The Economics of Local Food
”It is a maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy.” - The Wealth of Nations
This is tied to the concept of comparative advantage and gains from specialization and trade, which lead to an increase in the size of the ‘economic pie’ which can be used to make everyone better off. Modern food supply chains, made possible by companies such as Cargill, ADM, and retailers like Wal-Mart, have helped to reduce our impact on the environment.
The Inefficiency of Local Food
Forsaking comparative advantage in agriculture by localizing means it will take more inputs to grow a given quantity of food, including more land and more chemicals—all of which come at a cost of carbon emissions.....In order to maintain current output levels for 40 major field crops and vegetables, a locavore-like production system would require an additional 60 million acres of cropland, 2.7 million tons more fertilizer, and 50 million pounds more chemicals. The land-use changes and increases in demand for carbon-intensive inputs would have profound impacts on the carbon footprint of our food, destroy habitat and worsen environmental pollution.
It’s not even clear local production reduces carbon emissions from transportation. The Harvard economist Ed Glaeser estimates that carbon emissions from transportation don’t decline in a locavore future because local farms reduce population density as potential homes are displaced by community gardens. Less-dense cities mean more driving and more carbon emissions. Transportation only accounts for 11 percent of the carbon embodied in food anyway, according to a 2008 study by researchers at Carnegie Mellon; 83 percent comes from production.
The locavore’s dilemma
Urban farms do more harm than good to the environment
Edward L. Glaeser
Berkeley graduate student Steven Sexton estimates that an American switch to more local corn production would require 35 percent more fertilizer and 22.8 percent more energy....But the most important environmental cost of metropolitan agriculture is that lower density levels mean more driving. Today, about 250 million Americans live on the 60 million acres of this country that are urban — which is about four people per acre....If halving densities also doubled distance to the metropolitan area center, this would add an extra 44 gallons of gas annually. Together, the increased gas consumption from moving less than a tenth of agricultural farmland into metropolitan areas would generate an extra 1.77 tons of carbon dioxide per year, which is 1.77 times the greenhouse gases produced by all food transportation and almost four and a half times the carbon emissions associated with food delivery.
Food miles, Kowalski's and that steak on your plate
"That steak you bought at the farmers' market from the family operation down the road might have taken more fuel to get to you than the rib-eye from a steer slaughtered in Kansas."
Read the article here.
The actual research is here.
Comparing the Structure, Size, and Performance of Local and Mainstream Food
"Transportation fuel use is more closely related to supply chain structure and size than to the distance food products travel. Products in local supply chains travel fewer miles from farms to consumers, but fuel use per unit of product in local chains can be greater than in the corresponding mainstream chains. In these cases, greater fuel efficiency per unit of product is achieved with larger loads and logistical efficiencies that outweigh longer distances."
From Marginal Revolution: Food Miles
"How far your food travels matters a lot less than what kind of food it is, or how it was produced. According to a recent study out of Carnegie Mellon University, the distance traveled by the average American’s dinner rose about 25 percent from 1997 to 2004, due to increasing global trade. But carbon emissions from food transport saw only a 5 percent bump, thanks to the efficiencies of vast cargo container ships. Should we minimize our “music miles” and boycott bands on tour?"
Eating Local and Climate Change link from National Geographic ("Eating Local" Has Little Effect on Warming, Study Says. Mason Inman National Geographic News April 22, 2008)
"Being a "locavore" and eating foods grown near where you live may not help the environment as much as you might think, according a new study.When it comes to global warming, focusing simply on where food comes from will make only a small difference, the study's authors say."
Cited research: Environ. Sci. Technol. 2008, 42, 3508–3513
See also this entry from the EconLog blog:
The Locavore's Dilemma: Why Pineapples Shouldn't Be Grown in North Dakota
In this post four arguments related to local food are discussed:
1: Buying Local Foods is Good for the Local Economy
2: Buying Local Foods Is Good for the Environment
3: Local is Fresher and Tastier
4: Local Food is Healthier and Should be Served in School
The authors conclude:
"Economists are a diverse bunch, but we have a few core principles, two of which are that there is a balance of payments and that there are gains from trade. These universal principles are as timeless as the law of gravity. If politicians and activists proposed to suspend belief in gravity, physicists would not cower. They would resolutely defend reality. So should we."
Also, find this Cato book forum with Pierre Desrochers (also a Mercatus Institute Fellow), co-author of The Locavore’s Dilemma: In Praise of the 10,000-Mile Diet.