Summer, 2010

Cover & Feature Stories

Local Versus Global

 When the G-20 summit convened in Pittsburgh, Pennsylvania, last year, America’s First Lady, Michelle Obama entertained the spouses of the world leaders who had gathered for the event. The Associated Press highlighted the event, proclaiming in its headline: “Michelle Obama Debuts as International Hostess.”

The way she elected to debut was highlighted in the first paragraph of the story: “First lady Michelle Obama was sharing her passion for eating fresh, healthy and locally grown food with the spouses of world leaders at a dinner Thursday on a working farm.”

At the White House, the Obama’s started a garden at the urging of well known Chef Alice Waters, who spent months lobbying the Obama’s to emphasize fresh, locally grown food. Michelle Obama has made clear her opinions on the taste of food. At the harvest party she hosted for local children in the District of Columbia, she declared: “Well, I’ve learned that if [food is] fresh and grown locally, it’s probably going to taste better.” In fact, on a recent vacation in Martha’s Vineyard, Massachusetts, the White House let it be known that the meals served at the rented compound the Obama’s stayed at were chock full of locally grown produce.

Of course, the First Lady is not the inventor of the enthusiasm for local. There is a cultural tilt to local that feeds off everything from protectionism to the notion that local purchasing can help reduce carbon output, and thus, help avoid global warming. The basic notion is that locally grown and locally produced foods are tastier, better for the environment, help local workers and are more healthful.

Now all these claims are quite questionable: Although certain fruits may be tastier if picked at their prime and not shipped long distances, on many locally produced items, it makes no difference, and there is no assurance that something local is also riper. Besides which, if one wants to taste the item year-round, one has little choice but to bring it from other climatic zones.

Whether local is better for the environment is variable. Commercial transportation is exceedingly efficient, so it is often the case that the transportation variable doesn’t make a difference — indeed, if consumers drive their Range Rovers 15 minutes out of the way to get to a Farmer’s Market so they can buy a pound of produce, they probably caused more emissions than the shipping of the product across the ocean. Because the production of food has different environmental impacts depending on location — compare lamb grazed outdoors on land watered by nature, as in New Zealand, versus lamb raised on feed produced by tractors, as in the UK — only a complete lifecycle analysis can say whether any given product is better for the environment than any other product.

Economically speaking, the beneficiaries of a “buy local” policy are clear — the producers of the products being procured. Whether this is good even within the locality is unclear. First, by constraining their supply chain and insisting on buying products only within a certain local region, the buyers of such local products will likely pay more than they would have otherwise. So there is a loss of community spending-power, and that makes everyone poorer. In addition, resources such as land, water and people that could have been used for other purposes are now needed to produce the food. This may not be a win for the community. Also, there is a question of retaliation. If a community creates rules that prohibit certain imports — from the next county, state or another country — those venues may well retaliate with severe costs to local producers.

Finally, there is just no evidence that locally produced food is “more healthful” than food from other places.

Facts be what they may, the zeitgeist is screaming local, and the question is where that leads international trade of foods. Indeed, it is rather odd to hear Michelle Obama waxing lyrical over local, since U.S. agricultural exports are crucial to the U.S. economy. How are traders to address the local issue?

One of the best responses came from Tom Reardon, a well-respected professor at Michigan State University. This issue was being discussed on a well known digital newsletter that I write and edit, called Jim Prevor’s Perishable Pundit, and you can read the Web site or get a free subscription at www.PerishablePundit. com. Professor Reardon, who works extensively in Asia, responded to a specific piece I wrote about local with a thoughtful letter, reproduced here in full:

Jim, At dawn here in Beijing I wanted to send some additional and/or confirming thoughts.

First, let’s face it, the Chinese, the French and the Italians (and I can add the Mexicans and Indians, and have actually listed what foodies often list as the great original cuisines) are the greatest food cultures on earth, with the greatest variety, taste, refinement, obsession with freshness, the history of each dish, mania for regional specialties.

I have found that the average Chinese, Italian or French person I know talks, thinks and knows as much about produce as the “industry practitioners and experts” as one finds in Produce Marketing Association meetings and so on. (I love PMA , so I am not showing direspect to the organization; I am just stating the obvious for anyone who spends time in the great food culture countries.) I think that these countries “have it right” in terms of local foods — they think “Food Regions.”

