David R. Henderson  

The Locavore's Dilemma

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The Feature Article on Econlib this month is "The Locavore's Dilemma" by Jayson L. Lusk and F. Bailey Norwood, both agricultural economics professors at Oklahoma State University. Its subtitle, "Why Pineapples Shouldn't be Grown in North Dakota," is, of course, a reduction ad absurdum of the argument for "buying local."

In their article, Professors Lusk and Norwood apply basic economic principles, specifically, gains from exchange, comparative advantage, and the basics of balance of payments, to make the case that buying local should not be some kind of principled position and the case that government should not encourage or subsidize "buying local."

One of the most striking things I learned, in editing the piece, was about energy use. They write:

The truth is that the energy expended transporting food is relatively unimportant. According to USDA-ERS data, consumers spent $880.7 billion on food in 2006. Only four percent of these expenditures can be attributed to post-farm transportation costs.

I've categorized this post under "international Trade" because the tools normally used in international trade are the ones I use. But it could be categorized simply as "Trade."

Update: One of the authors of the article, Bailey Norwood, has graciously replied to many of the comments below.


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CATEGORIES: International Trade



COMMENTS (16 to date)
Scott writes:

I like this article. It seems that no one gets free trade.

The correct agenda should be to grow locally, where community gardens grow produce to support local food banks. A good amount of landscaping around your backyard could help end world hunger.

Chris Koresko writes:

Scott: The correct agenda should be to grow locally, where community gardens grow produce to support local food banks

Two questions:

  • Why is it more efficient to grow locally for food banks than for retail?
Bradley Calder writes:

Dr. Henderson,
Great post. If it is not too much trouble, could you attach a link to where you acquired the USDA-ERS data? Thanks a lot.

Best wishes,
Bradley

I loved Russ Roberts' observation that we have already tried the "buy local" proposition. It was called the Middle Ages.

Tracy W writes:

Locavorism isn't about the environment, it's about snob value. People are buying locally now who would have been buying air-transported delicacies from the remote corners of the earth in the 1950s and 60s, and organic food in the 1980s and 1990s. (I don't know what they were buying in the 1970s, probably fondue sets). You can point out the environmental costs to them and they'll just fall back to claiming that the food tastes better, and probably 2 days later they'll be back to arguing the locavore case.

Which is not to say that the article is a waste of time, it might change the minds of the non-food snobs. Unless they want to be food snobs.

Perplexed writes:

"Only four percent"? That equates to roughly $35,228,000,000 (e.g. $35 billion dollars). Since when is that a pittance? Perhaps billions of dollars means nothing to the ridiculously wealthy author of this absurd statement.

mle detroit writes:

All of the above. And, what about greenhouse gas emissions from $35 billion in "post-farm transportation" costs?

Carlton writes:

I was once at a "buy local" event at a mom and pop book store. One of the funniest things I have ever heard was when one audience member, suggested that we shop at more of the local shops in the area, like the bookstore we were in and places like Trader Joe's.

I about fell out of my chair. The only reason I was even at the event was because my friend was a presenter. I can't stand the buy local argument. I couldn't help myself, so I raised my hand, and in my best "I'm one of you/concerned local citizen" voice I recommended that we probably shouldn't shop at Trader Joe's because they are a national chain.

I guess the marketing folks at Trader Joe's are some of the best around! They have convinced the granola crowd that the profits of Trader Joe's are going to fellow hippies.

If I'm not mistaken, Trader Joe's is owned by the same German company that owns Aldi. If only the Trader Joe's crowd knew that their organic profits were being mixed with Wal-mart-esq Aldi profits. They would be appalled.

Clarified writes:

To avoid becoming perplexed it is important to avoid comparing apples to oranges. "$35 billion is a lot of money to one person" is meaningless, because $35 billion is not a lot of money to the 300 million people who are spending it each year. If spending that fraction of a dollar each day wasn't worth the improvement in food choices that it purchased, the dollar's owner wouldn't have spent it!

