Tag Archives: environment

Local and organic food is wasteful

The easiest measure of any good’s environmental impact is its price. It is not a perfect measure. Subsidies for the inputs of a product can lower its price below more environmentally friendly alternatives that are not favoured by the government. Taxes, market power, externalities and incomplete information can similarly distort relative prices, as introductory economics courses explain. However, absent additional data, a more expensive good likely requires more resources and causes more environmental damage. Remembering this saves time on debating whether local non-organic is better than non-local organic fair trade, etc.

Local and organic are marketing terms, one suggesting helping local farmers and a lower environmental impact from transport, the other claiming health benefits and a lower environmental impact from fertilizers. Organic food may use less of some category of chemicals, but this must have a tradeoff in lower yield (more land used per unit produced) or greater use of some other input, because its higher price shows more resource use overall. From the (limited) research I have read, there is no difference in the health effects of organic and non-organic food. To measure this difference, a selection bias must be taken into account – the people using organic are more health-conscious, so may be healthier to start with. On the other hand, those buying organic and local may be more manipulable, which has unknown health effects. Local food may use less resources for transport, but its higher price shows it uses more resources in total. One resource is the more expensive labour of rich countries (the people providing this labour consume more, thus have a greater environmental impact).

If one wants to help “local farmers” (usually large agribusinesses, not the family farms their lobbying suggests), one can give them money directly. No need to buy their goods, just make them a bank transfer and then buy whichever product is the least wasteful.

There are economies of scale in farming, so the more efficient large agricultural companies tend to outcompete family farms. The greater efficiency is also more environmentally friendly: more production for the same resources, or the same production with less. Helping the small farms avoid takeover is bad for the environment.

Fair trade and sustainable sourcing may be good things, if the rules for obtaining this classification are reasonable and enforced. But who buying fair trade or sustainable has actually checked what the meaning behind the labels is (the “fine print”), or verified with independent auditors whether the nice-sounding principles are put into practice? When a term is used in marketing, I suspect business as usual behind it.