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Decoding Demand for Local Food - Part 4 (Local Economy)

April 25 Laura Ward

 

 

In our current series, Localize is exploring the underlying drivers behind local food preferences and the characteristics of local food that are grabbing the attention  and dollars of consumers.

So far, we've discussed:

How to give consumers what they want when there is no single definition of local,

How local food systems affect our health, and

Whether local food systems are more environmentally friendly.

In this post, we are discussing Local Economy as one of five underlying attributes that drives local product purchasing. 

Locally marketed food through direct and intermediated channels grossed $4.8 billion in 2008 4x the amount recorded in the last US census.[1] So, what effect does more people buying local food have on the local economy?

"Research on the economic implications of localized food production indicates that local food systems provide substantial economic benefits to communities and regions in terms of direct, indirect, and induced impacts."[2]

Buying local food has subtantial economic benefits for a region — providing more jobs, personal income, and net revenues for farmers.[3] Not to mention increases in tax revenue.

Research indicates that a greater share of each dollar given to local businesses is recirculated within the local economy.[4][5] A simple example is to compare the lives of two different lettuce heads, a play off Sustain Ontario's apple scenario:

Once upon a time there were two heads of lettuce. One was grown in Alberta and the other — Quebec. Both heads are delivered and sold to customers at an Edmonton-based grocery store for the same price. In the Edmonton local supply chain, the money from one head of lettuce remains in the region longer and exponentially multiples, creating growth in the local economy. 

 

Farmers.png

Money from the Quebec lettuce head is divvied up to pay those involved in transporting and producing— the distributor, importer, wholesaler, and manufacturer, resulting in a large portion of profit leaving Alberta's economy.

As Anna Lappé, a highly respected expert on food systems and sustainable food, says: “every time you spend money, you're casting a vote for the kind of world you want.” We can choose whether to feed big-Ag or support small food businesses run by members from our own community."Many communities are choosing to take control of their own economic character by supporting unique one-of-a-kind local businesses."[6]

Not to claim that it is possible for the entire world to be fed without importing and exporting goods or having centralized agriculture — certainly that is an oversimplification. However, it is clear there are many economic and social benefits to supporting local food businesses.

Stay tuned to the series as we explore more underlying attributes that drive local product purchasing:

  • • Health
  • • Environmental impact
  • • Local Economy
  • • Up next >> Freshness
  • Quality

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References:

[1] Low, Sarah A. and Vogel, Stephen J., Direct and Intermediated Marketing of Local Foods in the United States (November 1, 2011). USDA-ERS Economic Research Report No. 128. Retreived on April 20, 2017, from: https://ssrn.com/abstract=2114361 or http://dx.doi.org/10.2139/ssrn.2114361

[2] Pinchot, Ariel. 2014. The Economics of Local Food Systems. Retreived April 20, 2017, from: https://www.extension.umn.edu/community/research/reports/docs/2014-Economics-of-Local-Food-Systems.pdf 

[3] Cantrell, P., Conner, D., Erickcek, G., & Hamm, M. (2006). Eat fresh and grow jobs, Michigan. Beulah, MI: Michigan Land Use Institute. Retrieved from http://www.mlui.org/userfiles/filemanager/274/

[4] “Independent BC: Small Business and the British Columbia Economy” [PDF]. Civic Economics, Feb. 2013.

[5] “Thinking Outside the Box: A Report on Independent Merchants and the Local Economy” [PDF]. Civic Economics, Sept. 2009.

[6] LaMore, Rex L. Ph.D. 2010. Why Buy Local? An Assessment of the Economic Advantages of Shopping at Locally Owned Businesses. Retrieved April 25, from: http://www.ced.msu.edu/upload/reports/why%20buy%20local.pdf 

 

Categories: Defining Local Food

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