Even if buying non-local food is in some sense a luxury, that doesn't
make it especially immoral. None of us live purely ascetic lives. A
small fraction of an hour spent reading and writing these weblog
comments, multiplied by the wage that could have been earned in that
time, is already a greater expense than a day's worth of eating
non-locally.

Tracy w writes:

Perplexed, mle detroit, the point about the relatively small energy consumption going from the farm to the house is that, if we should be reducing total consumption of fossil fuels, we should be looking at the total energy cost. It does no good to save say 10,000 litres of petrol getting food from the farm to the table if the local farmer has to use 20,000 litres more than the distant farmer to grow the food in the first place. And that sort of relative variation is more likely if farm-to-table transport costs are small relative to other components.

This observation however will have zero impact on any locavore because locavorism is not about the environment.

Liam writes:

David,

I liked this article so much I posted it to FB and almost right away I was attacked. I was amazed! They attacked the premise without even reading the article.

This is not the first timeI have talked about this on FB. A friend of mine went on and on about disappearing farmland and how we should not be so spoiled with "exotic" food. My response was, "Since when are bananas and oranges exotic? Why should I not be able to buy apples in the winter? Is it not hypocritical to advocate 'buy local' by posting about it on your computer?"

Buzzkill writes:

The first thing I came away with from this article was the smell of Wickard v Filburn in the back of my nose.

Why should free trade impact local growers? I know that sounds simplistic, but considering the choice every one of us has to purchase a product from China, Mexico, Germany, Japan, Taiwan, or (for a change of pace) even America, why should any preference be placed on one over the other?

In a nutshell, why does this article exist? Why even write it, if not to place in the public consciousness a sublime distaste - all but unnoticed - that can be played on, over time, to become varying degrees of loathing? This is the same kind of propaganda used for programming the public that tells people to "say yes" to Martini and Rossi on the rocks, or to go to Marlboro Country (where the flavor is). It works, and those who employ it know it works.

How does Wickard v Filburn factor into this? For those who do not know about it, look it up; the rest, come with me...

The government wants control of everything that makes life possible - the air (cap-n-tax), the water (whatever policy they have on that), and food (S-510, Codex Al) - and they have been at this for decades. When the government can tell you what is going to happen to your personal stuff - belonging to you and no other by virtue of the work you put into making or getting it - they have taken away what makes life even worth living - the freedom to enjoy your life.

This is not about simply buying food from where you want to; this is about having the choice left to you. By making it a choice between personal option or free trade, the one choosing "personal" comes off as selfish and small rather than possessed of individual preferences; the one choosing "free trade" is seen as more cosmopolitan and civic-minded - all because they have no particular concern for the personal preferences of another. Who's selfish now?

Buzzkill writes:

While I know it seems silly or ludicrous to assume that the government is somehow trying to get from the states and the citizens what power it was never meant to have, such is the issue behind my response.

Consider the consequences of what has been stated as a great reason for leaving local economies behind, which would be a stimulated broader economy. The last time I can recall government acting in a similar fashion for similar reasons, it resulted in the ruling of Wickard v Filburn.

That the federal government could so easily step into a private citizen's life and assume full command of that private citizen's personal property - in this case, his hard-grown crops - is deeply disturbing; it runs contrary to the very root of liberty. For if a man has no command over his freedom - to come in and go out, to say and to be silent - and no command over what the laws of nature and of nature's God have clearly attributed to his name and ownership by reason of his honest labor, then what good is his life to him?

I neither deny nor reject the importance of supporting the health and prosperity of whatever society one attaches oneself to; by so binding oneself to the fortunes of others, one naturally makes oneself partly accountable for the condition and wellbeing of that group. That said, the individual cannot - must never - become inextricably assimilated by and subject to that society, or his liberty and property are surrendered to the whole and his life is devalued. The choice of whether, and how, to support that society should remain with the individual citizen alone; the choice to accept or reject continued membership of that individual within that society is all that the society should have at its command - and that only because of the other sovereign citizens who comprise its membership.