At any time, in my offices in China or India, or the university where I spend time in France, I can just grab anyone... secretary, professional, local baker, trucker... anyone... and I can ask, “What’s in season and where is it from?” Anyone... anyone... will tell me in enthusiastic, vivid and voluminous detail about what peaches or mangos are “coming in” (please remember the phrase... “coming in”) from what region.

They can describe exactly when they start “coming in,” and when they “are over” and aren’t worth a word or a chew. In my office in Beijing the other day, I watched everyone (not “food experts!”) crowd around a table at a work break; we were all cutting up, shouting, laughing. They were obsessing about ... Thai mangosteen (we had a few open and the crowd was digging into them with a kind of food insanity), peaches from Xianjin (these will give my home state California a run for their money...), melons from a local province (only 200 miles away), and an apple from the United States.

They liked these things and paid their lower incomes for them because they think they have good taste. They celebrated the regions they are from. They did not say, “Oh, I am sorry, I only eat things grown 100 miles around Beijing! If and only if the best version of that kind of produce were grown that close to Beijing would they eat it, unless it is just some commodity product that anyone can grow anywhere about the same, unless they mess it up.

I have seen the same scene in offices and homes in France, Italy, India (for fruit and certain vegetables) and obviously Mexico. As usual, France, I think, is leading the way in marrying the modern food system with this traditional food love and culture of “food regions.” They have programs (one governmental, one of the private sector), one of which is called “Reflets de France,” or “Reflections of France.” They sell each region’s specialties (of many foods) ... all over France.

So a “consumer” in Bordeaux will go to the supermarket and pick up, savor, love, discuss, celebrate, the specialties of departments in the South, North, East, and West. (It is never “local -vs.-non-local” that dominates their choices, or I have never seen this... it is the taste, the season, the tradition of specialty, and if the locality is producing something good, they just pull it into the general set of things they love.)

These same persons will ooh and ahhh over an orange from Israel, a mango from India, and berries from Serbia. If and only if their local producers can produce the best option for taste (for things with taste differentials), they will buy it. They will eye it, sniff it, touch it, figure it out. Typically they will already know what things the local folks can do well, and when, and just then judge among the local producers, assuming that anyone worth his/her salt will do well the local traditional thing, or if they introduce a new thing, they will have the common sense to make sure that it upholds the same quality tradition as the other things made.

But, of course, these same consumers will pick over bargains for produce and other foods that they are not looking for particular flavor or differentiation in, and if they are poor or lower-middle or even middle class, those things may be most of what they buy. So they will combine looking for cheap commodities, and looking for the “regional home runs” ... whatever region, inside or outside France, that they can find. I see the same behavior in China, the same in India, Mexico and Italy.

In my personal life, I try to follow the food ideas of these people, as I think that they know... a lot more than I do about food. I go to the local farmer’s market when I can because I know there are some local things around my Michigan area and San Diego area that folks there do well, and when they do it, and little by little, I learn who can do it.

Second, it seems to me that the mix we now see of “globalization” (just another way of saying what Jim said — the development first of national rather than local, then international rather than only national, markets with great variety of foreign produce and other products to choose from) and the “buy local movement” are inevitable partners, neither will go away, and neither will beat out the other for the next 10-20 years — and then the “markets” side will (again, as it already did once.. in the 1950s/1960s) win. For several reasons I note below:

1. Consumers and producers love the growth of national and international markets — the formation of national, and then the development of international markets — for everything, and produce is part of that. When I asked one famous berry grower in Michigan about the buy local movement, he said, “Well Tom, I can’t sell a lot of berries within 100 miles of my operation.”

I am sure that anyone who is competitive (on quality or cost or both) and has a shippable product would say that. Producers want big markets! They want free markets, not quotas, tariffs, blockages and constraints; they want the right to compete for their apples to get in and duke it out in Beijing with Chinese apples, their grapes and cherries to be sold in Japan, their oranges to sit on French supermarket shelves.

Having little local markets means that the producer cannot get scale, return on her investment, and become more and more competitive to expand her market and grow. This is, of course, obvious. Consumers also want big markets. They want choice. They want to save money; they want to find the best product. They want things in season, wherever that product is coming from. They want to buy from the most competitive (in quality, or cost, or both) producers... from anywhere. That is why a local major retailer in Michigan told my class that the country of origin label had nearly no effect on his sales; he noted that, by far, the regular consumer does not even register any of that. They want quality, or price, or both, and assume the supermarket chain has the sense to screen product to make sure they buy safe.

