The Economics of Food Localisation

Nick Rose

This article first appeared in the Coffs Coast Advocate, 28.5.11

Local food and food sovereignty advocates identify many social and environmental reasons as to why the shift to local food systems is necessary and urgent.

And as I discussed a few weeks ago, this message is increasingly being heard and understood in government and policy circles, if the outcomes of Australia’s first-ever National Sustainable Food Summit are a reliable indicator.

The economic benefits of food localisation are also substantial, but there is little research on this area in Australia. Thankfully, this gap is now being filled by the pioneering work undertaken in the United States by Michael Shuman and his colleagues at BALLE, the Business Alliance for Local Living Economies.

Shuman, who visited Bellingen and Coffs Harbour in 2009 as part of a speaking tour of Australia, recently co-authored a report titled, ‘The 25% Shift: The Benefits of Food Localisation for Northeast Ohio & How to Realize Them.’[1]

As the title suggests, the centrepiece of the report was an economic impact modelling exercise. The authors examined the flow-on effect of all the economic actors – households, restaurants, grocery stores, wholesalers and distributors, and food manufacturers – of the 16 counties of the Northeast Ohio region (population, 4.14 million) increasing by a quarter the percentage of their food needs with produce sourced in the region itself.

This part of the US is economically depressed, with unemployment in excess of 10%, and major centres like Cleveland losing up to half their population since the 1950s, in the wake of the downscaling of the automobile and other heavy manufacturing industries.

At the same time, the local food movement is flourishing, with hundreds of established community gardens and urban farms in Cleveland and its surrounding towns, and dozens of new ones appearing each year; a ‘diversity of agricultural systems’, including ‘robust and cohesive farming communities’ such as the Amish and the Mennonites; innovative models such as farmer-consumer co-operatives; and ‘a rich history of businesses that support [these] farms through local purchasing and investment’.  The authors highlight many examples which reveal ‘the wholesale, restaurant and institutional buying power for local foods’.

So what did the study find? The conclusions were startling, showing that the 25% shift could:

• ‘create 27,664 new jobs’, slashing the unemployment rate by an eighth;
• ‘increase gross regional output by $4.2 billion’ and local and state revenues by $126 million;
• ‘significantly improve air and water quality, lower the region’s carbon footprint, attract tourists, boost local entrepreneurship, and enhance civic pride’; and
• ‘increase the food security of hundreds of thousands of people and reduce near-epidemic levels of obesity and type-II diabetes.’

Given its well-deserved reputation as a pioneer in local food, and given the thousands of dedicated individuals and businesses already working in the sector, one could be forgiven for thinking that the 25% shift would happen just by sheer momentum. But the authors highlight several weaknesses and barriers, including extensive poverty, significant numbers of food deserts, infrastructure gaps in wholesale, distribution and processing, a sceptical public, a lack of financial support for existing initiatives, and supply constraints.

Shuman and his colleagues are not fazed by the challenges, and offer 50 recommendations for how they can be overcome. These include innovative financing initiatives such as ‘revolving loan funds, municipal food bonds and a local stock market’; the creation of local business alliances to ‘facilitate peer learning and joint procurement co-operatives’; and the ‘deployment of a network of food-business incubators and ‘food hubs’ to ‘support a new generation of local food entrepreneurs.

 

This excellent study covers much more ground than I have described here; and anyone with a keen interest in this area should spend some time reading it.