what is capital intensive agriculture

What is the difference between labor intensive and capital intensive?

In Europe: Agricultural organization. The capital-intensive agriculture of such western countries as the Netherlands and the United Kingdom produced markedly higher yields per acre and per person than the extensive Soviet system, despite the benefits—notably mechanization—brought by collectivization. With the dissolution of the communist bloc, the system in eastern Europe….

What are the advantages and disadvantages of capital intensive?

 · The term “capital intensive” refers to business processes or industries that require large amounts of investment to produce a good or service and thus have a high percentage of fixed assets, such…

What are the types of intensive farming?

Commercial agriculture is capital intensive. This type of farming uses higher doses of modern inputs such as high yielding variety (HYV) seeds, chemical fertilisers, insecticides and …

What is capital intensive?

Intensive agriculture was developed in order to produce greater amounts of food for large populations. It is the most recent form of subsistence strategy emerging about 10,000 years …

What does capital intensive farming mean?

What Is Capital Intensive? The term “capital intensive” refers to business processes or industries that require large amounts of investment to produce a good or service and thus have a high percentage of fixed assets, such as property, plant, and equipment (PP&E).

What is intensive agriculture examples?

Intensive agriculture is apparent in every part of the industry, and aquaculture is no exception. One example is the standard practice of housing extremely high densities of fish in artificial tanks, allowing the farmers to control feed, oxygen levels, and a variety of other factors leading to an increase in yield.

Is agriculture a capital intensive industry?

The U.S. farming system is capital intensive. As the agricultural sector adjusts to lower commodity prices many areas of the agricultural economy will adjust and it’s hard to imagine that capital expenditures will escape significant adjustment.

What is capital in agriculture?

Capital is a fundamental component of agricultural production, and the accumulation of capital is key to growth in agriculture and the process of development. Unfortunately, cross-country data sets on agricultural fixed capital are rare.

What are the main features of intensive agriculture?

Intensive Method of Agriculture # Characteristic Features:(i) Smaller Farm Size: … (ii) High Intensity of Labour Participation: … (iii) High Productivity: … (iv) Low Per Capita Output: … (v) Emphasis on Cereal: … (vi) Dependence on Climate: … (vii) Dependence on Soil: … (viii) Low Marketability:More items…

What is intensive farming production?

Intensive production is defined as an agricultural practice where producers spend a lot of money, labour and time in comparison with the area being farmed. Output per hectare, in effect, is much higher than with farms where intensive production is practiced.

What is extensive agriculture?

extensive agriculture, in agricultural economics, system of crop cultivation using small amounts of labour and capital in relation to area of land being farmed. The crop yield in extensive agriculture depends primarily on the natural fertility of the soil, the terrain, the climate, and the availability of water.

What are the advantages of capital intensive production?

Capital intensiveAdvantagesDisadvantagesLess employee wages and costsMore difficult to customise ordersQuality can be standardised, the same every timeBreakdowns in production can be costlyMachines can work continuously, 24/7Initial set up costs of machinery are high

Which type of agriculture requires large capital?

intensive agricultureintensive agriculture, in agricultural economics, system of cultivation using large amounts of labour and capital relative to land area.

What are the types of capital in agriculture?

Typical capital goods : o Farm buildings and infrastructures where production takes place o Machinery and equipment used in the production process o Animals used in farm operations (tilling, harvesting, etc.) o Animals breed and used to obtain livestock products (milk, wool, meat, skin, etc.)

What are the 3 types of capital?

When budgeting, businesses of all kinds typically focus on three types of capital: working capital, equity capital, and debt capital.

What are the types of capital in farming?

Loan capital (and associated capital) are available over the long, medium and short term. Long-term loan capital is capital lent to the farmer for a period of ten years or more. Medium-term loan capital is lent to the farmer for periods of between two and ten years.

What is intensive farming?

