Course:ECON371/UBCO2009WT1/GROUP4/Article7

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Group 4 - The Environmental Impacts of Agriculture in British Columbia

Article:[1]

Summary:

Jessica Leeder, a global food reporter, explores the assumptions made by consumers about the benefits of buying local. Ms. Leeder writes about the example of fresh local fish compared with frozen fish imported to support the point that the assumption that local is better should be challenged.

Professor Peter Tyedmers, an ecological economist at Dalhousie University argues that the assumptions made by consumers that local food production is better than alternative, non-local foods, requires scrutiny. Dr. Tydemers argues that one should not blindly buy local assuming that there are fewer externalities and the products come with a smaller ecological footprint.

The assumption that Dr Tyedmers encourages us to question is that local food necessarily provide for environmental (climate change) or sustainable benefits.

Professor Peter Tyedmers and his colleagues illustrated this in a recent paper that outlined the gaps in greenhouse-gas emissions that exist between different salmon-producing regions. According to Dr Tyedmers research the following was identified:

- Fresh fish (airfreighted) have a significant larger carbon foot print than fish caught, flash frozen and transported by vessel. (this is a weird argument when used in the context of being compared with local food since we are comparing two different products – fresh and frozen fish. It would be like comparing canned and fresh corn).

- When analyzing salmon-farming in various locations around the world – including British Columbia – the variable that was most significant in quantifying carbon footprint was “modes of catching and preserving salmon”. So fresh (air lifted) fish has a larger ecological footprint than frozen (boat carried) fish.

- The point is made that “organic”feed pellets require higher amounts of energy and therefore, organic salmon are larger contributers to global climate change than non-organic fed fish.

Jamie Kennedy, a Toronto-based chef, argues that there are social benefits to buying local. In conclusion, although it is important to question assumptions, Prof. Tyedmers said he doesn't view the local-food movement as invalid. What are others saying about local foods?

There are a number of articles [1][2][3][4][5][6] that identify the reasons for why consumers should question the assumption that local food is environmentally and economically superior and they include the following issues:

- The externalities of local foods are not considered.

- Buying local campaigns are a form of grass roots protectionism.

- The most efficient product may be resultant from large corporate efficiencies and their reduced costs of production.

- Growing local food may include significant costs that are inefficient.

- Food miles may be greater for local foods due to transportation inefficiencies (partially packed trucks).

- The best way to minimize agriculture-related emissions is to buy food from regions where it grows best.

[1] http://www.econlib.org/library/Columns/y2008/Selicklocal.html [2] http://www.grist.org/article/eatlocal/ [3] http://freakonomics.blogs.nytimes.com/2008/06/09/do-we-really-need-a-few-billion-locavores/ [4] http://www.grist.org/article/economist/ [5] http://www.legis.state.wi.us/LRB/pubs/ttp/ttp-04-2009.html [6] http://www.globalwarmingisreal.com/blog/2009/11/11/buying-local-to-buy-or-not-to-buy/

Analysis:

Local Food Production:

Though many people believe there are significant social benefits to the local production of fresh agricultural products, this is not always the case. The transportation costs are often times higher due to air shipping, sending trucks out half full, etc. It is also often the case in developed nations that wages are drastically larger than in developing nations so the costs to produce agricultural products locally in developed nations would be more expensive. Small local farms also cannot benefit from the economies of scale of large global farms. Another problem with local food production is though while some grow organically, others use environmentally intensive pest control and growing methods.

There are still some considerable benefits to local farm production. Local farms provide a sense of community, culture, and tradition that many consumers may be willing to pay for and get a large benefit from. Local farmland also provides aesthetic qualities and creates jobs for area residents. The fresh goods sold by local farms are often healthier than mass produced and frozen goods sold by large scale farms. This means that fresh local produce can have some positive spin-offs with regards to the economy such as reducing health care costs and increasing labour productivity.

In contrast to the author's opinion, the comparison of fish costs and externalities associated with harvesting and transportation is not a good analogue to the "buy local produce" argument.

One reason for why fish and produce should not be analyzed in the same cost-benefit analysis framework is that fish are a common-pool resource whereas an ear of corn is a private good. Fish are non-excludable (like a public good) but are rivalrous – meaning that a fish, when consumed may not be consumed by another. Common-pool resources are susceptible to Hardin’s (1968) Tragedy of the Commons – over exploitation. In contrast, a carrot grown in the Okanagan by a farmer and a carrot grown by a Chinese farmer are the same private good (excludable and rivalrous).

Large Scale Global Food Production:

The large scale global food production has both benefits and costs. The social benefits of large scale food production include a more stable quantity and quality of food when compared to local food production. In fact, large scale global farms may have lower marginal costs than local food producers due to lower wages and economies of scale. It may also be the case that large scale food producers have lower transportation costs and less of an environmental footprint, which is surprising as local food is generally promoted as being environmentally friendly with lower transportation costs. These foreign producers generally ship their freight by container ship, which is a much less environmentally damaging method than air shipping.

The costs of importing large scale global food products include a potential loss of the tradition and culture as local farms cannot compete with the large farms and leave the market. Also, the large scale global food producers may have a larger environmental impact than local farms depending on how the food is produced. Consumers must remain vigilant to ensure that their food products come from producers that produce and ship with a relatively low environmental footprint.

Government Policy:

Government policies can have enormous impacts on both the economy and the environment. With regards to agriculture, many governments including the Canadian government engage in various policies to help resident farms and often smaller family farm operations. These policies generally include price supports, subsidies, supply management (quotas), intervention purchases, and disaster relief programs depending on the agricultural product. The reasoning of the government is that the programs will help stabilize farm incomes, secure a domestic food supply, provide relief to poorer farmers, and to promote local farming in general. In effect, the government seems to think that local farms have considerable benefits for the environment and the economy and are therefore supporting the nation's agricultural industry. However, these policies are often economically inefficient (they distort the efficient market allocation) and the net benefits of local farming have been questioned.

Some alternative policies that would serve to increase economic and environmental policies could be subsidizing only environmentally friendly farms that practice non-invasive farming techniques, taxing produce from farms that have poor environmental records, or establishing a transferable permit market forcing farmers to acquire and trade permits for non-invasively farmed acres of land. By providing incentives to shift to non-invasive farmland, the government programs would persuade the agricultural industry to stop under producing it. These policies would minimize market distortions and inefficiencies, while encouraging farmers to engage in environmentally conscious methods. Often times large scale global agricultural producers have lower production costs and can ship goods with a relatively small environmental footprint by container ship. If foreign farms could produce the agricultural products at lower costs with less environmental impacts, then the government could decide to not intervene in the market at all in order to maximize social benefits. A potential setback to the last two policies would be political pressure by farmers and the farm industry who would argue that their costs would increase, which in the case of the transferable permits could be partially alleviated by giving away the permits instead of auctioning them off. In any case, the government must try to develop programs that have minimal market distortions and that maximize the net benefits to society.

Prof's Comments

Nice job on balancing the various aspects of this issue. There is nothing wrong with having a preference for local, as it does provide a sense of place, builds community, etc. The questionable aspects are the environmental ones, the economic ones, and the justice ones.