2 May 2016

Is locally produced food better for the environment?

Robin writes:*

Over the last decade or so, 'locavore' movements have been gaining traction. Consumers are showing an increasing interest in locally produced food and are willing to spend extra on it. People buy locally for lots of reasons. Local food is thought to be fresher, more nutritious and better tasting. Consuming it is a way to increase self-reliance in terms of food production and a way to support the local economy and farming communities. Seemingly the most important reason to buy locally produced food is an interest in lowering the environmental impact of food production. This last argument is questionable.

Why? Locally produced food is mostly inefficient. In Economics classes, we are taught that specialisation according to comparative advantage and subsequent trading leads to welfare gains for all parties involved. This principle seems to be especially applicable to agricultural products since their production costs depend on the natural qualities of the environment (e.g. soil quality, rainfall and temperature). Foregoing comparative advantage and economies of scale to localize food production means that more inputs must be used for the same amount of food output.

Steven Sexton estimated [pdf] the environmental effects of a 'pseudo-locavore' system in the US where every state that produces a crop grows only enough for its own population (and thus trades nothing). Each state must also start growing other crops that it previously imported. He finds that for the production of soybeans, for example, land use would increase by 18%, fertiliser use would increase by 55% and fuel use would increase by 34%. This increased demand for inputs that is associated with local food production would possibly increase CO2 emissions and environmental pollution per unit, rather than decrease them.

Local food production might have environmental benefits in that food does not need to be transported as far, but even this is questionable. Weber and Matthews estimate [pdf] that transportation represents only 11% of greenhouse gas emissions associated with food production. 83% of GHGs are actually emitted during the production phase, which, as mentioned, would likely be even more polluting in a locavore system. In fact, the benefits of shifting from red meat and dairy products to chicken, fish or vegetables for just one day a week reduces GHG emissions much more than buying all locally produced food.

Bottom Line: Locally produced food isn't necessarily better for the environment.

* Please comment on these posts from my environmental economics students, to help them with unclear analysis, alternative perspectives, better data, etc.