Intensive agriculture, in agricultural economics, system of cultivation using large amounts of labour and capital relative to land area. Large amounts of labour and capital are necessary to the application of fertilizer, insecticides, fungicides, and herbicides to growing crops, …

Why is intensive agriculture important?

On the level of theory, the increased productivity of intensive agriculture enables the farmer to use a relatively smaller land area that is located close to market, where land values are high relative to labour and capital , and this is true in many parts of the world.

What is extensive agriculture?

extensive agriculture, in agricultural economics, system of crop cultivation using small amounts of labour and capital in relation to area of land being farmed. The crop yield in extensive agriculture depends primarily on the natural fertility of the soil, the terrain, the climate, and the…

Why do intensive farms require less land?

As a result, a farm using intensive agriculture will require less land than an extensive agriculture farm to produce a similar profit. In practice, however, the increased economies and efficiencies of intensive agriculture often encourage farm operators to work very large tracts in order to keep their capital investments in machinery productively …

Why is intensive farming better than extensive farming?

Optimal use of these materials and machines produces significantly greater crop yields per unit of land than extensive agriculture, which uses little capital or labour. As a result, a farm using intensive agriculture will require less land than an extensive agriculture farm to produce a similar profit. In practice, however, the increased economies and efficiencies of intensive agriculture often encourage farm operators to work very large tracts in order to keep their capital investments in machinery productively engaged— i.e., busy.

Do farmers use intensive farming?

However, in practice many relatively small-scale farmers employ some combination of intensive and extensive agriculture, and many of these operate relatively close to markets. Many large-scale farm operators, especially in such relatively vast and agriculturally advanced nations as Canada and the United States, practice intensive agriculture in areas where land values are relatively low, and at great distances from markets, and farm enormous tracts of land with high yields. However, in such societies overproduction (beyond market demands) often results in diminished profit as a result of depressed prices.

What is capital intensive?

Capital-intensive industries tend to have high levels of operating leverage, which is the ratio of fixed costs to variable costs. As a result, capital-intensive industrie s need a high volume of production to provide an adequate return on investment. This also means that small changes in sales can lead to big changes in profits and return on invested capital.

What are some examples of capital intensive industries?

Examples of capital-intensive industries include automobile manufacturing, oil production, and refining, steel production, telecommunications, and transportation sectors (e.g., railways and airlines). All these industries require massive amounts of capital expenditures .

How does capital intensity affect earnings?

The Impact of Capital Intensity on Earnings. Capital-intensive firms generally use a lot of financial leverage, as they can use plant and equipment as collateral. However, having both high operating leverage and financial leverage is very risky should sales fall unexpectedly.

How to measure capital intensity?

Capital intensity can be measured by comparing capital and labor expenses. Capital-intensive firms usually have high depreciation costs and operating leverage. The capital intensity ratio is total assets divided by sales.

Why are capital-intensive industries more vulnerable to economic slowdowns than labor-intensive industries?

Their high operating leverage makes capital-intensive industries much more vulnerable to economic slowdowns compared with labor-intensive businesses because they still have to pay fixed costs, such as overhead on the plants that house the equipment and depreciation on the equipment.

What does it mean when a company spends $100,000 on capital expenditures?

For example, if a company spends $100,000 on capital expenditures and $30,000 on labor, it is most likely capital-intensive. Likewise, if a company spends $300,000 on labor and only $10,000 on capital expenditures, it means the company is more service- or labor-oriented.

Why was intensive agriculture important?

Intensive agriculture was developed in order to produce greater amounts of food for large populations. It is the most recent form of subsistence strategy emerging about 10,000 years ago. With the emergence of intensive agriculture major changes occurred in other areas of culture. Deities in polytheistic cultures began to represent rain and important plants. Power began to become more centralized as the need arose to organize the growing, harvesting, and distribution of crops. With a changing power structure, social ranking became the norm. People became more dependent on one another as occupational specialization developed. Urbanization occurred as there was now a method to feed a large, non-food producing populace. In other words, a class-based society emerges.

