Arnold Kling  

Locavores vs. Basic Economics

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Steven Landsburg writes,


How many grapes were sacrificed by growing that California tomato in a place where there might have been a vineyard? How many morning commutes are increased, and by how much, because that New York greenhouse displaces a conveniently located housing development? What useful tasks could those California workers perform if they weren't busy growing tomatoes? What about the New York workers? What alternative uses were there for the fertilizers and the farming equipment -- or better yet, the resources that went into producing those fertilizers and farming equipment -- in each location?

The locavore movement says, in effect, that it knows better than the market the true cost of locally-grown vs. shipped-in produce. In fact, locavores know much less than the market. This is a basic and important point of economics. If I were to make a list of ten things that I hope that my students still understand years after they have taken my course, this would certainly be one of them.



COMMENTS (13 to date)
William Barghest writes:

Local food production is no more wasteful than any other form of religious infrastructure.

Dan Weber writes:

Quick point first, in that people may believe the market underprices energy (and therefore transportation) costs.

Longer point second:

Locally-grown food makes it a lot easier to go and see how your food is grown. You may not care about that, and that's fine.

In theory labeling could solve this issue, but there are lots of different things that one might care about (or not) in one's food. Antibiotics, cage-free, sustainable, grass-fed, low-fertilizer, and especially "organic": all sorts of buzzwords that are easily to put on a package, and also easy to fake.

There is a significant influence you can have over your farmer if you say "why do you (not) do X?" and he can respond with a reason, or offer to change his growing habits if you can get yourself and maybe 2 or 3 other people to change your buying habits. Knowledge is local, remember, and it's a lot easier to communicate with your farmer than it is with your grocer who operates through several intermediaries before getting to the farmer.

If all you do as a localvore is just buy locally grown food, you're missing the big benefit, which is knowing your food. You then have the option to select on the things that are important to you.

Silas Barta writes:

So it's safe to just casually assume that transportation fully reflects its environmental costs in all existing prices, even despite well-defined property rights in many of the environmental resources?

If you're going to remind locavores that they know less about the structure of production that they think, you also have to admit that you know less about how well prices reflect socialized resource use than you might think.

It's really not as simple as "If this were inefficient, the prices would say so." What's the price of grass on a near-overgrazed commons?

Thomas Sewell writes:
people may believe the market underprices energy (and therefore transportation) costs.
If you believe the market underprices something, isn't that an argument that people should purchase and use more of it, not less of it?

If energy were free, we'd be saying, "Use as much as you like!" If a ferrari or an HDTV was listed for $1 (underpriced), you'd be telling all your friends about it so that they could go buy it.

Hyena writes:

@Silas

It's been well-documented that maker-to-market shipping is one of the least energy intensive part of agriculture. In fact, it is dwarfed by market-to-home transportation. Rather, more energy and resources are expended growing food. That includes fertilizer for poor soils and water wasted by growing food in areas with inadequate rainfall or low water tables.

It makes sense to grow food where it is easier to produce it and ship it where it is desired. It cuts down on energy costs, water use and land use. There is no environmental case whatever for this most recent foodie fad. It is, on an environmental level, nothing short of a crime.

@Kling

"Locavores" don't really think they know more than the market. Rather, it is another in a long line of foodie trends which are largely driven by the encroachment of agribusiness on their symbols of gastronomic authenticity. First it was "natural", then "organic" and now "local" food. The concept being, each time, to avoid big businesses and drain their products of authenticity. It has nothing to do with the market and everything to do with the sense, not entirely unjustified, that agribusinesses are inauthentic agriculturalists.

I happen to agree with this sentiment, but "locavorism" is nothing more than a recipe for environmental destruction.

Peter Finch writes:

Locally grown food means local farms growing the food. Land being used for farms looks nice, adds to the quaint feel, and isn't being used for houses. All of which contributes to house values for people who bought-in a while ago.

I've owned homes in a couple of pricey Boston-area markets, and in both of them keeping new houses off the market was an important subtext in the eat-local movement. It was the sort of thing neighbors would whisper to one-another.

