Food Miles Book Club: Economic Benefits and the Food Dollar

Welcome to the Economics chapter of the Food Miles book club. If you’re new to this discussion, check out the introductory post, the  Self Reliance chapter, and the Transportation and Energy chapter.

Here’s a quick summary of each of the Economics chapter (full report available here):

~~~~

One of the key reasons for choosing to buy locally-produced food rather than imported food is to foster economically viable farming businesses and farming communities in Nova Scotia.

Consider the following:

  • Direct annual farm spending was $460 million (in farm operating expenses) in 2008
  • Total annual employment from direct, indirect and induced employment from farming activity is 10,281 full time equivalent jobs (2004 estimate)
  • Total annual contribution to GDP (direct, indirect and induced) is $400 million (2004 estimate)

Nova Scotia is presently losing farms, along with the interwoven businesses that supply their inputs or process and distribute their products. Farm communities are unraveling. To keep the farms we have, encourage new farmers, and prevent the bleeding out of businesses that make up a local food system, a move to support local farms via our food dollar couldn’t come fast enough.

Even though Nova Scotia farmers are producing more product each year, their average total net income is going down, as is their share of the food dollar. These trends clearly show that to have farms in this province, food needs to be purchased in a way that ensures farmers can recoup their costs of production. If our farms disappear, we won’t have the option to buy local food, which leads to higher prices for imported food, as well as a loss of food sovereignty.

One of the reasons imported food is considered to be attractive, is because it is assumed to be cheaper than locally-produced food. This is not universally true. First of all, there are costs that are not reflected in the price of imported foods. Also, having a local food system gives customers the option to buy directly from producers at a reduced price, and gives producers the option to reclaim some of the margins normally charged by retailers and wholesalers. This arrangement can be beneficial for both customer and producer. The type of food, degree of processing, convenience, and vendor usually has more effect on price than whether it is local or not. Another thing to consider is whether the price of food, whether imported or local, is too low. Farmers are often not covering the production costs for the food they produce, and the proportion of our income spent on food is going down. Most of us could stand to pay a little more for food items so that farmers can make a living. Consider the average proportion of household expenditures spent on food. In 1969, Canadians spent an average of 19% of household expenditures on food, and now we spend an average of 10%. We spend a lower proportion of total household expenditure on food than people in many other countries, including the USA and Australia.

Questions for discussion:
How can we help ensure that farmers make a fair wage?
How can will help foster a strong agricultural sector for Nova Scotia?

Advertisements

One thought on “Food Miles Book Club: Economic Benefits and the Food Dollar

  1. Pingback: Food Miles Book Club: Social Benefits and the Food Community « Adventures in Local Food

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s