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The Locavore's Dilemma: Local Food, Continued

Mises Daily: Monday, August 18, 2008 by

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I have received a lot of interesting and useful comments on my recent article about local foods, and I would like to take this opportunity to clarify a few things and continue the conversation. If locally grown produce tastes better, and if one prefers to know where one's food is produced, then eating locally is a great idea. If one's goal is to have a smaller carbon footprint — to say nothing of whether having a smaller carbon footprint is desirable per se — I'm not convinced that eating locally is the way to go.

In my last article I mentioned our experience and experiments with home-grown tomatoes. Our tomato harvest has been more bountiful this year in part because we planted in a sunnier part of the yard, but it is also clear that homegrown or locally grown tomatoes are much tastier than conventional store-bought tomatoes. This is in part a regulatory problem, though, and not a product of the unfettered private marketplace. The case of the UglyRipe tomato in Florida several years ago demonstrates this. As Gary Galles noted at the time, Florida tomato grower Joe Procacci came up with a tomato that tasted great and could be produced economically. After intervention by the Florida Tomato Commission, however, Procacci was barred from selling his tomatoes to willing buyers.

Government regulations and subsidies, not the free market, give us lousy tomatoes. Allowing freer trade (and therefore, lower prices) for tomatoes would free up time and resources for other pursuits. I wonder: are we missing out on the next Einstein, the next Rembrandt, or the next Mozart because they are too busy scratching the ground to produce decent-tasting tomatoes? This is hardly a trivial consideration because our time is valuable. In his review of Michael Pollan's The Omnivore's Dilemma, Tyler Cowen notes correctly that "[t]here are plenty of 'cheap' ways to procure food if we do not measure our time and trouble as relevant costs."[1]

Shipping food from one coast to the other does generate negative externalities, which are costs associated with transactions that will not be reflected in the final price. However, the existence of an externality does not necessarily justify government action. Nor, for that matter, is it sufficient to know the size of the externality. In an article forthcoming in Regulation magazine, John V.C. Nye (who was my advisor in graduate school) argues that the relevant question with respect to fuel taxes and carbon policies concerns whether there are conditions under which people can bargain toward the efficient outcome.[2] The local food movement is part of this bargaining process, but it is important to note that existing policies and taxes also mitigate the externalities associated with long-range food shipping. Nye cites studies that suggest that the maximum externality associated with gas consumption was $1.00 per gallon, including the sixty cents or so per gallon in taxes people were already paying. What is more, the studies Nye cites were conducted when gas prices were about half of what they are today. Furthermore, Nye also notes that the interaction between different markets means that the optimal externality-internalizing tax in general equilibrium is lower than it would be in partial equilibrium. At the end of the day, further interventions to reduce carbon emissions are likely to be welfare reducing.

Even in the absence of the considerations discussed by Nye, recent research suggests that the contributions to atmospheric carbon dioxide from transporting food are very small relative to the carbon dioxide produced by cultivating meat. Last month, I posted the abstract for a paper by Christopher L. Weber and H. Scott Matthews on www.divisionoflabour.com; here is the abstract in its entirety:

Despite significant recent public concern and media attention to the environmental impacts of food, few studies in the United States have systematically compared the life-cycle greenhouse gas (GHG) emissions associated with food production against long-distance distribution, aka "food-miles." We find that although food is transported long distances in general (1640 km delivery and 6760 km life-cycle supply chain on average) the GHG emissions associated with food are dominated by the production phase, contributing 83% of the average U.S. household's 8.1 t CO2e/yr footprint for food consumption. Transportation as a whole represents only 11% of life-cycle GHG emissions, and final delivery from producer to retail contributes only 4%. Different food groups exhibit a large range in GHG-intensity; on average, red meat is around 150% more GHG-intensive than chicken or fish. Thus, we suggest that dietary shift can be a more effective means of lowering an average household's food-related climate footprint than "buying local." Shifting less than one day per week's worth of calories from red meat and dairy products to chicken, fish, eggs, or a vegetable-based diet achieves more GHG reduction than buying all locally sourced food.

For purposes of reducing greenhouse gas emissions, reducing "food miles" is relatively ineffective whereas eating less meat (particularly less red meat) and more vegetables would be more effective. In general, the environmental benefits of substituting plants for meat are considerable while the environmental benefits of substituting local vegetables for global vegetables are likely to be negligible. The concerned activist may also wish to look for another libertarian/capitalist solution to these environmental problems by examining government land-use policies in some places, particularly in South America, which contribute to deforestation and implicitly subsidize the production of greenhouse-gas emitting cattle.[3] The low price of greenhouse-gas producing meats here is a consequence of bad agricultural policies.

One commenter suggested that information is a good reason to buy local. Indeed, he is correct that this is a valuable consideration. It isn't clear to me a priori that local farmers will be that much better at economizing on information than their larger counterparts, but at the very least you know who to talk to (and who to sue) if you get salmonella from locally produced tomatoes.

There are some good reasons to buy local (quality, information, etc.), but I'm not convinced that buying local meaningfully reduces one's carbon footprint.[4] It's true that transporting foods pollutes the air and spills toxins in some places, but a focus on transportation-related pollution only does part of the accounting. If we're going to grow oranges locally, this will require more tools, labor, and land than it would take to grow the oranges in California and ship them to Memphis. Thus, we're saving the environmental damage from transportation but we're making up for it in several ways. First, we're using more land.

Second, we might need more equipment (tractors, shovels, whatever you need to grow oranges) the production of which uses fossil fuels and creates pollution. These are also going to have to be produced and shipped. Third, we'll probably have to use more fertilizer, which requires energy to produce and which is likely to create more agricultural runoff. Finally, it isn't immediately clear that farmers using pickup trucks to bring their wares from the countryside to an urban farmers' market would be less energy-intensive than trucking the same quantity of produce from California to Memphis. It doesn't have to be oranges; you could just as easily say "food" and the analysis would still apply. It is true that buying locally might reduce the amount of fertilizer, etc. used per acre, but it could also lead to bringing more acres under cultivation. Even in an agricultural marketplace that is distorted by government intervention, intensive farming that economizes on land use is a benefit, not a cost.

Economists define a "normal good" as anything we consume more of as our incomes increase. Food quality is a normal good like environmental quality. As people get richer, we demand more of it. Early this decade, the Atkins diet created a craze for "low-carb" foods; today, people are doing a new kind of carb counting. Instead of counting carbohydrates, however, we are counting carbon dioxide emissions. I wholeheartedly agree that there are a lot of complex environmental problems out there, and food policy in the developed world is a complex mess of interventions, regulations, subsidies, and distortions, so much so that I've heard Americans referred to as "walking corn chips" because of the ways government policy distorts the food supply chain in favor of corn and corn derivatives.

While there are many compelling reasons to buy local, I remain unconvinced that buying local is as environmentally friendly as it is alleged to be.

Notes

[1] Incidentally, here's an interesting talk by Pollan at TED.com.

[2] I expect that Walter Block might disagree with me on this; if so, I look forward to his comments and criticisms.

[3] Food writer Mark Bittman offers a fascinating and informative talk about some of these issues at TED.com.

[4] This paragraph is taken from email correspondence with someone who commented on my last article.