How does intensive agriculture affect the landscape?

Both forms of intensive agriculture manipulate the landscape. This may entail actual modification of the landscape through clearing tracts of land, terracing hillsides or digging irrigation systems. Fertilizers are usually required because growing takes place on permanent fields. The type of fertilizers varies.

What type of fertilizer do non-industrial farmers use?

The type of fertilizers varies. Non-industrial agriculturalists may use natural fertilizers such as animal dung. Industrial agriculturalists use chemical fertilizers. Private ownership is the norm for intensive agriculture.

What is intensive agriculture?

e. Intensive agriculture, also known as intensive farming (as opposed to extensive farming) and industrial agriculture, is a type of agriculture, both of crop plants and of animals, with higher levels of input and output per unit of agricultural land area. It is characterized by a low fallow ratio, higher use of inputs such as capital …

What is intensive farming?

Intensive agriculture, also known as intensive farming (as opposed to extensive farming) and industrial agriculture, is a type of agriculture, both of crop plants and of animals, with higher levels of input and output per unit of agricultural land area. It is characterized by a low fallow ratio, …

What is vertical farming?

Vertical farming is intensive crop production on a large scale in urban centers, in multi-story, artificially-lit structures, for the production of low-calorie foods like herbs, microgreens, and lettuce.

What is aquaculture?

Main article: Aquaculture. Aquaculture is the cultivation of the natural products of water ( fish, shellfish, algae, seaweed, and other aquatic organisms). Intensive aquaculture takes place on land using tanks, ponds, or other controlled systems, or in the ocean, using cages.

When was rice intensification developed?

A recent development in the intensive production of rice is the System of Rice Intensification. Developed in 1983 by the French Jesuit Father Henri de Laulanié in Madagascar, by 2013 the number of smallholder farmers using the system had grown to between 4 and 5 million.

How does crop rotation improve soil structure?

Crop rotation can also improve soil structure and fertility by alternating deep-rooted and shallow-rooted plants. A related technique is to plant multi-species cover crops between commercial crops. This combines the advantages of intensive farming with continuous cover and polyculture .

What is crop rotation?

Crop rotation or crop sequencing is the practice of growing a series of dissimilar types of crops in the same space in sequential seasons for benefits such as avoiding pathogen and pest buildup that occurs when one species is continuously cropped. Crop rotation also seeks to balance the nutrient demands of various crops to avoid soil nutrient depletion. A traditional component of crop rotation is the replenishment of nitrogen through the use of legumes and green manure in sequence with cereals and other crops. Crop rotation can also improve soil structure and fertility by alternating deep-rooted and shallow-rooted plants. A related technique is to plant multi-species cover crops between commercial crops. This combines the advantages of intensive farming with continuous cover and polyculture .

What is the meaning of intensive farming?

A type of agricultural production system that uses high inputs of fertilizer, pesticides, labour and capital in relation to the size of the land area being farmed.

What is intensive farming Short answer?

Intensive Farming is that system of farming in which small farmlands are cultivated intensively using large inputs of manual labour, manures and fertilisers. It is practiced in areas of high population density since it is a labour intensive system of farming.

Where is intensive farming?

Many large-scale farm operators, especially in such relatively vast and agriculturally advanced nations as Canada and the United States, practice intensive agriculture in areas where land values are relatively low, and at great distances from markets, and farm enormous tracts of land with high yields.

What are examples of intensive farming?

Livestock. The term livestock refers to those individual animals who have no choice but to endure life on farms.

Is intensive farming good or bad?

Intensive, high-yielding agriculture may be the best way to meet growing demand for food while conserving biodiversity, say researchers. Intensive farming is said to create high levels of pollution and damage the environment more than organic farming.

Why is intensive farming expensive?

