The Economics of Local Food

Last February a day of programming at the Food Summit was capped with a lively debate, held at Glenn Gould Studio at CBC’s Toronto headquarters. The question foisted upon the panel of experts was, local food: for, or against? 

The Locavore herself Sarah Elton and New York food writer Mark Bittman squared off with their “for” arguments as Brit author of “Panic on a Plate” Mark Lyons stood beside Andrea Mandell-Campbell with their reasons against. As polarizing as the movement is, the discussion remained fairly light, swaying here and there into the territory of the economic impacts of buying (or not buying) locally.

This week, the Wall Street Journal announced the release of George Mason University professor Tyler Cowen’s new book “An Economist Gets Lunch: New Rules for Everyday Foodies”.  (I still don’t really know what a “foodie” is, and the use of the word in the title is almost (but not quite) enough to prevent me from reading it when it comes out) His opinion? That the perceived economic benefits of buying locally simply don’t exist. The overriding theme seems to be local food is reserved for the wealthy minority, while large shipments of imported food support the scale needed to feed the general masses in a cost-effective way.  You can have local, but it really doesn’t help the local economy, because it simply cannot support the scale needed to grow, process, and distribute lots of food.

It’s unfortunate that the ideas “Local Food” and “Economics” seem to co-exist about as peacefully as a bag of cats.  Still, I sort of understand where this argument comes from. Sure, those fancy “artisan” foods at the farmers’ market are fine for the odd indulgence, but it’s the barges of bananas and 25 cent garlic from China that really fills grocery carts (and stomachs.)  In an interview with the WSJ, Cowen argues that smaller farms often use inefficient methods of growing and transport that end up costing more than having a giant ship transport tonnes of goods in one long haul.

It’s exactly this “throw up your hands and give up” type of thinking that dooms the growth of local food. If awkward distribution prevents shipping large scale food from local farms, the last way to fix this is to keep buying cheaper imported food and call it a day. It’s not enough to dabble in buying local any more than one can dabble in the stock market and expect to have a return on their investment.  As an economist, I’m surprised the author doesn’t realize this. The business of growing a local food market that works in the long term is no different from investing in an RRSP. You make some gains, lose here and there, but in the long term,  modest growth has made us a little richer than when we started. At some point though, you have to make the decision to put some money toward the goal.

Yes, It’s hard at first. Making those first contributions when you think you’re already stretched to the limit can be painful, but then a system of growing, processing, and distributing local food will self-perpetuate and become efficient at running itself (compound interest, anyone?)

What seems to get lost in the shuffle is that economics runs both ways. If everyone who eats believes they have a right to the cheapest food possible, they are ignoring what boils down to the most important part of the equation: the farmer on the other end of their food. Choosing food solely on what it costs benefits no one. Farmers in Ontario are undersold and can’t grow their business, while those thousands of miles away you’ve never met continue to be paid substandard wages to cater to Western desires for cheap and plentiful food.

We are in the midst of a full-on food renaissance. Our ways of acquiring food have not changed this radically since the birth of the supermarket in the 1930′s. Buying locally is already a defining movement, not an option that we may or may not choose. The question is not, “is it economically viable?” The question is “What can I do to make sure it is?”

- Kelly Hughes, Local Food Procurement Officer at Metro Toronto Convention Centre