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Introduction to Von Thunen model
Johann Heinrich Von Thunen (24 june 1783- 22 Sep 1850) is an 19th century German economist .He first proposed the Von Thunen Model in 1826 in a book titled “The isolated state” .At that time crop being produced in one area is not being produced in another area and thunen believed that location of crop being produced in certain area came down to the cost of land and cost of transportation. The model focuses on commercial agriculture and many economic factors that affects the agricultural development. Later this model is used by William Alonso to develop Bid Rent Theory.
Assumptions of Von Thunen model
There are 6 assumption of Von Thunen Model.
- All land in the area has similar site characteristics (soil quality and Climate).
- All land in the area is uniform (generally flat).
- The city is centrally located in isolated state which is self-sufficient with no external influences.
- Unoccupied wilderness completely surrounds the state.
- There are no specific roads; transportation occurs from farmers directly to city or market. A river modifies the shape as transportation through waterways may vary.
- Farmers act to maximize their profit.
Von Thunen Model of Isolated State
- Central business district/Market: It serves as the central point of this model for the distribution of agricultural products. All agricultural products through different zones are supplied to this market.
- Dairying and Intensive farming: It is the first ring surrounding the city where dairying and intensive farming is done. Due to the perishability of vegetables fruit milk and other dairy products they must get to the market quickly hence they would produce close to the city because we didn’t have refrigeration at that time.
- Forestry: In this zone forestry is done for the production of timber and firewood for the purpose of fuel and building materials. Before industrialization wood was an important tool for heating and cooking also wood is fairly heavy and difficult to transfer so it is located as close to the city.
- Extensive field crop: The third zone consists of extensive field crops such as grain for the production of bread. Since grain lasts longer than dairy product and vegetables and they are much lighter than timber which reduces transportation cost and be located farther from city.
- Livestock Ranching: Livestock ranching or grazing it’s located in the fourth ring which is also the last spring surrounding this central city. Animals can be raised far from the city because they are self-transferring.
- Unoccupied wilderness: Beyond the 4th ring lies unoccupied wilderness which is too great of a distance from the CBD for any type of agricultural product that beyond the 4th ring no agriculture product is produced.
Von-Thunen Model of Agricultural Land use Pattern
This model is concerned with Agricultural land use pattern and postulates that: Transportation cost vary with bulkiness and perishability of the products. Basically, He said that if the value of Product is high it will be grown near to the city.
CBD (Central Business District): It serves as the central point of this model for the distribution of agricultural products. All agricultural products through different zones are supplied to this market.
Horticulture & Dairying: The production of dairy items, vegetables and flowers was concentrated in this zone which is the nearest zone to the city. In this zone the fertility of land was maintained by means of manuring and if necessary additional manual was brought from the city and transported to short distance to the farm.
Forestry: It was used for production of wood a bulky product in great demand in the city as a fuel in the early part of the 19th century. He showed on the basis of his empirical data for this shield a higher location rent since its bulkiness means relatively higher transportation cost.
Crop Rotation with no fallow: It represents growth farming where rye was an important market product, followed by other farming zones with different of intensity of cultivation. As the distance from the market increased, the intensity of rice production decreased with the consequent reduction in yield. There was no fallowing and manuring to maintain the soil fertility.
Crops and pasture alternate use: The farming was extensive. Farmer used seven-year crop rotation in which rye occupied only 1/7, one of oats, 3 of pastors and one fallow.
Three field system: Farmers followed three field system, this was rotation system in which 1/3 of land was used for field crops another 1/3 for pastures and the rest left for fallow.
Livestock ranching/grazing: It was one of the livestock ranching area because of the distance from the market, rye did not produce so high comparing the production of butter, milk, cheese. The rye produced in this zone was solely only for the purpose of farm`s own consumption. Only animals Produced here were marketed.
Von Thunen Model Equation
The model compares the relationships between production cost, the market price and the transport cost of an agricultural commodity and is expressed as follows:
R = Y(p-c) – Y(f*m)
Where, R = Rent per unit of land. Y = Yield per unit of land.
p = market price per unit of yield.
c = Average production costs per unit of yield.
f = Freight rate per unit of yield and unit of distance
m = Distance from market (in kilometers or miles).
Von Thunen’s Practical application in today’s context
Von thunen model was developed in early 19th century. Despite its ancientness it has many Practical application in today’s world, especially in the field of urban planning, agriculture, economics and transportation logistics. Some of the practical application applied in modern contexts are:
Urban planning: This model helps urban planners understand the land value with increase or decrease from central business district guiding decision for infrastructure projects and land use. Cities use zoning laws to differentiate areas for residential, commercial, industrial, and recreational; based on von thunen model.
Agricultural economics: This model helps in optimizing supply chains by minimizing transportation cost and ensures efficiency in distribution of agricultural products. Farmers use this model to decide which crops to plant vision transportation cost.
Agro-business decisions: This model helps to take decision about farm management, crop selection and you search the location based on market dynamics and consumer demand.
Environmental sustainability: This model supports sustainable land use planning which helps to boost efficiency on the optimum use of land resources and reduce environmental impact of transportation.