Policy Innovations Digital Magazine (2006-2016): Briefings: Local Produce vs. Global Trade

Oct 25, 2007

This past summer's debate over the 2007 U.S. Farm Bill may lead to historic reforms. If passed, the proposed Farm Bill would reduce commodity payments to farmers with high incomes, increase funding for environmental preservation, specialty crops, and renewable fuel sources, and bring U.S. agriculture policy into further compliance with international law under the World Trade Organization.

Most importantly, the Bush Administration proposes to limit commodity-payment eligibility to farmers with adjusted incomes below $200,000—a significant reduction from the current $2.5 million cap, which permits tax dollars to subsidize large corporate farms. This is refreshing change in a system where even hundreds of Manhattanites receive payouts.

The 2007 Farm Bill appeals to two different strains of agriculture reform. Decreased subsidies for major commodities will reduce distortions in international markets and bolster international trade, thus satisfying advocates of free trade and market efficiency. Increased funding for fruits and vegetables, renewable fuel sources such as cellulosic ethanol, and environmental preservation—which may distort international markets—will satisfy advocates of domestic agriculture and local farms.

As individual consumers we must ask ourselves whether a similarly balanced personal stance on agricultural policy is logical. Many progressive consumers support campaigns to make international trade benefit developing countries, as well as campaigns to support local produce and farmers markets. But is such a compromise possible? A look at the arguments for trade liberalization and for local agriculture suggests that there are difficult choices between the two.

Liberalize Agricultural Trade Policy, Increase Market Access

The argument in favor of liberalizing U.S. agricultural policy and increasing imports from developing countries is the standard economic argument for free trade first espoused by David Ricardo nearly two hundred years ago: Lower tariffs on agricultural commodities from developing countries will benefit people on both sides of the exchange.

The increased supply of goods resulting from the liberalization of imports will result in lower domestic prices for consumers, just as the added demand in the international market will result in higher prices and more jobs for the producers in developing countries. There is also reason to believe that cheaper and more plentiful agricultural produce in the United States will have spillover benefits for the health of a society plagued by bad eating habits. These gains from agricultural liberalization have long been endorsed by development organizations like Oxfam.

However, this simplistic traditional argument for free trade has been attacked in ways that question the gains for consumers and for producers.

The benefits for developing countries from an increase in exports have been highly scrutinized. Increased market access for developing countries is often criticized for leading to a narrow focus on the production of a small number of crops. Such mono-cropping can lead to unsustainable growth, leaving countries vulnerable to price variability in international markets. According to Achim Steiner, head of the UN Environment Program, Brazil's increased production of sugar in response to the boom in international demand for ethanol has led to further destruction of the rain forest and other environmental degradation.

Similarly, the benefits for U.S. consumers from lower food prices may be exaggerated, especially to the extent that such prices are expected to provide health benefits. It is tempting to assume that lower prices for nutritious foods such as fruits and vegetables would increase their consumption. Though, as Danny Gerber, director of the Philadelphia-based Urban Nutrition Initiative, explains, America's obesity and other food-related problems go deeper than the price of produce. Poor health education and a glut of advertising for unwholesome foods are likely more influential than the price of produce. Cooking a nutritious meal at home is already cheaper than eating fast food, and a marginal reduction in the price of produce would doubtfully make a big difference.

Think Globally, Buy Locally? Support Local Farmers Markets

Although there is no definitive list of reasons to buy locally grown food, most of the arguments can be roughly categorized as aesthetic, nutritional, economic, and environmental, with some overlap.

The aesthetic arguments focus on the personal preferences of consumers. Walking or riding a bike to the local farmers market, meeting the farmers, and hearing about how their produce was grown can be an enjoyable way to spend an afternoon. Parking lots or other blighted urban areas often transform into markets on the weekend and provide a nice change from barren asphalt.

The nutritional arguments focus on the differences between produce that can be eaten the day it is picked and produce that must travel hundreds or thousands of miles just to sit in a grocery store under fluorescent bulbs. According to Sue Baic, a registered dietician with the British Dietetic Association, "The problem with some fruit and vegetables is that the vitamin content is depleted by light, temperature and time… Imported produce can have lower levels of these vitamins, whereas freshly picked fruit and vegetables will contain maximum nutrients." Also, as Capers Community Market of Vancouver explains, "Food that has to be transported long distances is often preserved with waxes, irradiation, gases and synthetic chemicals, such as fungicides and sprout inhibitors."

The economic arguments focus on the need to support the local economy, especially small-scale farmers who find it difficult to compete with corporate agribusiness. Often cited is a study by London's New Economics Foundation that found that "every £10 spent at a local food business is worth £25 for the local area, compared with just £14 when the same amount is spent in a supermarket. That is, a pound (or dollar, peso, or rupee) spent locally generates twice as much income for the local economy."

Advocates of buying local are most concerned with the environmental impact of modern agriculture and transportation. They reason that by reducing 'food miles'—how far your food must be transported—you can reduce environmental damage. Fossil fuels are burned over the long distances that food often travels, releasing the carbon dioxide, sulfur dioxide, particulate matter, and other pollutants that contribute to global climate change, acid rain, smog, and local air pollution.

Does buying local and reducing food miles stand up to technical and ethical scrutiny? These ideas have gained currency, but is food transport the best front line in the fight against carbon emissions? Some recent studies indicate that the small-scale production of local farms, and the small shipments of produce between farm and market, result in less efficient use of energy and an actual increase in oil consumption.

