The Economic Power of Buying Local Foods

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Building Raised Bed gardens

Interest in locally sourced products has spurred the creation of new farms and agricultural businesses in local communities from the mountains to the coast. But if we look beyond each individual farm and business, and view this food system as a whole, could we say that local food benefits the greater community and economy? I would suggest that the benefits are great and far-reaching.

Let’s look at the economic benefits that local food systems bring to local economies. To do this we can look at a concept called the “multiplier effect”. This is the concept that money spent on buying local food is more likely to be re-spent within the local economy. Studies have estimated multiplier effects for money spent on local food to be between $1.32 and $1.90, this means that for every dollar spent buying local foods an additional $0.32 to $0.90 of economic activity take place.

Now, the calculations behind those values are well beyond my economic knowledge but we can look at this concept from another angle. Let’s use tomatoes as an example, two tomatoes have been purchased by a grocery store in Stanly County. One tomato is coming from a farm here in Stanly County and the other being shipped in from a farm in California. Now, let’s suppose each tomato sells for one dollar. The dollar from the Stanly County tomato is used to pay the distributor who then pays the Stanly County Farmer. That Stanly County farmer then goes and pays for seed at the local farm supply store, who pays their employees, who go to a local restaurant for lunch. That restaurant pays a contractor to upgrade their kitchen and so on. That dollar has stayed in the local economy and contributed to further economic activity. The dollar from the California tomato is used to pay the distributor who pays the farmer in California that then spends that money in their own local economy.

Now I know that we can’t keep every penny inside our own communities. but thinking about where our money goes once it leaves our pocket can help us send our hard-earned dollars where we want them to go. If we want to broaden our view of local, then we need to look beyond the county and look at our State as a whole. Did you know that collectively North Carolina residents spend 35 billion dollars a year on food? If each person spent 10% of those food dollars (about $1.05 per day) on local products there would be 3.5 billion dollars available in our state economy. When you add it all up, that equals a lot of money staying right here in North Carolina.

So how do we shop local and keep our food dollars close by? Here are some tips to get you started. Go to your local farmer’s markets. This is a great way to meet the farmers in the surrounding area and learn about the products they produce. Some farmers offer a CSA (community supported agriculture) where a customer prepays for a share of what the farmer produces. Usually, CSAs run for a certain number of weeks and have a weekly pickup for the customer. Restaurants that buy locally-grown products provide great opportunities to experience the fresh and diverse selections of crops and meats in the area, as well as specialty products like honey or mushrooms. Agritourism is another great way to find local products in your community. Examples of agritourism could be wineries or pick-your-own operations where you can go to enjoy the unique character these farms add to the landscape and culture of North Carolina. So, go explore your local food system and the next time you purchase a locally-grown product you can feel confident that your purchase has made a difference in your community.