Why Do People Want Local Food?

That was the question motivating some research ​I conducted with a couple co-authors that is forthcoming in the journal Ecological Economics.  A lot of the previous research in this area had simply interviewed people at farmers markets and asked why local food was desirable.  This sort of approach is problematic for a number of reasons.  For one, people at farmers markets are not a random sample of the population and likely have different preferences and desires than the average consumer.  Another problem: we don't always know why we do what we do even though we're good at making up post hoc stories.  

To address these challenges, we conducted some research with a randomly recruited group of German consumers (located in Bonn Germany) who spend real money to buy real food.  ​Our research strategy was to pick two different kinds of foods for which freshness is related to distance traveled for one but not another.  The idea is that this would let us sort out the extent to which desires for freshness are driving desires for local food.  We picked apples (where distance traveled is related to freshness) and wine (where distance traveled is not related to freshness) and asked how much people were willing to pay (WTP) for different apples and bottles of wine that had traveled different distances.  

Here is our key result:​

These findings imply that ‘a mile is NOT a mile’. The data in Fig. 1 and Fig. 2 indicate that discounts for km traveled (especially in percentage terms) are higher for apples than for wine — a fact that suggests freshness is one driver of demand for ‘local’. In fact, comparing the change in bids across apples and wine suggests that of the total drop in WTP that occurs from moving from 20 to 1000 km, about 28.5% can be attributed to freshness (i.e., (1 − 0.35 / 0.49) ∗ 100 = 28.5%). In the following we will present additional evidence that people perceive freshness to be more related to distance traveled for apples than wine . . .

Big Goverment and Small Potatoes

That was the tentative title of a chapter in my forthcoming book, Food Police, that ultimately wound up on the cutting room floor.  I spent a good portion of the book, and have many posts here on the blog, where I defend Big Food and Big Ag.  That's not because they are blameless or perfect, but because they are so often mischaracterized and are the scapegoats for many of societies perceived evils.  

But, it would be a mistake to think that food freedoms are threatened only by government regulation of Big Food and Ag.  In fact, one can often see the plain injustice at work when you look at the impacts of intrusive government regulations (and the crony capitalism sometimes promulgated by Big Food) on small potatoes - food trucks, farmers markets, and small operators just trying to make a buck.  I chose not to focus heavily on this in the book because they represent such a small part of our overall food economy, but I'm glad to see some attention being devoted to the issue.  

The American Enterprise Institute is hosting a conference title "Big government and big food vs. food trucks, foodies, and farmers markets."  Here's their promo:

If you like your food local, organic, or from a truck, government regulation might be your biggest obstacle. American restaurants lobby to choke off food trucks, and federal regulation of food safety leads to more consolidation in the industry. Moreover, farmers markets struggle to survive under the heavy hand of government.

What if food safety regulation is not about limiting the germs in our dinner, but is rather about limiting competition in America’s food industry? What if federal and local rules actually protect incumbent businesses instead of consumers?

​If you want to whet your appetite, I highly recommend this article from a few weeks back, entitled, Tea Party Libertarians and Small Organic Farmers Make Strange Political Bedfellows.  Here are some spinets:  

Laura Bledsoe didn't set out to join a political movement, she merely wanted to serve what she considered a sustainable meal.

In October 2011 she and her husband Monte decided they wanted to host what they called a "farm to fork" event in their home. They own a small farm 50 miles outside of Las Vegas.

then:​

Trouble began two days before the event was to take place. They received a call from the Southern Nevada Health District Office, who wanted to know if the farmers had secured a health permit for the event. "We didn't know we needed to," Laura says.

Then a health inspector came:​

The health inspector raised several concerns, but chief among them was the meat the Bledsoes were preparing to serve. Because the event was advertised as a "zero mile footprint," the meat hadn't been sent through a USDA processing plant, as is required for any meat purchased at a grocery store or restaurant, so the inspector deemed it illegal to serve.

The article tells several stories of a similar nature - check it out.​

Keep Your Dollars Local. Or Not

One of the bright graduate students in my department alerted me to the graph below - shown on the Keep it Local OK web site (the figure appears to have been taken from this publication).  The figure purports the following.  For every $100 spent at a local business, $73 stays in the economy and $27 leaves.  But, for every $100 spent at a non-local business, $57 leaves the economy.  