Even if local agricultural production and transportation could decrease energy consumption, it may be an extremely small percentage of U.S. consumption. According to the U.S. Energy Information Administration, total domestic energy consumption was roughly 100,000 trillion BTU in 2000. In comparison, Heller and Keoleian of the Center for Sustainable Systems at the University of Michigan find that 1,390 trillion BTU, or 1.4 percent, are consumed in the transportation of food within the United States. If the energy consumed in transporting food before it reaches the U.S. border is included, approximately 2 percent of total U.S. energy consumption is expended on food transportation.

How Drastic Are the Carbon Emission Reductions Necessary to Stem Climate Change?

The Stern Review on the Economics of Climate Change, published by the United Kingdom in 2006, calculates that avoiding the worst-case scenarios of climate change will require reducing emissions 30 percent by 2020 and 60 percent by 2050. Although such large overall reductions will only be achieved through many small adjustments, these figures raise the question of whether food transportation has received more than its fair share of attention.

Reducing food miles could have some undesirable unintended consequences. Professor Ken Shadlen of the Development Studies Institute at the London School of Economics believes the costs of such an adjustment would fall predominantly on the world's poor. According to Shadlen, "Consumers in wealthy countries can find substitutes for produce imported from developing country farmers; developing country farmers cannot find substitutes for demand from higher-income countries." If supporting local food to decrease oil consumption directly lowers incomes in developing countries, then it appears that such an approach to slowing climate change places the burden of adjustment unjustly on the poor.

Furthermore, the buy local movement's focus on agricultural products does not represent a logical extrapolation of its core argument concerning oil consumption. Why should we decrease imports of agricultural goods but not clothing, steel, and automobiles? The full development of the buy local train of thought appears to be a fairly radical stance against globalization and the world economy, though this is likely a view that only a minority of shoppers support. The drive to reduce emissions in developed countries may be better served by focusing on overall transportation policy, power generation, and building use.

Buy Local When You Can, Import When You Must

Can customers uphold a coherent policy of both buying local and increasing market access for developing countries? Supporters of local farmers markets often voice a common solution to this problem. As a vendor at London's Stoke Newington Farmers Market recently noted, consumers should buy local when they can and import the things that do not grow locally. He suggested buying asparagus from him during the early summer and buying pineapples and oranges from abroad.

The problem with this solution strikes to the core of international economics and the gains from free trade. The theory of comparative advantage dictates that labor-intensive developing countries should specialize in all sorts of agricultural production, not just cultivate absolute advantage with the products that are unsuccessful in colder developed countries. Rich-country consumers switching to domestic substitutes during the summer months limits developing-country exports to the type of primary commodity dependency characteristic of colonialism.

Buy Local If You Can Afford To, Let Others Buy Imported Food

Another common solution focuses on consumer choice and the market price system. Due to the smaller scale and less efficient nature of locally grown produce, the prices at farmers markets are often much higher than their foreign equivalents at the supermarket. Based on this price difference, a wealthy consumer might agree with the idea of importing from developing countries but choose to support local farmers anyway. Because the higher prices at farmers markets will deter most consumers, who buy whatever is cheapest, the wealthy consumer can rest assured that his decision to buy local will not undermine the potential benefits of greater imports from developing countries.

Such a stance is logically similar to a wealthy person carelessly littering in public, knowing that the fine of $50 will deter poorer people from littering and ultimately keep the streets clean. This is not to suggest that buying local is immoral, but rather that it may be difficult to justify buying local if one also agrees that importing from developing countries holds the potential to benefit millions of people. It also highlights the difficulty of establishing an ethical consumer standard that provides a model for others to follow. Does the fact that poorer consumers have fewer options alter our evaluation? Does it boil down to personal preferences versus the poverty of foreign farmers?

Buy What You Want

It may be the case that locally grown and imported produce are not perfect substitutes for one another. The debate thus far rests on the assumption that place of origin is the primary distinction between local and foreign produce, though other factors are significant. As noted above, advocates of local produce champion the culinary, aesthetic, and nutritional benefits of food grown close to home. Can we expect a consumer to forgo her local tomatoes and summer squash in order to purchase foreign produce that she considers less fresh, delicious, or even nutritious, all in the name of international development? In a market economy, the consumer clearly has the right to choose between different products, and if one is deemed superior, for any reason, she is within her rights to buy it.

Perhaps a consumer could recognize the importance of free trade market access for developing countries and advocate such opening in general, but maintain her right to choose local produce for a variety of reasons. She does not actively purchase foreign produce because she finds it to be an imperfect substitute for her local rainbow chard or raspberries.

Our decisions concerning food and agricultural policy are quite complex. As easy as it is to preach about agricultural trade liberalization while buying produce at local farmers markets, such a stance is logically convoluted and rife with ethical questions. Each policy can be criticized for its shortcomings and a personal choice made between the two.

Personally, I have found a balance between the two policies that I find conducive to my lifestyle as a graduate student. I believe wholeheartedly in the arguments for free trade in agricultural goods and would be happy to see the day that more produce is imported from developing countries. However, I also spent last weekend biking through London and visiting three different local farmers markets. My secret? I just enjoy going to the markets, eating the free samples, and buying my produce wherever it's cheapest.

Further Reading: "Weed It and Reap," Michael Pollan, New York Times, November 4, 2007.

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