Do Locavores Have a Dilemma?
Economists debate the local food movement.
This article is from Dollars & Sense: Real World Economics, available at http://www.dollarsandsense.org
This article is from the
July/August 2015 issue.
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Food produced on small farms close to where it is consumed—or “local food” for short—accounts for only about 2% of all the food produced in the United States today, but demand for it is growing rapidly. According to the U.S. Department of Agriculture, sales of food going directly from farmers’ fields to consumer’s kitchens have more than tripled in the past twenty years. During the same period, the number of farmers’ markets in the United States has quintupled, and it’s increasingly easy to talk about “CSAs”—community-supported agriculture operations where consumers pay up front for a share in the season’s output—without explaining the acronym. The National Restaurant Association’s “What’s Hot” Chef Survey found that locally sourced meats and locally grown produce were the top two trends reported by chefs in 2014, followed by environmental sustainability.
But as local food has grown, so have the number of critics who claim that locavores have a dilemma. The dilemma, prominently argued by Pierre Desrochers and Hiroko Shimizu in their 2012 book The Locavore’s Dilemma: In Praise of the 10,000-mile Diet, is that local food conflicts with the goal of feeding more people better food in an ecologically sustainable way. In other words, well-meaning locavores are inadvertently promoting a future characterized by less food security and greater environmental destruction. The critics are typically academics, and while not all of them are economists, they rely on economic arguments to support their claims that the globalized food chain has improved our lives.
Why are critics pessimistic about the trend toward local food? Their arguments hinge on what we call the CASTE paradigm—the idea that Comparative Advantage and economies of Scale justify global Trade and lead to greater Efficiency (see sidebar).
The CASTE Paradigm
Efficiency, or maximizing benefits relative to costs, is the guiding principle in most economic analysis. For the critics, local food simply cannot be efficient because it does not take advantage of what we are calling “CASTE”—the idea that Comparative Advantage and economies of Scale justify global Trade and lead to greater Efficiency.
The theory of comparative advantage, developed by economist David Ricardo in the 19th century, says that because regions have different relative advantages in production, they should produce the goods and services that can be produced at the lowest “opportunity cost.” Even the best use of a resource—land, capital, time, labor—has an opportunity cost, which is the benefit that would have been gained from the next best use. Land devoted to growing food, for example, has a lower opportunity cost in Iowa than in New York City, since land in New York City is highly valued for office space or housing. So Iowa grows corn, this line of argument goes, because the alternatives are simply not as profitable to the owners of the land. As a rule, CASTE critics assert that food should be grown where it has the lowest opportunity cost, in places that tend not to be close to most potential consumers.
The concept of economies of scale suggests that larger farms can make more efficient use of modern-day farming methods than smaller ones. Someone cultivating an acre or two of rooftop garden in New York City, for example, cannot take advantage of the large tractors, harvesters, and irrigation systems that can quickly plow, sow, fertilize and harvest a thousand acres of crops. Economies of scale help explain why the price of a bushel of corn is currently around $4, a price that might not be achievable by small farms producing diversified crops.
Taken together, the assumptions of comparative advantage and economies of scale lead to the conclusion that regions should specialize and trade. If Iowa’s comparative advantage in corn production along with economies of scale in farm size allow it to produce corn more cheaply than other regions, economists say, it should specialize in corn and trade for other goods and services. New York City residents benefit from the inexpensively produced corn, and resources are freed up to use their land, labor, and capital to produce other goods.
The idea that comparative advantage, economies of scale, and trade leads to the greatest efficiency—which we call the “CASTE” paradigm—is the foundation upon which modern economic thought has been built, and the critique of local food is just one recent example of how it has been applied.
Does Local Spinach Create Jobs?
Advocates of local food provide a host of reasons for its superiority, including its economic benefits. The mechanism for creating these benefits is what economists call the “multiplier effect”: A dollar spent on local food results in a local farmer spending part of that dollar on other goods and services in the local economy, creating a virtuous circle of wealth and jobs. Despite clear evidence of the multiplier effect, critics argue that more wealth could be created overall through specialization and trade, because food can be grown with fewer resources, which frees up resources for creating wealth elsewhere. In his 2008 article “Should We Buy Only Locally Grown Produce?” for the Ludwig von Mises Institute, economist Art Carden tries to illustrate the potential consequences of producing spinach locally in an area lacking comparative advantage in spinach production: “[T]he cultivation of spinach in Memphis will require more fertilizer, more rakes, more tillers, and more hoes than the cultivation of spinach in California.” Failing to exploit comparative advantage in food production, he concludes, “is, at its logical limit, a prescription for poverty and starvation.”