Here are my questions:

• Where does the $100 come from?  If $57 is leaving the economy, where do all the dollar bills go?  If I continue getting my paycheck (that's the $100), then trade must balance.  So the dollars leaving have to equal dollars coming in.  Otherwise, Oklahoma is gonna run out of money!  After all, even in the "buy local" world, $27 appears to be continuously leaving!  Oklahoma doesn't have it's own Fed and isn't printing it's own money.  So, what's going on?  The answer is that the $27 doesn't really "leave" - at least for long.  It must come back when trade balances.
• What does "leave the economy" mean?  As I just pointed out, it doesn't really leave if trade balances (as it must - businesses aren't giving out stuff for free).  But, even if it "left" - it doesn't "leave the economy" - it just goes somewhere else – to the larger economy.  And, as much as I hate to admit it, there are also some nice people that live outside Oklahoma.  These people also buy things that "leaves" their economy and eventually find their way back to me.  Otherwise, I wouldn't continue to get a paycheck.
• Are the sizes of the circles drawn accurately?  Right now, the sizes of the pies appear the same.  But, imagine the two circles being two different countries.  Which do you think would be bigger (in terms of GDP)?   So, to make the comparison correct, we need to change the sizes of the pies.  The size of the first "local" pie should be smaller and the size of the second "trade" pie should be much larger.  So “yes” perhaps for every $100 spent, maybe more of that $100 is leaving in the second "trade" pie.  But that’s alright if you’ve got a lot more $100 bills to spend!  

Local Food Nonsense

Last night I went to the fridge to grab a bite of cheese.  We have bought the same brand of tasty cheddar cheese for years, but for some reason I've never before noticed all the labels appearing on the package.  There was one label in particular that caught me by surprise. I took a picture of it and posted it below (sorry for the grainy quality!).  

It says "Keep Local Farms.org."  On the front of the package, I can read that the cheese comes from "farm families in New York & New England."  What is the "local" label supposed to mean?  I haven't the faintest idea.  

I'm sure the dairy farmers in New York are fine people.  But, they certainly aren't local to me.  I bought the cheese at Walmart in Stillwater Oklahoma.  A dairy in Mexico is probably closer to me than one in New York.  Other than the taste of the cheese, it isn't at all clear to my why I should prefer to support the dairy farmers in New York as compared to the ones in California or the ones in Oklahoma or Texas.

When I click to the link advertised on the package, I come to a web site promoting dairies in the New England and New York.  That's all fine and good, but what does it possibly have to do with "local"?  Last time I checked, Oklahoma isn't in New Engand!  Maybe they want me to buy their cheese so they can stay where they are - in their locale - irrespective of where I happen to be.  But, I still don't get it.  Why should I care more about keeping them in their locale than keeping anyone else making cheese in Wisconsin, California, or New Mexico (who presumably don't want to move either) in their locale?        

A likely explanation for this label is that the marketers know most people see the word "local" and conjure up all kinds of positive images without much conscious thought.  Yet, when "local" starts being trumpeted as a national cause or brand, it loses some meaning - because my local isn't your local and vice versa.  By all means, tout the merits of cheese from New York or New England but local has nothing to do with it.    

This little example wouldn't be worth mentioning if it weren't symptomatic of a larger problem of a lack of critical thinking among many of those who religiously promote the buy local movement.   

In Food We (Dis)Trust

This blog post by Chef Michael Formichella describes one of the key outcomes he learned from some focus groups conducted among frequent consumers of grass-fed beef.  He learned that (emphasis his):

There were several notable comments passed by all three groups that I wanted to expound upon. It revolves around trust.

He hit the nail on the head with this one.  Although it is rarely discussed in this way, our modern “food wars” almost all disseminate over the issue of trust.  People (sometimes for good reason) distrust agribusinesses, and as a consequence, the technologies they develop.  This leads to calls for things like organic food – which people then distrust because it turns out that organics are not all they are often touted to be.  Much of the local food movement can, in my opinion, be explained by an effort by some to interact more closely with those they believe are more trustworthy. 

What bothers me about the folks I’ve called the food police or the food elite is that they have fostered, and even encouraged, this atmosphere of distrust to promote their own books, restaurants, and political agendas.  I do not deny that some of the distrust of modern production agriculture is deserved, but as someone who has grown up around “large” farmers and people working in agribusinesses, the caricature that is painted of them cannot withstand close scrutiny.  I strongly suspect that the guys running 5,000 acre farms are no more or less “trustworthy” than the muckraking journalists who vilify them.      

Economists don’t much talk about it, but trust is perhaps the linchpin in the engine of economic growth.  It allows specialization and development of comparative advantage.  It facilitates trade.  It creates environments in which there is some reasonable expectation that success from investments in research and technology will be rewarded.  (There is a really nice podcast between Russ Roberts and David Rose on Econ Talk on this and related issues if you want more).     

So, when I hear and read people implicitly saying “don’t trust any farmer but your local farmer” or “don’t trust anything developed by Monsanto or Cargill or ADM” or “don’t trust the research from Land Grant Universities” or “don’t trust supermarkets,” I take pause. 

You’re setting yourself up for a pretty meager existence if the only person you can trust is yourself.  Locavores are willing to extend that trust to the few people who happen to live in close proximity to them.  But, I’m hoping for more because the more people you can trust, the better your life is going to be.  I happen to believe in the power of firms trying to maintain a reputation, the power of consumers acting with their wallets and feet, the threat of litigation, and sometimes plain self interest tempered by market forces to help foster a climate of trustworthiness.  Clearly, not everyone agrees.  But, what I’d like to see is less inward-looking thinking (i.e., trust only your neighbor) and more thinking on how production agriculture can appear to be (and actually become) more trustworthy.