Von Thunen theory of Agricultural Location – UPSC

(Notes)
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January 4, 2021

In this article, You will read Von Thunen theory of Agricultural Location – Human
Geography Notes for UPSC. From the exam perspective, this topic is very important for
geography optional in UPSC.

In Geography Optional for UPSC, You have to read the 3 Model of Locational Theories
i.e.

1. Von Thunen’s model of agricultural location

2. Alfred Weber’s Theory of Industrial Location
3. Central place theory

Von Thunen conceived the idea of a land-use model in both urban and rural
landscapes around a city on an isotropic landscape. His idea is basically how
economic rent decreases from the center of a city to its periphery.

His system of land use around a city with no trade alliance with any other country is ring-
shaped. Near the city, he envisages rings of the forest, crop rotation, horticulture,
and dairying. His theory stresses more on agricultural land use around a city rather
than the land use within the city.

Ricardo gave the concept of Economic Rent, and Von Thunen gave the concept of
Locational Rent.

Von Thunen theory of Agricultural Location

The agricultural location theory is a normative economic model that was first
presented by Johann Heinrich von Thünen, a Prussian landowner, in 1826 in a book
called Der Isolierate Stat (Isolated State).

This theory is based on the concept of Economic Rent which is prevalent in farm
market distance relationships. The agricultural location theory is one of the earliest
attempts to explain the pattern of land use in economic terms which was proposed
by Von Thunen.

Von Thunen’s location theory on agriculture is based on the study of an agriculture

field in Germany. In this model, Von Thunen explains the crop productivity and land
use pattern changes when we go away from the market.

The main aims of the Von Thunen Model of Agriculture were to explain why and
how agricultural land use pattern varies when we go away from the market. It also
explains the hierarchy of agricultural crops based on profit-making capacity.

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First, the following basic terminology needs to understand to a better
understanding of the model.

Crop productivity: It is measured by the ratio of agriculture output to the input of

per unit agriculture areas.
Crop intensity or intensive farming: At least two or more crops are grown a year
of particular agricultural land. In these methods, the large lever of inputs such as
money, fertilizer, and labor are used to get a high yield per unit of agricultural land.
Extensive farming: Less than two crops in a year are cropped in a larger
agriculture area with a lower yield. Low level of inputs applied as compare to
intensive farming.
Mixed cropping: Growing two or more crops simultaneously on the same piece of
land. For example, wheat + gram
Hinterland: It is an isolated region that is away from the coastline or river.
Isolated state: The land is completely flat having equal soil fertility & climate and
has no river or mountain.

Economic rent – Economic rent is defined as the net income accruing to an area of
land above the net income of land at the economic margin of production. The
economic rent of a crop increases if the location of agricultural land is near the market
due to less transportation cost. Von Thunen’s concept of economic rent is also known as
locational rent since the economic rent is estimated by the location of agricultural land.

Basic Assumptions in the Von Thunen Model

1. The isolated state comprises of one market area and an agricultural hinterland.
2. The market receives goods only from the hinterland and the hinterland sells
goods only to the market.
3. The hinterland ships its surpluses to no other market except the city.
4. There is a homogeneous physical environment, including a uniform Plain around
the City.
5. Farmers are settled in the hinterland who wish to maximize the profit.
6. There is only one mode of transport that is horse wagon is used.
7. Transportation cost is directly proportional to distance. The higher the distance
higher the transport cost.

He had two basic postulates –

1. The intensity of the production of particular crop declines with the distance
from the Market. Here the intensity of production means the amount of inputs per
unit area of the land.
2. The type of land use will vary with distance from the Market.

Using these two principles and basic assumptions, the model tried to give the optimal
land use pattern which will give farmers maximum profit or rent. Since a farmer is
an economic person and hence they will farm those crops which will give more
total profit or rent.

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He observed that particular activities were focused in certain zones around the
center, ideally this would then lead to a system of concentric rings with every ring
specializing in different agricultural activities based on transportation costs, weight,
and Perishability.

Von Thunen developed an agricultural location model with 2 prominent parts-

Agricultural land use and economic rent.

Economic Rent

Few geographers later termed it as locational rent as well. This is the basic principle
of Thunen’s analysis, where he argued that different types of land use produce different
net returns per unit area. The price a farmer obtains can be calculated easily- the price
at the market minus the cost of transporting it to the market.

Economic rent is the measure of the advantage of one piece of land over another.
Since all farmers receive the same price at the market and production costs are also
assumed to be the same, the only advantage one piece of land has over another is its
location from the market. So, if it’s closer to the market its locational rent is higher
and it reduces with the distance from the market i.e.

LR= Y (m-c) – Ytd,

Where LR= locational rent per unit of land,

Y= yield per unit of land, m= market price per unit of land,
c= production cost per unit of product,
t= transport rate per unit of distance,
d= distance from the market.

Von Thunen theory of agricultural location

1. Intensity Theory
2. Crop theory

Intensity Theory
Due to the rise in transportation cost, intensive cultivation is most suitable near the
city centre. Therefore, the intensity of production of a particular crop declines with
distance from the market.

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Crop theory
According to crop theory, there will be a variation in the land use with distance and the
factors responsible for the variation in the land use pattern are market price of a particular
crop, transportation cost, production cost and yield per unit of land. The crop theory of
Von Thunen can be understood by taking the following two cases.

Case- 1: When two crops P and Q have the same production cost and yield but having
different transport costs and market prices. If P is costlier to transport and has a higher
market price then crop P will be grown closer to the market than Q. Due to the higher
transportation cost of crop P, the location rent of P decreases more rapidly.

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Case- 2: When two crops X and Y have the same production and transportation cost (per
tonne/km) but different market price and yield per unit of land. If X has a higher yield and
lower market price than Y, it will be grown closer to the market than Y.