In the end, it cannot be argued otherwise, but that: the maker of a thing is in all ways superior to the thing made; that societies are made by men, and thus are subject to men rather than vice-versa; and, that when the wellbeing of a society or even one man are the question, the man must surely win.

I thank you for your time and your patience.

[Posted from email by permission--Econlib Ed.]

Many thanks to the thoughtful and interesting comments. Below, I join in the conversation by selecting a few comments and responding.

Scott writes:
I like this article. It seems that no one gets free trade. The correct agenda should be to grow locally, where community gardens grow produce to support local food banks. A good amount of landscaping around your backyard could help end world hunger.

I disagree with the proposed agenda. If you truly want to help the hungry, purchase quality food from the least expensive source, which may be local or non-local. This allows your budget to feed more hungry people than it would if you relegated your food charity to local foods only. Chris Koresko asks why it would be more efficient to grow local foods for food banks but not retail.

Bradley Calder asks for the data showing transportation costs are only 4% of food costs.
See the breakdown of the food dollar in an interesting figure by clicking "Where Does Your Food Dollar Go?" at http://www.ers.usda.gov/Briefing/FoodMarketingSystem/. The reader should note that energy use at the farm level is captured in the farm value component of the food dollar.

Perplexed notes that four percent of a large number is a large number, and Clarified aptly notes that a large sum of money may be a small sum on a per capita basis.

To Perplexed: To save some energy at the distribution level through local foods, only to use more energy at the farm level would not make sense, if lower energy use is the objective. Local food advocates have made a career out of ignoring this sensible assertion, and that was one of our motivations for writing the article. Tracy w rightly notes that local foods might not even same energy use at the distribution/consumer level at all.

Finally, we would be careless if we concentrated only on energy use, and ignored all the other resources involved in food production. It may be that more energy use is desirable if it saves significant labor or packaging costs.

Liam announces she was attacked on Facebook by posting the article.

Liam, I know how you feel. I experienced the same treatment by an agricultural economics policy magazine, as ag economists are rather fond of government programs regardless of the programs' sensibility. We should be thankful an organization like Econlib exists.

Aristotle once said, "The mark of an educated man is to be able to entertain an idea without necessarily accepting it," or something similar. I have learned even the educated have difficulties entertaining ideas in opposition to local food. You can lead a man to Econlib, but you cannot make him think!

Buzzkill remarks on a Supreme Court case I had never heard of but found quite interesting. It concerns some of government's outlandish grabs for power during the F.D. Roosevelt years.

I think many non-libertarians have a genuine fear that the public needs to be protected from profit-making businesses. They believe a firm only makes money by harming the consumer. Hence, they believe government regulation is needed in most everything.

Libertarians, on the other hand, know that unless significant externalities exist, a firm cannot become profitable without enhancing the lives of others by producing a cheaper product, better product, or both. I think the libertarian view is more logical.

I would like to thank everyone for their interest and comments. This was a fun article to write and I found your comments equally enjoyable.

Bailey Norwood

David R. Henderson writes:

Bailey,
Thanks for coming on and answering. Nicely done.
Two things:
(1) Liam is a man, not a woman.
(2) Your statement, "You can lead a man to Econlib, but you cannot make him think!" is a keeper. Thanks.
David

Terry Etherton writes:

I very enjoyed reading your article. It was informative and presented important information about the economic realities of "local food" production.

I have written much about opponents of contemporary food production systems on my blog, and the "scare" tactics they use for the public discussion about the role of science in society.

For more thoughts on Lusk and Norwood's article, see my blog post at
http://blogs.das.psu.edu/tetherton/2011/01/13/the-locavores-plight/

[edited for clarity of links--Econlib Ed.]

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