We’ve written many pieces about the “local” phenomenon. So when PMA’s Annual Foodservice Conference focused on this matter, we wrote a piece titled, Everyone Is In Favor of Better Flavor But Is ‘Local’ A Solution Or An Ideology?
That brought a lengthy letter from a noted academic that we published under the title, Tom Reardon of Michigan State University Speaks Out: Wither Local.
Now we are pleased to publish a letter from two distinguished UC Davis faculty members who moderated the original panel discussion at PMA’s Foodservice Conference:
Mr. Prevor must have gotten an “A” in his microeconomics class since he clearly articulated the conventional theories of economics, including that of comparative advantage. Comparative advantage, however, supposes that markets already exist. The topic that this year’s Produce Marketing Association bravely tackled was the emergence of new markets to respond to a burgeoning consumer demand for more local, sustainable and flavorful food.
As the opening speakers admitted, the industry has focused on appearance for many years; now, some industry members are beginning to examine what it would take to produce and distribute food with flavor and “the face of the farmer.” In his column, Mr. Prevor noted that some flavorful crop varieties have been eliminated in favor of those with better appearance, larger size, and/or longer shelf-life/shipping quality. Yet, demand for local, sustainable and flavorful food is growing.
Data from the USDA’s 2007 Census of Agriculture indicate that the dollar value of agricultural products marketed directly by US farmers to consumers increased by 49% between 2002 and 2007 to $1.2 billion. Much of this growth was attributable to sales at farmers markets. Many consumers are willing to trade off perfect appearance and shelf-life, as well as low prices, in order to have more flavorful produce provided by foodservice operations (and well as grocers). Providing these new, local products to consumers will require new (or renewed) infrastructure, new knowledge and training about maintaining food quality from farm to fork, as Tina Fitzgerald remarked. It will also take some investment from the industry, which will require some time to build up.
Some innovators are already on the cutting edge. They exist from coast to coast. Given that the PMA conference was in California, it made sense for us to select speakers from nearby. However, we met others who are working with small and mid-scale family farmers to supply locally grown produce.
The California-based supply chain represented at the PMA panel was one example of an emerging trend. UC Davis Dining Services is taking seriously the University-wide goal of “reducing the environmental impact of food purchases and dining operations while maintaining accessibility and affordability for all students.” It is, therefore, documenting its efforts to meet the University of California’s goal of having its food service programs procure 20% sustainable food products by the year 2020.
A complete definition of what that means at UC Davis is available at: ‘http://www.universityofcalifornia.edu/sustainability/
documents/policy_sustain_prac.pdf’Yes, “sustainable” and “local” still need more specificity in many places. Metrics may be useful, as well, as one gentleman in the back of the room suggested (the same one who asked us “why local?”). We agree and would welcome your ideas. As for UC Davis Dining Services and the other firms in their supply chain, the courage to listen to the consumer demand for more sustainable choices is admirable.
We commend the PMA for bringing this topic to the forefront of its conference and talking about how the industry can offer more choices, including “local.” This is, in fact, what offering “local” and “sustainable” products is all about. It is not about narrowing our options like Mr. Prevor seems to believe.
Consumer demand for a wide range of healthful, flavorful produce, including local, and the willingness of the industry to respond, can keep this new market working and growing for everyone. Furthermore, expanding offerings of locally grown produce can support, rather than undermine, the PMA’s Foodservice 2020 Initiative with its goal to double the use of fresh produce in foodservice by 2020.
— Shermain Hardesty
Extension Economist and Lecturer
Department of Agricultural and Resource Economics
University of California, Davis— Gail Feenstra
Food Systems Coordinator
Sustainable Agriculture Research & Education Program “SAREP”
University of California, Davis
We greatly appreciate that Dr. Hardesty and Dr. Feenstra took time to write. This is an important issue for the industry, and their expertise can doubtless enlighten us all. Yet we confess to being confused when reading the argument laid out in the way it is in this letter.
The first thing we note is that the letter conflates three different things without explanation. We are told that consumers want things that are local, things that are sustainable and things that are flavorful.
Even accepting that this is all true, it is not clear why we should assume these things will always travel together. When it comes to flavor, isn’t it at least as logical to think that the most flavorful items will come from the peak of the season — wherever that might be in the world — at any given time? When it comes to sustainability — whatever definition one wants to use — does it make any sense to think that the most sustainable choice will always be within 50 miles of a particular institution?
Our critique of the UC Davis/Sodexo procurement, with its elaborate five-tier procurement preference was, specifically, that these tiers were not justified by any particular criteria. As we wrote:
Item after item was asserted as if it was somehow self-evident why one would think the way the panelists thought. Linda Adams, for example, laid out a complicated five-tier program of preferences, whereby UC Davis preferred to buy within a radius of 50 miles, then 100 miles, then 250 miles, then California, then USA — without ever pausing to explain by what criteria it had been established that it was a good idea to lay off poor Mexican field workers in Baja so we could truck produce across the continent.
In other words, if UC Davis said it wished to procure only fruit with a high brix content because that corresponds to flavor and, if it turned out that only fruit grown within 50 miles of the UC Davis campus met this flavor standard, then, of course, it would be reasonable for UC Davis to procure this local produce. This is, however, pure conjecture. Nobody presented any evidence that, in fact, locally grown product is more flavorful. Much less that produce grown from 50 to 100 miles away from campus is less flavorful than produce grown under 50 miles from campus.
