Von Thunen propounded the theory of agricultural location in 1826 in his book 'isolated stat'. He was an Aristocrat who owned a large estate. The book was based on his observation in trying to manage Von Thunen's estate. His concept was more of an Economic concept.
The objective was to conclude and arrive at what is the best possible way in using agricultural land to maximize profit and Returns. How best, a land can be cultivated, and which land should be under what types of crops and what type of agriculture practice so as to maximize profits.
His theory is the first locational theory that inspired other theories like that of Weber and Christaller and eventually, the concept was used in the quantitative revolution.
It is one of the three locational triads - Von Thunen, Weber, Christaller.
It is a normative theory based on simplifying assumptions. It is also the least cost theory
Von Thunen's Assumptions
- Man is economic and rational
- Isotropic surface
- Perfect competition
- Man is a maximizer
- The price cant be manipulated
- Returns can be maximized only by maximizing cost
There are two concepts of Von Thunen
- Concept of isolated state - farmland
- Concept of locational rent - economic rent
Concept of isolated state
- It is a Farm estate which is isotropic in properties
- Flat surface
- no Terrain difference
- no climatic difference
- no fertility difference
- The input management at every location is the same
- It is surrounded by wilderness forest Barren land which is is non transendable a barrier which can't be crossed.
- Economic man
- It also single market at the centre and all transactions happen at the Marketplace
- Von thunen was giving is 3 in mediaeval times when are drawn cards where the popular modes of transportation so assumes all transportation is drawn by single horse cart
Concept of locational rent
rent is a cost the person is willing to pay for using some resources. The cost is also referred to as economic rent. Economic rent can depend on many factors like subjective evaluation emotional preferences which however are assumed to be constant because we have reduced the land to isotropic surface perfect competition conditions and the economic & rational man operating on the system. Land fertility in the isotropic office is also not a fact. The only factor that controls the value of land is the location of the land because based on location transportation cost can vary and hence land rent for Von Thunen is referred to as locational rent.
Ricardo - Rent
There is another locational theory in agriculture given by Ricardo who considered the variations in land fertility. So in Ricardo's case, the rent is referred to as economic rent and not locational rent but in Von Thunen's case, the economic rent is equal to the locational rent.
The locational rent in perfect competition is what a farmer is willing to pay which in turn depends on the profits that he makes. In a perfect competition where there are no losses or no excessive profits the rent is the differential of the price and the cost
Hence locational rent LR = price - cost.
- If Y is the yield namely weight per unit area
- P is the price per unit weight
- C is the production and labour cost per unit weight
- t is the transportation cost per unit distance per unit weight
- D is the distance of travel
the only variable in the above equation is d
The above equation is a straight line equation with negative slope which implies that the locational rent reduces with distance from the central market we call this as distance decay function of locational rent.
Because we have assumed anisotropic surface, the locational rent pattern will be a series of concentric circles around the central market and agricultural land use pattern therefore will also be concentric circle
Hence essentially the land near the market is costlier and has higher locational rent where as the land father is relative Lichi per based on this pattern of locational rent Von Thunen concludes that the land near the market will be used for higher-value Agricultural Products and higher land-use intensity to be able to pay for higher rents where has the land farther away can be used for low value crops and extensive land use the agriculture pattern that Von Thunen arrived is are below
zone zone 1 market gardening
zone 2 forest but not wilderness the forest is relevant in the mediaeval Europe for source of domestication and
Zone 3 crop farming without fallowing
Zone 4 crop farming with fallowing
Zone 5 three field rotation system crops grazing fallow
Evaluation and applicability
- It is a normative theory and ideal assumptions
- Hence theory will not be applicable to Real-world one to one correspondence
- But there are two examples where it is seen to be partially relevant where the pattern depicts Von Thunen's conclusion ie US and Europe
Agriculture pattern in USA is such that the land use pattern and the choice of crops becomes low intensity land use South wards and West wards away from Northeast New England states of US grazing economy is in California and Texas and Western us where as Southern us along the gulf coast is cotton and corn fields
The Pattern was also observed for Europe by Smith and Johnson. they are observed that Western Europe and parts of Netherland Belgium have more intensive agriculture and farming to support the dense Urban population where has east in Southern words the intensity Falls there were also concluded that this intensity pattern of Europe may not be so much because of distance from highly urbanized Western Europe alone the pattern is more reflective of the physiographic and Terrain difference Where are Southern Europe is mountainous and Highlands and stepper is are not most fertile soil these factor result in more extensive farming
According to Sinclair region in the immediate vicinity of urban Centre will not be used for intensive agriculture because of high speculative land prices farmers and land owners prefer to idle the land in anticipation of good returns from same auch land gets converted for extensive urban land uses and becomes an area of urban blight.