The main pressure on
rural lands emanates from urban
encroachment. Changing needs and trends encourage urban dwellers to move
outward to rural towns, carrying with them their urban lifestyles and
tendencies. Businesses follow when critical mass is reached to
sustain high levels of demand
for products and services. The rural towns, somewhere along the
process, lose their character and slowly become urbanised.
Since, urban-related land uses can offer returns way above what
can be realise if lands are used in farming, farmlands
are indeed susceptible to the pressure. Moreover, the changing
policies as regards land-use creates and/or reinforces what planners call the
"impermanence syndrome", which causes farmers
to resort to low-input farm practices and to ultimately give
up farming.
Non-sustainable land uses can likewise exert additional pressure to rural lands. Extractive industries for instance can realise massive profits compared to other more traditional uses. These pressures are actually external to the farm. A number of economic factors, which internally affect farm operations, may be the real culprits that exacerbate the susceptibility of these farms.
The economics of time, for instance, may assist in weakening the intent of farmers to continue with production. Investments in primary production are long-term investments (Cook, 1994). Realization of returns can take a long time compared to secondary sectors like manufacturing and processing. For instance, investments in backyard piggeries can take some years to break even and fully recoup the initial capital investments. Given this fact, and while at the same time, the farmers do not feel secure about the land-use policies which define the security of tenure of farming in a given area, the tendency to give up the farm is strengthened.
Changes in the national economy can also affect the viability of farms (Cook, 1994). As the economy expands, it is often accompanied by increases in real wage rates, which means that labor becomes more expensive to employ in farming. Moreover, real prices may also increase such that the price of farm products sometimes can not keep pace with the rise in costs of farm inputs thus there is a net decrease in real farm incomes.
A natural fall in the inherent productivity of bio-physical resources can also occur as a result of intense use and degradation (Cook, 1994). The usual tendency of farmers is to turn to better technology which more often would entail additional capital outlays. Health risks and negative environmental effects may also be faced if farmers decide to intensify their usage of farm chemicals to boost productivity.
Cyclical and random changes in the prices of goods and input costs are also factors which can adversely affect the financial standing of farms (Cook, 1994). Changes in prices of goods may be caused by many factors. Financial deregulation could increase volatility of interest rates and currency exchange rates, which in turn, increased the fluctuations in the prices of farm goods. The restructuring of former East Bloc countries from 1992 following the fall of communism in Europe changed demand patterns for several farm commodities in Asia and Australia. Trade and protectionist policies of major economies could also inhibit some farm products to enter those markets.
Lastly, natural calamities and changes in weather patters as what is happening now can spell disastrous effects to the farms' finances performance.
The interplay of these factors complicates the farming predicament. It may be noted that except for natural events, all others of the above-cited factors are economic in nature. They have a singular effect on the farming operations and that is the weakening of the farm's economic viability and financial standing. The financial difficulty faced by farmers make them very prone to the external pressures e.g. the monetary benefits that developers and speculators can offer in exchange for their lands.
There are only two options for farmers to choose from. Either they cling to their farms amidst economic difficulties or simply sell out. Farmers tend to cling to their farms for a number of reasons, among others, because the farm is synonymous to home, due to peer pressure, the availability of off-farm income which enable them to cross-subsidise farm losses, and the notion that to leave the farm is to fall into the poverty trap, that is, they have no better place to go and therefore they will have to continue farming by all means. When they decide to continue with farming, farmers may need to resort to cost-cutting, diversification and partial sale of other assets. Those who are eligible turn to government for assistance.
(from R. Azanza's academic paper)
Non-sustainable land uses can likewise exert additional pressure to rural lands. Extractive industries for instance can realise massive profits compared to other more traditional uses. These pressures are actually external to the farm. A number of economic factors, which internally affect farm operations, may be the real culprits that exacerbate the susceptibility of these farms.
The economics of time, for instance, may assist in weakening the intent of farmers to continue with production. Investments in primary production are long-term investments (Cook, 1994). Realization of returns can take a long time compared to secondary sectors like manufacturing and processing. For instance, investments in backyard piggeries can take some years to break even and fully recoup the initial capital investments. Given this fact, and while at the same time, the farmers do not feel secure about the land-use policies which define the security of tenure of farming in a given area, the tendency to give up the farm is strengthened.
Changes in the national economy can also affect the viability of farms (Cook, 1994). As the economy expands, it is often accompanied by increases in real wage rates, which means that labor becomes more expensive to employ in farming. Moreover, real prices may also increase such that the price of farm products sometimes can not keep pace with the rise in costs of farm inputs thus there is a net decrease in real farm incomes.
A natural fall in the inherent productivity of bio-physical resources can also occur as a result of intense use and degradation (Cook, 1994). The usual tendency of farmers is to turn to better technology which more often would entail additional capital outlays. Health risks and negative environmental effects may also be faced if farmers decide to intensify their usage of farm chemicals to boost productivity.
Cyclical and random changes in the prices of goods and input costs are also factors which can adversely affect the financial standing of farms (Cook, 1994). Changes in prices of goods may be caused by many factors. Financial deregulation could increase volatility of interest rates and currency exchange rates, which in turn, increased the fluctuations in the prices of farm goods. The restructuring of former East Bloc countries from 1992 following the fall of communism in Europe changed demand patterns for several farm commodities in Asia and Australia. Trade and protectionist policies of major economies could also inhibit some farm products to enter those markets.
Lastly, natural calamities and changes in weather patters as what is happening now can spell disastrous effects to the farms' finances performance.
The interplay of these factors complicates the farming predicament. It may be noted that except for natural events, all others of the above-cited factors are economic in nature. They have a singular effect on the farming operations and that is the weakening of the farm's economic viability and financial standing. The financial difficulty faced by farmers make them very prone to the external pressures e.g. the monetary benefits that developers and speculators can offer in exchange for their lands.
There are only two options for farmers to choose from. Either they cling to their farms amidst economic difficulties or simply sell out. Farmers tend to cling to their farms for a number of reasons, among others, because the farm is synonymous to home, due to peer pressure, the availability of off-farm income which enable them to cross-subsidise farm losses, and the notion that to leave the farm is to fall into the poverty trap, that is, they have no better place to go and therefore they will have to continue farming by all means. When they decide to continue with farming, farmers may need to resort to cost-cutting, diversification and partial sale of other assets. Those who are eligible turn to government for assistance.
(from R. Azanza's academic paper)
Interested to read the entire paper, Kuyang.
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