Finally, Proof That Local Foods DO Help Communities

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If the organic and sustainability movements are two prongs in the modern restaurant industry’s triton of virtuosity, the local food movement would be the third.

But with the rise of “local” menu options comes skepticism; critics claim the concept is just fancy branding and doesn’t actually benefit local communities. Well, locavores can now say, “I told you so.” A new study by economists at Pennsylvania State University suggests that when conditions are right, local foods do benefit local economies.

“I’m not a member of a CSA or anything,” economist and self-proclaimed skeptic Stephan Goetz told us. “[But] we were a bit surprised that we had the results we did.” The study Goetz co-authored will appear in the February 2014 issue of Economic Development Quarterly.

His analysis of data (broken down by region) from the United States Census of Agriculture revealed that direct farm sales—sales that took place directly between a local producer and a consumer, without involving a big grocery store—expanded local economies in the Northeast between 2002 and 2007. He’s talking about the beets you bought at your local farmer’s market, yes, but also about the person in Oklahoma who bought a jar of artisanal honey online from a small Maryland producer. (By Goetz’s logic, that honey is a local food because the money stays within the Maryland producer’s community.)

The proof is in the pudding. Between 2002 and 2007 in New England, there was a $5 increase in overall farm sales for every $1 increase in direct farm sales. In the Mid-Atlantic states of Delaware, Maryland, New Jersey, New York and Pennsylvania, overall farm sales increased by $9 for every $1 increase in direct farm sales. The study also found that for every $1 increase in overall agriculture sales, personal incomes rose by 22 cents. That means that every beet sold by a local purveyor made the community a little bit richer.

Those numbers are nothing to scoff at—even though analysis of other U.S. regions didn’t find the same effects. (In fact, direct farm sales correlated with decreased overall agricultural sales in the Southeast.) But Goetz doesn’t think this lessens the significance of his team’s findings.

"I think the conditions aren’t right [in those regions],” Goetz said, noting that the Northeast has several things going for it: high population density, wealthy and educated communities, and a widespread interest in the local food movement.

Goetz also thinks that existing data for the rest of the U.S.may be misleading because the data represents averages for an entire region. For instance, California gets lumped in with lower-density states like Idaho, Montana, and Alaska in the Far West region. Although it’s well-documented that San Francisco is a bastion of locavorism, the dollars it generates are averaged across less densely-populated areas where local food isn’t as popular.

But if, say, census data existed that singled out San Francisco and its surrounding counties, Goetz believes he would find that local foods positively affect the economy. “In fact, I would be surprised if you didn’t observe the effect there,” he stressed.

So why does local food boost overall agricultural sales? Goetz speculates that it could be agritourism, or perhaps a “branding spillover,” meaning that people are beneficially associating an entire region with specific local food products. More study is necessary to know for sure.

For Goetz, the study’s takeaway is clear. “[Local food] is a viable economic strategy.”