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Commercial agriculture is a large-scale production of crops for sale, intended for widespread distribution to wholesalers or retail outlets. In commercial farming crops such as wheat, maize, tea, coffee, sugarcane, cashew, rubber, banana, cotton are harvested and sold in the world markets. Commercial agriculture includes livestock production and livestock grazing. Due to the expensive nature of capital formation and implementation of technological processes, the landowners of such farms are often large agricultural corporations (especially in developing countries). Large-scale commercial farming, in terms of some of its processes, may be conceptually not very different from large industrial enterprises; United Fruit Company (now Chiquita Brands International) is an example. Commercial farming is most commonly found in advanced industrialized nations. The harvested crop may be processed on-site (or shipped to a processing facility belonging to the farm owners) and then sold to a wholesaler as a complete product, or it may be sold as-is for further processing elsewhere. Commercial agriculture differs significantly from subsistence agriculture, as the main objective of commercial agriculture is achieving higher profits through economies of scale, specialization, introduction of capital-intensive farming techniques, labour-saving technologies, and maximization of crop yields per hectare through synthetic and natural resources (fertilizers, hybrid seeds, irrigation, etc.). Whereas subsistence agriculture is an economic model in which most members of a population work in agriculture to feed themselves, with limited need for trade, commercial agriculture is a type of agriculture suited to industrial or postindustrial economic models, in which most members of a population do not work in agriculture, are fed by others (the few who do work in agriculture), and purchase their food and fiber as consumers, with currency.
Subsistence agriculture was the way of life for Americans up until about two centuries ago. The industrial age marked a turning point in the growing and distributing of produce and stock. During this era many changes happened that turned produce into a commercialized commodity. The first evolution was machinery; Cyrus McCormick introduced the mechanical reaper in 1831, a type of “mower” pulled by horse to cut grain crops. The introduction of machinery meant a farmer could yield a significant more amount of grain compared to hand drawn labor. Another tilting factor from the industrial age was the congregation of population within cities, as more and more people moved out from the rural areas to find work. These cities where introduced with factories that provided wages for those willing to work. This meant food had to be distributed at a public level, through local markets for those that worked and lived nearby. The factories themselves also introduced the means of assembly; the same techniques of these “assembly lines” could then be applied to growing and distributing crops. Railroads also played an important part in commercial agriculture. By 1910, 240 thousand miles of railroads were available to ship goods and produce was a major contributor. A scientific revolution also took place during this era. At the time of world war one German scientist’s developed a process for pulling nitrogen from the atmosphere. Although the primary reason for this was to provide necessary ingredients for munitions during the time of war, nitrogen also happens to be a key supplement for plants. What followed was synthetically manufactured nitrogen rich fertilizer. However, before this breakthrough sodium-nitrate was mined and process naturally, similar to other factories and facilities of the age. These reasons are why commercial agriculture can also be known as “industrial agriculture” or “factory farming.”
Following these events, farms have altered in numbers drastically. Since the early 1900 family owned and operated farms have dropped from 80% to 2%. These numbers directly affect the amount of land used for agriculture today. A century ago when Subsistence farming was a way of life, one would grow and maintain a farm large enough to accommodate their family. The average farm then used fewer than 150 acres. Today, farms average over 400 acres in order to grow produce and raise animals for an entire population. The switch from small scale agriculture to commercial agriculture didn’t come without hardship. In the early 1900 pest and bugs were less alarming and harmful compared to the large crops today. The concentration of resources has increased the area available for pest. Since this hurdle, pesticides have been integrated into everyday farming techniques. Plants and animals have also been genetically modified in order to maximize output for the growing population. Although, “organic” foods are available without GM’s or pesticides they come at in increased cost. In 2012, American meat companies produced: 26.0 billion pounds of beef. 23.3 billion pounds of pork. 6.0 billion pounds of turkey. 286.3 million pounds of veal, lamb and mutton. 37.6 billion pounds of chicken. In 2014, American farmers produced: 83.8 million acres of corn. 84.0 million acres of soybeans. 46.2 million acres of wheat. 330 thousand acres of apples. 129 thousand acres of broccoli. Vast amounts of labor are done by machines and specialized equipment in order to harvest these numbers. Sometimes the energy put into yielding these gigantic crops outweighs the output of the crop itself. This is the price paid for convince of local supermarkets. None the less commercial agriculture is a modern necessity. Agriculture is now consolidated and maintained by fewer individuals for a bigger population.
Commercial farming is a progression from diversified (sometimes called mixed) farming, where the farmer's intention is to produce goods for sale primarily for widespread consumption by others. The farmer may acquire a sufficiently large amount of arable land and/or sufficiently advanced technology. In advanced countries, there is also investment in expensive capital equipment like tractors, harvesters and so forth. At this point, it may become more profitable for the farmer to specialize and focus on one or a few particular crops due to economies of scale. This may be further augmented by higher levels of technology that might significantly reduce the risk of poor harvests. Thus, the key difference between commercial farming and less-developed forms of agriculture is the new emphasis on capital formation, scientific progress and technological development, as opposed to a reliance mainly on natural resource utilization that is common to subsistence and diversified agriculture.
Commercial agriculture contains six key factors:
Commercial farms must move their products to market. Farms need to be located near transportation systems. Trucks, ships, planes, and trains are several ways that products can be moved from where they are grown or made to where customers can buy them.
A farm's soil, as well as the climate of the region in which it is located, determine what crops will grow there or whether the land can support livestock. The temperature and rainfall can also determine the type of crop grown. For example, oranges must be grown in a hot climate. They will not grow if the temperature is too cold.
3. Raw Materials
A commercial farm depends on raw material. For example, a farmer will plant grain to get wheat. A farmer will have dairy cows to produce milk. Seeds and animals are two examples of raw materials used in commercial agriculture.
4. Market Forces
Supply and demand are important for selling agricultural products. If there is a high demand for a product and low supply, the price will be increased.
People who work on farms provide different types of labour. Labour is needed to plant crops, as well as to harvest them. This is important because some produce, such as grapes, need to be hand harvested.
Movement of agricultural products to market depends on transportation systems. For example, produce is shipped by rail in special refrigerated cars, then shipped across the ocean. Some crops. such as fruit, must get to the market quickly, or else they will rot; crops like these are often shipped shorter distances or are sold in the regions where they are grown.
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