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Buying Local Makes Economic Sense

oran hesterman

As the farmers market season gets under way in the U.S., more shoppers than ever will be supporting local growers and producers. (According to a 2010 Department of Agriculture survey, at least 6,132 markets exist nationally, a 16 percent increase from 2009). While there has never been a more popular time for extolling the nutritional and culinary value of local food in the mainstream media, not everyone is convinced of the economic benefits of local food systems.

In a widely circulated article earlier this year, economists Jayson Lusk and F. Bailey Norwood argue that local food is a poor economic model and liken it to a fad diet that destroys community wealth. They emphasize that local food is more expensive than non-local and suggest that government policies and programs (such as those supporting Farm to School) should not encourage widespread purchasing of local food. But their argument misses the mark regarding both costs and benefits.

The Cost of Local

There are three important things to keep in mind when we consider costs. First, early research suggests that many locally grown items at farmers markets — even organic items! — are comparable to or even less expensive than those same items (which may not be locally grown) in conventional grocery stores. Researchers from Bard College and the Northeast Organic Farming Association released a report on this issue in 2011 and the Leopold Center for Sustainable Agriculture conducted a similar study in Iowa in 2009.

Second, one of the biggest challenges — and therefore opportunities — in our broken food system is the loss of processing and distribution infrastructure. The lack of slaughterhouses has received a fair bit of recent press, but canneries, warehouses and cutting shops also have shut their doors over the years. With fewer options for getting their products to market, small and mid-sized farmers and ranchers have taken on many of the post-production expenses themselves, and some of these costs are passed down to the consumer.

The good news is that organizations such as Boston’s Red Tomato, Farm Fresh Rhode Island and Detroit Eastern Market are addressing this gap in infrastructure by working as food hubs to aggregate, market and distribute locally produced food. Their efforts free up time, labor and cost for the farmers, while streamlining the distribution of local food to consumers and institutions such as schools, restaurants, hospitals and even grocery stores.

The third point when considering the advantages of local food is that innovative programs to help low-income consumers afford locally grown products are springing up across the country. Michigan’s Double Up Food Bucks program provides families receiving SNAP (food assistance) benefits the opportunity to double their food budget dollars if they purchase locally grown fruits and vegetables at area farmers markets. Other cities around the country are following suit — this kind of project is a perfect example of one that benefits consumers and growers alike, lowering the cost of produce while ensuring a fair income for farmers.

The Economic Benefits of Local

Those who focus solely on the cost of local food ignore a major benefit of local food economies: the multiplier effect. This term refers to the economic phenomenon of initial spending (by the government or individuals) leading to increased consumer spending in a community, resulting in greater income for that community. Studies show that the multiplier effect of a locally owned business is two or three times higher than that of a non-local business.

Consider this: When you buy a non-local head of lettuce or piece of fruit in a national chain supermarket, the majority of that dollar goes to the corporation that owns the store. When you buy that head of lettuce at a farmers market, the farmer takes home 100 percent of that dollar. Of course, farmers have expenses too, but one of the reasons for an increased multiplier is that local owners tend to spend more on local employees, who in turn spend their money with area merchants, who tend to provide greater support for local organizations and activities.

When we talk about “buying local food,” we are not just talking about supporting our farmers; in fact, the economic health of our communities is at stake. Economist Michael Shuman determined that shifting just 20 percent of food spending in the city of Detroit would result in a boost of nearly half a billion dollars, including more than 4,700 new jobs and an additional $20 million in business taxes to the city each year. In today’s economic climate, we cannot afford to ignore the power of the local food economy.

Beyond the Farmers Market

So what can you do to support local food economies? The farmers market is a great place to start, but we need to advocate for local food in our stores, schools, restaurants, hospitals and government offices. We need to harness the purchasing power of these institutions as drivers of local economic development.

Another way to make the shift from conscious consumer in your own home to engaged food citizen in your community is to get involved in policy. From local food policy councils to advocating for local and regional food in the upcoming federal Farm Bill, take this opportunity to learn about the issues and the stakeholders involved. The National Sustainable Agriculture Coalition and the Community Food Security Coalition are two organizations with plenty of suggestions for ways to get active in the policy arena. In my book, “Fair Food: Growing a Healthy Sustainable Food System for All,” you will find an extensive list of organizations that are ready to help you deepen your engagement as a fair food citizen.

We should do everything we can to foster local food economies — nothing short of the health and well-being of our communities is at stake.

Oran B. Hesterman is president and CEO of Fair Food Network, a national nonprofit organization working at the intersection of food systems, sustainability and social equality to guarantee access to healthy, fresh and sustainably grown food, especially in underserved communities. He lives in Ann Arbor, Mich.

Photo: Oran B. Hesterman. Credit: Douglas Elbinger

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  • bayu 8·25·14

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