In a 2010 blog post cheekily titled “Loco-vores,” economist Steve Landsberg asks, “How can we possibly gather enough information to ... reach a conclusion about which tomato imposes the fewest costs on our neighbors?” His response to the question is simple: the price. For Landsberg and other critics, the higher-priced local tomato signals higher opportunity costs from not exploiting regional advantages in land, labor, and other resources and not taking advantage of economies of scale offered by large global farms. In effect, goes the argument, we are all poorer by paying the higher prices of local spinach and tomatoes, since those higher prices eat into our ability to buy other goods and services.
Are Local Tomatoes Environmentally Destructive?
Local food does not only undermine economic efficiency, according to critics. The same CASTE concepts (see sidebar) are used to argue against its supposed benefits in terms of environmental protection. Locavores have argued that transporting food long distances is bad environmental behavior and that reducing “food miles” is an important reason for buying local food. Critics point out that since food transport accounts for less than 5% of the carbon emissions embodied in food in the United States, it is better to exploit comparative advantage in growing conditions—reducing the use of land, water, chemicals, and energy—and engage in long-distance trade. For example, growing tomatoes in the UK reportedly produces three times the greenhouse gas emissions associated with importing them from Spain, since the extra energy and fertilizer required for greenhouse-grown tomatoes overwhelms the emissions savings from reduced transport. Further, individual car trips to farmers’ markets may cause more pollution than shipping large quantities of food via trucks or ships, which take advantage of economies of scale in transport.
The critics’ environmental arguments go beyond debates over the importance of food miles. Economist Edward Glaeser, in a critique of the trend toward urban farming, estimates that urban population densities would need to be cut in half if just 7% of existing agricultural land were relocated to metro areas. Since lower population densities would lead to longer commutes, he argues that urban farming will increase rather than cut carbon emissions. In his book Just Food, agricultural historian James E. McWilliams argues that local food systems in water-scarce cities like Las Vegas and Santa Fe could only be created “through costly and environmentally damaging irrigation projects.” Tyler Cowen, author of An Economist Gets Lunch, points to the failed Saudi wheat growing experiment in the 1980s that wasted hundreds of billions of cubic meters of water. According to Cowen, the international price of wheat at the time was $120 per ton while Saudi wheat, reflecting these high resource requirements, cost $500 per ton to produce. In sum, food grown in accordance with the principles of comparative advantage and economies of scale should save resources and reduce carbon emissions, all with the added upside of lower consumer prices.
Does That Local Squash Taste Better?
Surely, though, the critics would have a hard time using the CASTE paradigm to argue that global food tastes better than fresh, local food, right? Indeed, journalist Stephen Budiansky, whose main argument in his New York Times editorial “Math Lessons for Locavores” is that local food is inefficient, concedes the “pleasures and advantages to the palate and the spirit of eating what’s local, fresh and in season.” Yet, he notes, shorter food-supply chains do not deliver fresh fruits and vegetables in the middle of winter to most people. According to agricultural economist Jaysen Lusk in his 2013 book The Food Police, if the choice is fresh peaches from afar or nothing but squash all winter, his preference is clear: it’s peaches. Other critics believe it is clear that relying more heavily on local food would lead to a less nutritious diet. Steven Sexton, an agricultural economist and author of several articles critiquing local food, argues that because there is a correlation between income, on one hand, and the consumption of fresh fruits and vegetables, on the other, the higher prices of local food would make consumers poorer and more reliant on unhealthy food.
In the view of locavores, shorter food supply chains and agricultural diversification also promise increased food security in the face of environmental change, political instability, and speculation in global markets. Not surprisingly, critics question these propositions as well. Economists suggest that exploiting a region’s comparative advantage in food production through specialization, and taking advantage of economies of scale, is the only way to efficiently feed the nine to ten billion people we can expect to inhabit the planet by 2050. In addition, specialization and trade is billed as a way to reduce geographic-specific risks, in the face of environmental and political change. Desrochers and Shimizu remind us that “subsistence farmers periodically starve” and when “they escape famine, it is typically because relief efforts were able to deliver the products of large-scale monocultures grown in distant lands.”