The intensive farming looks at increasing the yield in the given limited land space with a high dependency on fertilizers, labor, and machinery. But as extensive farming is remotely located, the labor cost, the production cost is higher. Also, the output calls for much more care and takes a while to yield the crops.

How does intensive farming work?

Intensive farms hold large numbers of animals, typically cows, pigs, turkeys, geese, or chickens, often indoors, typically at high densities. The aim is to produce large quantities of meat, eggs, or milk at the lowest possible cost. Food is supplied in place.

What is intensive farming?

Intensive farming (also intensive agriculture) is the practice where a lot of labor and capital is employed to maximize agricultural produce or yields. It is characterized with the intensive use of pesticides, fertilizer and other production inputs for crops and medication as well as concentrated feeding for the animal stock.

What is agrochemical intensive farming?

Excessive use of agro-chemicals. Intensive farming as earlier stated involves the utilization of numerous types of agro-chemicals including chemical pesticides, fertilizers, herbicides, insecticides, and acaracides.

Why is it bad for livestock to live in a small space?

Because it involves the use of various chemicals, growth hormones and excess crowding on a small space, the outcome is usually poor living conditions and hygiene for the livestock. Keeping livestock above their capacity is associated with pollution and poor hygiene which results in infections and various diseases.

Why is intensive farming more efficient?

Because intensive farmers utilize less farm inputs and less land per unit of the foodstuff yielded, it is more efficient. The farmer makes more profit by maximizing yields on a small piece of land as opposed to the conventional farming methods that needed large tracts of land but produced less yields/food produce. Since the requirements for equipment, space and other inputs are less compared to the food produced per unit, it is more economical and efficient.

What are the advantages and disadvantages of intensive farming?

Advantages of Intensive Farming. High crop yield. It means more variety of food can be produced. It is more efficient. Affordable food prices. Helps in ensuring regulated farming. Sustainable supply of food. Disadvantages of Intensive Farming. Poor living conditions and hygiene for livestock.

How does farming affect the environment?

Environmental studies and reports indicate that intensive farming impacts and degrades the environment in countless ways. The removal of trees, slush and burn techniques, and the clearing of forest areas to create room for agriculture has led to massive deforestation and soil erosion.

How does intensive farming affect agriculture?

For this reason, intensive farming has helped improve agricultural production. On the contrary, it has also lead to increased pollution and several other environmental concerns. In substantiating the issues surrounding intensive farming, let’s take a close look at its advantages and disadvantages.

What is capital intensive?

Capital intensive refers to an industry, organization or activity that uses a great deal of fixed capital relative to other factors of production such as labor. The following are illustrative examples.

What is knowledge intensive industry?

A knowledge intensive industry is an industry that primarily relies on human capital, also known as talent. Such industries may have few fixed assets. For example, a law office that has relatively high revenue as compared to its meager physical assets such as furniture, fixtures and computers.

Why are service industries labor intensive?

It is also common for some service industries to be labor intensive because customers value service from employees that is time consuming. For example, full service restaurants are labor intensive. Overview: Capital Intensive. Type.

Is a 1 million dollar restaurant a good investment?

The $1 million dollar restaurant is less capital intensive and is probably a better investment unless revenues are about to collapse because the business isn’t sustainable for some reason.

What is capital efficiency?

Capital efficiency is the amount of net profit that is generated by a dollar of capital. Everything else being equal, businesses with less fixed capital are generally more attractive. For example, two restaurants have net income of $300,000 per year but one represents a fixed investment of $2 million whereas the other represents an fixed investment of $1 million. The $1 million dollar restaurant is less capital intensive and is probably a better investment unless revenues are about to collapse because the business isn’t sustainable for some reason.

Is it better to have less capital or more?

All else being equal, a business with less capital is more efficient than a business with more capital if they are achieving the same results in the same industry. However, there are nuances to this that are significant. It is common for companies to outsource virtually everything to reduce their capital.