Concentric zonal rings of agricultural production

Von Thunen recognized following six concentric zonal rings of agricultural production.

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Zone-1: Market Gardening and milk production
Zone-1 would be dedicated to cash cropping. Due to deficiency of food preservation
facilities, primitive modes of transportation, and the highly perish nature of products,
market gardening, and milk production were most suitable in this zone.

Zone-2: Firewood and Lumbering production

The second zone was marked by the production of firewood. Due to heavy bulkiness
and primitive transportation modes, wood was comparatively costly to be shipped. It was
also used as a fuel and building material. However, the outer limit of this zone was
marked by wood which was highly in demand in the market.

Zone-3: Grain crops with no fallow land

Unlike zone-2, the zone-3 was marked by food grains. Rye was the most important
market product of this zone, having no fallow land. The cropping intensity of this zone
was highest as compared to zone-4 and zone-5. Most importantly, grains could be stored,
easy to transport and last longer than milk products. Also, the agricultural land would be
cheaper farther away from the market.

Zone-4: Grain crops with 14% of fallow land

This zone was marked by 14% of fallow land, having less crop intensity as compared
to zone-3. The farmers of this zone usually practised seven years crop rotation with
one year each rotation of rye, barley and oats, three-year rotation of pastures and one
year as fallow land.

Zone-5: Three field system

Like zone-2, this zone was marked by extensive cultivation having 33% of land as
fallow. The farmers of this zone practised three-field system, having 1/3rd of land as
crop field, 1/3rd as pastures and rest left for fallow land.

Zone-6: Livestock ranching (Grazing)

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The market products of this zone would be of two types namely, livestock and by-
products of milk like cheese, butter, etc. which would not highly perishable. Also, the
reduction in the volume of these by-products made them cost-effective in terms of
transportation.

Modifications in Von Thunen model of agricultural location

Von Thunen himself considered the potentially distorting effect of improved

transportation routes as navigable waterways, roads, and railways on which
transportation was speedier and costs only about one-tenth (along waterway) that of land
transportation.

As important cities generally have access to a navigable waterway, Thunen introduced a

stream into his “Isolated State” resulting in the elongation of the production zone roughly
along the stream.

Zone-1 was least changed in shape; zone -2 extended in a narrow band for some
distance in each direction from the city, but it was no longer an enclosed zone and
instead of approaching close to the town it seems more likely that woodlands would have
been situated at some distance up and down the stream.

Since the transportation cost of wood was very high vis-a-vis its value; the river-side
location was the most favoured location for this form of production.

The provision of only “one market” was also subsequently removed by Von
Thunen. The consideration of a minor market center with its own small tributary
area apparently with the production of Zone-1 type opens up the possibility of

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numerous towns of roughly equal importance with intermingled production zones that
modify each other. This leads towards the extreme complexity in the real world where the
zonation around the individual cities is rudimentary or indistinguishable.

The following are the modification introduced in the classical model of Von Thunen.

Introduction of a navigable river into his Isolated State.

Elongation of production zones along the river.
Extension of Zone-2 in a narrow band.
Consideration of more than one market center or minor market centers.
Possibility of numerous small towns of equal importance.
Intermixing of production zones due to numerous towns.

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Critical Analysis

The theory of agricultural location was presented by von Thunen in the early 19th century.
Since then, several scholars including geographers have applied it in various parts
of the world and have pointed out certain aspects that are not applicable in a way
as pointed out by von Thunen.

Many aspects of this model have changed due to development in the agricultural
systems, transportation system, and also due to other technological developments.
There are also certain regional geo-economic factors that not only direct but determine
the pattern of agricultural land use.

The main points raised by scholars regarding this theory are as follows:

The conditions described in this model, i.e., in an isolated state, are hardly
available in any region of the world. There are internal variations in climatic and
soil conditions. Von Thunen’s assumptions that there are no spatial variations in soil
types and climate are rare.
It is not necessary that all types of farming systems as described by von
Thunen in his theory exist in all the regions. In many European countries
location of types of farming in relation to the market are no longer in existence.
Thunen’s measures of economic rent and intensity are difficult to test
because of their complexity. The measurement of the number of man-days
worked in a year, the cost of labour per hectare, or the cost of total inputs per
hectare is not uniform in intensive and extensive types of farming. Similar is the
case with the measures of intensity,
Von Thunen himself has admitted that with the change in location of
transportation or market center the pattern of land use will also change.

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The location of the transport link and its direction used to change the pattern
of agricultural land use is depicted in Figure.

Similarly, if there are two market centres, the pattern of land use will be
according to Figure below

The situation will be entirely different when there are several market centres in
a region.

During the past 190 years, there have been sizeable changes in agricultural land
use and the economy with which it interacts. The most important of the changes
have been improvements in transportation technology; these improvements
now permit a space-time convergence of distant places, thereby expanding the
scale of possible economic organization. In von Thunen’s day, heavily loaded horse-
drawn carts moved to market at the rate of about 1 mile an hour.

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 The von Thunen model is also
static and deterministic. Today, we
know that economic growth and
changes in demand will alter the
spatial patterns of agricultural
systems and land use, which in
turn influence the rate of change. It
might be possible to postulate a
dynamic von Thunen model that could
be applied to the changing conditions.

But, the model, despite these possible

manipulations, is really static, since, it
represents a land-use system at one
point in time, Von Thunen was not concerned with transitional changes, since, he
and most of the direct extenders of his model assumed that any change in
technology, demand, or transport cost would automatically be accompanied by an
adjustment in the land-use system.

The Von Thunian model was developed in the early 19th century, since then, conditions
have entirely been changed. Therefore, it is not desirable to accept this model in its
original form as observed by many scholars. But this model is still considered to
be significant in many ways.

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