The Marginal Benefit of Marginal Thinking
The extent of problems in the food system would certainly seem to require a big shift, but economic analysis tends to focus on “marginal” changes—small, incremental changes at the margins, like whether or not to cultivate one more acre of land, or whether or not to employ one more worker—to the exclusion of more systemic ones. This tendency is rooted in the desire of 19th-century economists to mathematically formalize economics principles. It may seem logical for a farmer to only decide to farm an acre of marginal land if the additional revenue gained is at least a little greater than the additional costs. But this logic has had substantive effects on the questions economists ask, the problems they identify, and the solutions they propose.
To show how “marginal thinking” affects the local food debate, we can point to a study by agricultural economist Steven Sexton. He constructs what might be a useful low-tech study to estimate the land and inputs needed to grow more food locally, but he underpins his research with “marginalist” assumptions. Specifically, he calculates the resources that would be needed to produce corn, soy, and dairy in the same amounts and using the same methods that the United States currently does, with only a shift toward more local production. He finds that the shift would require more land and other resources. This hypothetical example assumes that the only change is where production happens and does not alter any other component of either the production methods or the products which are grown.
Most advocates for agricultural alternatives, however, are not seeking to reproduce the existing food system, just closer to where they live; they believe systemic changes are needed. Yet the dominance of marginal thinking among economists prevents them from even considering systemic changes.
Do We Need More CASTE?
While critics argue that a sustainable and food-secure future requires a more thorough application of the CASTE paradigm, actual evidence that a sustainable food system requires increasing reliance on comparative advantage and economies of scale seems to be lacking. Economies of scale undeniably exist with respect to various inputs to agricultural production, but the concept is not synonymous with “bigger is better.” A 2013 U.S. Department of Agriculture report praising the trend toward industrial farming and long-distance trade nonetheless noted that “most economists are skeptical that scale economies usefully explain increased farm sizes” partly because “crop production still covers a wide range of viable farm sizes.”
Comparative advantage based on climatic and soil conditions also exists, but the anti-locavore literature presents little evidence that cost reductions are mainly brought about through natural sources of comparative advantage. Carden’s claim that spinach is better grown in California than in Memphis should come with a footnote, since California’s supposed comparative advantage in spinach production is made possible by federally subsidized, imported irrigation water. As we witness the unfolding drought crisis in California, it is hard to maintain that society benefits from growing so much spinach (or other water-intensive crops, like almonds) in the state.
Other important reasons for lower costs of food production may appear to be the result of comparative advantage, but instead highlight inequities in the food system. Florida’s access to low-wage tomato pickers, for example, results in lower prices at American supermarkets—but these sources of comparative advantage are conspicuously absent from the critics’ examples.
Locavores may also fault the CASTE paradigm for excessive “tradeoff thinking,” which assumes any cost can be offset by any benefit. The assumption that all benefits (food, good soil, happiness) and all costs (inputs, pollution, psychological distress) might be measured and weighed against one another to make efficient decisions betrays the utilitarian philosophical basis of economics. It may seem like a reasonable way to make many decisions, but it is only one approach to making value judgments. Many ecological economists, for example, believe that ecosystem limits cannot be ignored and are not simply costs that can be traded off against monetary benefits. For instance, we may decide that four degrees of warming would lead to an unacceptable amount of climate disruption, whether or not economists believed that the benefits of the associated fossil fuel use outweigh its costs.
Even for those who agree that weighing benefits against costs is a reasonable way to make decisions, in practice, and in the local food critiques in particular, benefits and costs that do not have market values are often ignored. In particular, the critics fail to take many external costs—those that producers and consumers impose on third parties, and are therefore not reflected in market prices—into account. These authors observe that the bulk of the environmental impacts from agriculture come from the production phase but only use this observation in discussing the merits of comparative advantage. They do not critically examine production practices that routinely poison farmworkers, deplete soil nutrients, destroy rural communities, breed herbicide-resistant weeds, impoverish farmers, and contaminate waterways destroying marine life and biodiversity.
Finally, the role of power in the food system is conspicuously absent from the CASTE analysis. Its absence is not surprising; power is a concept that does not fit easily into a framework focusing on the freedom of autonomous and equal individuals to make utility-maximizing decisions. In that framework, the market is simply an institution that coordinates production and distribution decisions through its near-magical capacity to gather information about consumers’ preferences and producers’ costs. Yet, looking through the conceptual lens of power relations—between agribusiness and contract farmers, farm owners and farmworkers, food corporations and low-income consumers, the government and immigrant workers—gives us a clearer picture of who determines what costs and benefits are created in the food system and how these costs and benefits are distributed. Paying attention to power allows for the possibility that the falling food prices attributed to comparative advantage and economies of scale may be related, instead, to the ability of the powerful to offload social and environmental costs onto the relatively powerless.
