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The Economics of Local Food

(Ben Woloszyn -- Associated Press)

You feel pretty virtuous when you buy local food. It's fresher, maybe even more nutritious, proponents say. Now advocates are pushing another selling point: Local food strengthens the economy. It keeps money in local communities and helps create jobs, which in turn can help reduce crime.

Wow. And you thought all you were getting was a really good peach.

Sarah DeWeerdt rounds up the facts about local food and economic development in a new, excellent article in World Watch. The money farmers earn goes in large part to buy seeds, animal feed and fertilizers from outside the region. In southeast Minnesota, farmers spend $996 million to grow $912 million worth of crops. Similar patterns are found in Iowa, Arizona and Washington.

Producing local food could change that, DeWeerdt reports. If those people in southeastern Minnesota bought just 15 percent of their food from local sources, it would generate two-thirds as much income as all the region's farmers receive from subsidies.
If the population in and around Seattle bought 20 percent of their food dollars at local businesses, it would inject an extra billion dollars each year into the local economy.

"Every time money changes hands within a community, it boosts the community's overall income and level of economic activity, and fuels the creation of jobs," DeWeerdt explains. "The more times money changes hands within the community before heading elsewhere, the better off the community is. And spending money at a locally based business has a greater multiplier effect, the theory goes, because locally owned businesses are more likely to respend their dollars locally."

The article draws on pioneering work by Ken Meter, president of the Crossroads Research Center in Minneapolis, who has studied the benefits of local food for more than 20 years. The argument, Meter told me, is catching on. It's not only foodies who are interested in local food. It's state and county economic development officers. This is happening even in the Midwest, where production agriculture has long ruled supreme.

Of course, DeWeerdt rightly notes that many of the potential benefits of "shifting food dollars to the local food system are just that: potential." To date, she reports, no community has actually undertaken a sharp enough shift to see if predictions come true. And, it's hard to tell how a change to consumer behavior would affect the larger economy.

Still, government officials appear willing to explore how local food can help bolster rural economies. Last week, Deputy Secretary of Agriculture Kathleen Merrigan sent out a memo that highlighted USDA funds available to help build local food systems. The total amount of money available: up to $1.24 billion.

Good for you. Good for the economy. You have to admit, it makes that local corn or peach or tomato taste just that little bit more delicious.

-- Jane Black

By Jane Black  |  September 8, 2009; 12:00 PM ET
Categories:  Sustainable Food  | Tags: Jane Black, sustainable food  
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Excellent piece, the challenge for the Department of Agriculture and the Administration is to further refine some of the programs cited by Deputy Secretary Merrigan, who is doing a great job in terms of taking a new look at existing programs. She gave a strong speech on this topic in Boston recently at Mayor Menino's conference on food policy and child nutrition reauthorization.

Eventually, I believe that Ag needs an Office of Urban Agriculture and a capital grant program similar to HUD's old "Urban Development Action Grant", call it the "Urban Development through Agriculture Grant", same acronym, different emphasis. Use it to fund greenhouses, cleanup of contaminated sites for farming, public market construction, everything that doesn't fit into current federal programs.

Posted by: KG523 | September 9, 2009 1:43 PM | Report abuse

Will Allen and Mike Hamm in Michigan are both looking at this issue very closely - Will Allen (Growing Power in Milwaukee) recently won a MacArthur award for his urban agriculture work and Mike Hamm (Michigan State University Mott Center for Sustainable Agriculture) is making the economic development case for buying local. Thank you for bringing attention to the opportunity that is local agriculture (and the corn does taste sweeter when picked that morning)!

Posted by: erl1 | September 10, 2009 3:08 PM | Report abuse

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