2. Consumers and producers love the growth of local markets — for the things that local suppliers can produce with quality and/or good price. I obsessively buy Michigan peaches and tomatoes in season, and go into a kind of juice-covered trance eating them by the bushel. These peaches are like the ones I ate as a boy in California. We all want that. Few consumers really want to eat “pink baseballs” (my term since a kid for the tomatoes found in most supermarkets at least until the recent trend toward slightly better tomatoes).

Consumers love to be able to “connect” with farmers and the “land” through at least thinking that “Hey, this is produced by the local folks, I feel part of their community; this is not some ‘big farm to big box’ cage I am confined to...” and so on. This love and yearning for the local will only grow and grow as several things happen: (a) for defensive reasons, as it slowly dawns on us that “foreigners” are doing things more and more with the same or better quality but lower cost, and we panic and hug our local produce to reassure that we are still somehow more important and better than the “foreigners” are; (b) for proactive reasons, as the local produce becomes better or cheaper or more available as local producers, such as in delicate greens, scale up, and hopefully have a big enough market to make enough money to make the needed investments in food safety!

Third, however, it seems to me that over time the “buy local” movement will simply wither on the vine. Not that I want it to (this letter is odd because when I am in any place, including Michigan or China, I obsessively buy the local specialties, frequent farmers markets, etc.) ... but ... modern packaging and shipping methods are ... more and more... making it possible to keep a product, even a delicate one, fresh even if shipped, and allow harvesting when the product is ripe.

Greenhouse technology is constantly improving. My usual dinner in East Lansing is Indiana chicken, cooked in California Meyer lemons, with a salad of Mexican tomatoes and organic arugula from a massive organic farm in California, and Hawaiian or Brazilian papaya or Michigan or Chilean berries for dessert. I was amazed a few years ago when I could get the delicate — and I thought unshippable — Meyer lemons, arugula, and papayas, and a few years later, I think of that as commonplace. The local operations, in other places, became more and more competitive, and the shipping technology better and better, so that their local became my meal. 

As these technologies develop, the local producers will lose any “automatic advantage” in the local market. In fact, of course (as this is already happening), the competitive producers of delicate fresh produce will be promoting the development of better packaging and shipping, so they can grow their market beyond the local. That is exactly the story of the Michigan berry producers, or the Chileans. I think those competitive companies would find the “buy local” movement in fact a way to torpedo the development of competitiveness in their industry... just like subsidizing soybean production etc.

Subsidize the producer (that is what the “buy local” movement boils down to), and, of course, the producer gets some short-term gains, but as usual, because thus protected from competition, does not invest enough, stay safe enough, keep quality in mind, thinks she has a captive local consumer, and then lets quality decline or costs creep up. The local consumers, of course, eventually tire of that, and they embrace non-local product, and the local guy is wiped out. Is this not a story we hear over and over and over, not just in agriculture?

So I think that what will happen is that the “buy local” movement will be caught from two sides in a pincer — the formerly non-shippable (ripe fruit, delicate greens, etc.) products will become increasingly cheap and shippable and undermine the advantage of any firm hoping to be protected from competition by the transport barrier — and the local firms that are producing products that were by nature supposedly local (like organic arugula! Usually cited a decade ago as the super duper local-only product!) will compete with each other and a handful per region and product will emerge victorious, maybe surrounded by a cluster of smaller firms serving niches (that add up to say 10 percent of the main market for the product).

This seems to me to be exactly what has happened in organic greens in the U.S.... Then these local strong firms will use the increasing shipment and packaging technology to ship all around (and will fight to keep markets free and open) — and/or they will pepper the cities of the U.S. and other places with roboticized greenhouses that reproduce their product and ship it locally by special train compartments in the elevated trains that will replace freeways...  

— Tom Reardon

Professor, International Development and Agribusiness/Food Industry

Department of Agricultural, Food and Resource/Economics

Michigan State University

East Lansing, Michigan

Professor Reardon reminds us what would be lost in the joy of life if we constrained ourselves to only eat local, and he reminds us that protectionism — and that is, in fact, what local mandates turn out to be — will in the end hurt the very local producers that those who advocate for hope to protect.

In the end, the true sustainability of a farm, or food producer, depends on the ability to compete — to compete on flavor, to compete on price, to compete on consistency, to compete on food safety and so many other criteria.

Industries sheltered from competition become weak, and so traders can proudly proclaim that they bring delicious and nutritious food to the people of the world and they help growers and producers in every corner of the globe to rise to compete with the best. It is a noble task, and the traders of the world should hold their heads high.  EXP