Buy Local? Why Local?
As the near absence of power in the CASTE analysis indicates, much of the disagreement between local food supporters and these critics can be chalked up to differences in the values underlying them. Most economists value efficiency above all else and believe that uncertain social and environmental costs can be traded off against other benefits. Meanwhile, locavores have different end goals—providing enough food for all and creating more resilient local economies while staying within ecological limits. So these groups, of course, tend to talk past each other. Yet both the CASTE analysis and its shortcomings suggest some items for a locavore’s “to do” list, including acknowledging the real benefits the existing food system provides, understanding how power affects who receives these benefits, and realizing the political changes needed to make sure the food system benefits everyone.
“Local food”? or a just and sustainable food system?
For most locavores, the impulse to “buy local” is rooted in the desire to reject the ailing industrial food system and to feel a greater connection to how food is grown. With its emphasis on location and scale, however, the locavore movement can unintentionally confuse its means—local and small-scale—with the end goal of building a better food system. But what would a better food system look like? Though different communities will have different priorities, some goals common to the local food movement might include:
- Healthy people: The food system should provide safe, healthy food that nurtures people’s bodies and minds.
- Accessibility: A wide variety of healthy food must be available to rich and poor alike.
- Decent work: The food system should ensure safe jobs and living wages for everyone working in it, including people working on farms, in food processing plants, and in stores and restaurants.
- Healthy ecosystems: Food should be grown and processed using less fossil fuel and fewer petrochemical fertilizers and pesticides, to prevent excess air and water pollution. A regenerative food system can help improve the quality of soil, water, and air.
Importantly, each of these goals must be placed ahead of profits. Keeping in mind such values and goals, which are at the root of “buy local”” campaigns, is important both so that we can monitor progress toward them and remain open-minded about how to achieve them.
Overlooking pressing social justice and ecological problems in the food system when making efficiency judgments, as economists have done, is not a balanced approach. The argument that local food activists have downplayed the benefits of the existing food system, however, is worth addressing. Many people do enjoy the diversity of foods that are now available year-round. Consumers in the northern United States are reluctant to give up citrus fruits and juices produced in the south, and many consumers desire fresh over preserved foods. Nutrition and lifespans have improved, thanks in part to increased food access. Likewise, because of inequalities—perpetuated, to be sure, by the system that allows agribusiness giants to profit year after year—higher-priced food would make food even more inaccessible to the nearly one in six Americans who is already food insecure. (See Gerald Friedman, “Food Insecurity in Affluent America,” D&S, March/April 2015.)
It’s possible to acknowledge the benefits of the existing industrialized food system without concluding, as the authors we have reviewed often do, that this is the best we can hope for. It’s possible to acknowledge these benefits while understanding that, in many cases, they are possible only because of costs imposed on already vulnerable groups of people. Only by having a clear view of who wins and who loses can we make informed, collective decisions that do not alienate or ignore important segments of the community.
These decisions to improve our food system will not likely come about purely through the market. Ironically, many locavores voice their preferences for a fair and sustainable food system mainly by exercising the consumer sovereignty that mainstream economists claim is the most important benefit of markets. Yet, simply “voting with our dollars” will not be enough to transform the current food system into a sustainable one. Even if the next twenty years brings another tripling of direct farm-to-consumer sales, local food will still be a sapling in the forest of big food. Knowing the farmers that grow your food may be worthwhile, but it’s not enough.
Some changes that might not seem to have much to do with food at all can, in fact, contribute to building a just and sustainable food system. Environmental policies such as carbon and pollution taxes can help the prices of products come closer to reflecting their true social costs and provide incentives for more sustainable practices. Meanwhile, subsidies for renewable energy can help reduce the carbon footprint of food production and distribution. Such policies must be paired with others that address inequality, so that no one is forced to decide between buying healthy food and paying other bills. Expanding the SNAP program (formerly known as food stamps), raising the minimum wage, and increasing the earned income tax credit can all help increase food access, as can loftier goals like increasing top tax rates, guaranteeing jobs for all, and providing basic income guarantees. Shorter workweeks paired with good wages and benefits can also help move us toward a healthier food system, since many people simply do not have time to engage in food preparation or even learn what is in their food. These goals may not be easy to achieve, but because they can help improve the lives of so many people, they have the power to unite locavores with other social movements. By moving beyond the notion of shopping our way to a better world and embracing the wider set of changes necessary to increase social justice, locavores can help resolve dilemmas in the food system and beyond.
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