There might be True Believers out there, but I'm suspicious as to their actual number. If you say "eat local," but live in a city, maybe you don't really count.

Joel Johnson writes:

We'll vote with our dollars, even though I think the non-pecuniary costs are large and lopsided against would-be locavores. I like my local produce because it tastes better than the supermarket stuff that comes from far away. I don't think I'm just signaling either (only a little). The taste difference is enormous! I never knew how good vegetables could be until I went to the farmer's market.

Loyal reader by the way, even though I often don't agree with your views. I like your ideas about less government intervention, but I accept (am resigned to?) the fact that government interference is here and it's here to stay. In this second-best world I want to fight in the battle over how and on whose behalf the government interferes.

Are you in that fight?

liberty writes:

Thomas Sewell - that's the point, people ARE because the market under-priced it, i.e., set the price TOO LOW. The argument is that, if negative externalities were taken into account the price would be higher, and people would use less. So, the market has failed here, setting the price too low.

However, this argument is weak. In general these "locally grown produce" movements cannot do the calculations to determine what the opportunity cost is, what new inefficiencies they are adding by reducing the choices of where things can be grown and exchanged. Transportation is only one cost of many, and the inefficiencies of forcing local land use, reducing opportunities for use of comparative advantage, etc may well exceed the benefits of reduced transportation use. A better solution might be to internalize the externalities, by increasing property rights over pollution.

Dan Weber writes:

If you believe the market underprices something, isn't that an argument that people should purchase and use more of it, not less of it?

That is the individual incentive, yes. Which is why economists worry so much about pricing externalities. (Although as others have pointed out, the transportation energy costs really aren't significant. Reducing fertilizer run-off ranks higher on my personal list, and killing the agriculture subsidies would be the proper way to end that distortion. But good luck with that!)

Again, if you only buy local because you think you're supposed to, you're a cargo-cult localvore. You're going through the motions, but the real reason to eat local is to open up food choices. My family has explored some local-food options, but the few we've seen so far are just like the other agribusinesses, so we might as well just let the Food Lion do the work of getting it all close to us.

rjs writes:

buying locally may not be the answer, but this is still the problem:

http://gregor.us/wp-content/uploads/2010/08/Global-Crude-Oil-Supply-2002-2010-in-kbpd1.jpg

Doug Frazier writes:

My locavorism amounts to wanting to buy tastier and fresher vegtables at the local farmers market. They are tastier than those that can be purchased in the town grocery store since they were not picked green. Even a 44 mile drive to the upscale Whole Foods does not yield the same taste. I actually buy from someone that grows about 1/2 mile away and have visited their garden. I pay above the prices in the grocery store for the better product. I suspect that the mass market approach simply does not have the distribution channel it needs to supply this niche so others can profit by selling into it. I am rich enough to indulge this way, not all can. Seems like normal market forces in play to me actually.

Locovores are telling the market that the product they wish to purchase is one that is tastier and possibly one that can be verified to not be raised in human feces (vegies and eggs) that the big players have yet to address. Seems you need to define what is being purchased more clearly rather than saying a tomato or egg is the same. They are actually not...

Yancey Ward writes:

I applaud locavorism. Keeps the cost of my food lower.

MJ writes:

I have to agree that, in most case, local produce does taste better. But only in season. I would tend to buy local when in season but i do not hesitate to by imported when out of season. Plus, i do love my citrus fruits and juices. Things i would never see within my 100 mile circle. But there was one exception. The best tasting tomatoes i've ever gotten outside of my own garden were not locally grown but imported from Holland. They simply found a way to ship fully ripened tomatoes.

I'm an engineer and anytime someone mentioned food miles i immediately asked, "Yes, but just how much energy?" I never would get an answer. That only raised my suspicions. I fear that, as far as counting food miles is concerned, locally grown only removes the largest, most consolidated and, therefore most efficient per mile link or two in the transport of anyone's said pound of carrots while leaving all the other less efficient links in place.

The locavores keep repeating that today's carrot travels an average of 1300 miles to one's table. They never mention that there's a million of them together for 1200 of those miles, and many thousands together for the next 90. What are they hiding ?

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