into the hands of smaller and smaller populations” destroying local self-sufficiency (518). Individuals are no longer able to grow own fresh, healthy foods to feed their family. They now depend on industrially grown crops and processed foods loaded with chemicals for food. Additionally, because of the farm policy, farmers that continue to cultivate healthy produce like fruits and vegetables get little or no government support, thus the higher prices of fresh produce seen today at our grocery stores.

Small family farmers were driven off of their property by large farm industries. Family farmers were pushed off of their land since they generally did not own enough property to qualify for financial aid. With a limited amount of land and money, family farms were taken over by large farm industries (“Farm Relief”, 2002; Green, 1946). More specifically, the “owners of giant commercial farms” were “heavily capitalized”, making competition with small farms easy (Green, 1946, p. 41). Similarly, Bean (1938) reported that the average income of farmers in 1929 were those on self-sufficing farms because they lost profit while the “general decline in farm prices” affected the economy and those directly involved (p. 27). **

Many critical or interesting issues, problems, concepts that arose from the article about the agriculture downturn of prices in the United States of America. Subsequently the farmers are receiving subsidy from the government. This implies that the economy of agricultures has

If the business is a monopolist, then it has price-setting power. At the other extreme, if a firm

A recent report from HSBC isn’t quite so alarming…unless you read between the lines. “World agricultural markets,” it says, “have become so finely balanced between supply and demand that local disruptions can have a major impact on the global prices of the affected commodities and then reverberate throughout the entire food chain.”