The same point goes on sustainability. Now there are many definitions, and as UC Davis is entitled to decide its own priorities — minimize carbon output, minimize water usage, ensure proper treatment of farm hands, whatever UC Davis wants to make its priority — that is its right. Intellectually, though, the school has no standing if all it is going to do is assume that product grown between 50 and 100 miles of campus is somehow automatically more sustainable than product grown between 100 miles and 150 miles from campus.
The second point we observe is that the good professors place great emphasis on the fact that sales direct-to-consumer are increasing, especially at Farmer’s Markets, which are increasing quickly in number. This is true and we recently dealt with the point here.
Yet we are not certain that the significance of the increase is what Drs. Hardesty and Feenstra wish to claim. Almost all Farmer’s Markets are political creatures in which the streets or the public parks are made available to farmers, typically for a tiny fraction of the rent that these spaces could bring if auctioned off to the highest bidder. That failure to charge the farmers the market rate for the property represents a public subsidy to Farmer’s Markets. It is not surprising that supermarkets and others that have to pay full rent will lose some market share to a subsidized competitor.
Yet even with such subsidies, this is a very small market. That $1.2 billion our correspondents site includes not just fresh produce but all agricultural products sold direct to consumers, including Christmas trees and eggs, etc. Still, $1.2 billion is a big number, but the very same report tells us that market value of all agricultural products sold in 2007 was over $297 billion!
Even if we limit it to just fruits, vegetables, tree nuts, berries, melons, potatoes and sweet potatoes, we have sales of in excess of $33 billion. There is still another factor. This “market value” listing is a market value to the farmer. So we are comparing FOB prices for conventional produce sales with retail prices for direct-to-consumer sales. What this all tells us is that the best data we have is that this whole matter is more important to professors, media types and activists than it is the mass of consumers.
The third point being made is that since the conference was in California, it made sense to have only Californians on the panel. We can concede on this matter, as there is, of course, nothing wrong with drawing on the expertise of the local community.
We are more concerned, however, with intellectual diversity than geographic diversity, and we think the audience would have gotten more out of the session if there was someone up there to present the other side of the issue. In other words, when one of the panelists talked about how terrible it was to ship our money down to Chile, why not have a representative from Chilean Fresh Fruit, such as Tom Tjerandsen, a “local” resident of Sonoma, on hand to explain why that just might not be the smartest way to look at the issue.
In fact, we probably don’t even have to go that far. We are sure that Drs. Hardesty and Feenstra’s colleague at UC Davis, Roberta Cook, who has worked extensively on international trade issues, would have been willing to stand up and point out why the panelist who believed keeping all the money in town was a great economic theory actually was going to impoverish us all.
The fourth point is that the authors explain that UC Davis Dining wants to be serious about its goal of “reducing the environmental impact of food purchases and dining operations while maintaining accessibility and affordability for all students.” We doubt no one’s sincerity and are certain all involved want to do good.
The question is whether buying local and, specifically, along the five-tier purchasing guidelines enunciated at the conference actually has anything to do with achieving these goals. Once again, if the school wanted to define explicit standards of environmental impact that it wants to use in purchasing, we can discuss the wisdom of those standards, but at least the school is being clear about what it wants to accomplish. These elaborate purchasing metrics only would make some sense if we assume that commercial transportation of produce is uniquely responsible for environmental harm. Yet there is no evidence for such a thing.
There is a lot of evidence that personal preferences are being elevated to purchasing metrics. Although we might defend to the death the right of a private party to purchase based on whim, a public institution such as UC Davis ought to be held to a higher standard. Even the seemingly unobjectionable goal — “reducing the environmental impact of food purchases and dining operations while maintaining accessibility and affordability for all students” — actually raises more questions than it answers. Why, after all, are environmental goals the one thing elevated among all other goals? What if some other school said its goal was to “maximally increase the amount of employment generated by food purchases for the dining operations while maintaining accessibility and affordability for all students”? Is this OK?
To us this is the key. If what Dr. Feenstra and Dr. Hardesty are saying is simply that lots of people want to buy local and so the food chain — producers, distributors, retailers, restaurants, etc. — should make it available to them, that is unobjectionable to us. Different consumers want lots of things — sometimes consumers want mini skirts and sometimes long skirts, sometimes consumers want pet rocks — and providing legal products is capitalism. We are all for it.
We even can understand rooting for your team. So if the reason UC Davis should buy California produce is because they are in California or US growers because they are in the US and they want to support the home team growers with a little jingoism, well we can put that up to the same kind of emotional feelings of affiliation that leads people to care for sports teams.
But we don’t think the advocates for local want to say that this is just an au courant style or an irrational attachment; they want to make serious intellectual claims. Our point was that the specific claims made in the seminar — that we will become richer if we all spend all our money in the town we live in… that the environment will be better if we buy in a five-tier purchase schema such as UC Davis does… that local purchasing always means more flavorful produce… that we should not send money to Chile, etc. — are either not true or unproven. They don’t stand up to intellectual scrutiny.
The intelligent and incisive gentleman in the back of the room at the panel discussion who asked “why local” and who suggested we look at “metrics” was Jorge Hernandez, SVP Food Safety and Quality Assurance for US Foodservice. He’s a former FDA official, former NRA Foundation executive, and a former PMA Foodservice division director. He is a world class resource when it comes to food safety.
We think he was precisely correct. Dr. Hardesty and Dr. Feenstra flatter us by asking for our advice, and the advice would be this: Local and sustainable are both code words for something else. If one wants to simply pander to people who like those words, that is fine. Call a spade a spade. If, however, one wants to procure to achieve specific environmental, social or culinary goals, then define those explicitly — make meeting those goals the prerequisite for a purchase order. Setting the criteria as concentric rings of locality that may or may not achieve any actual goals allows for sloppy thinking that no UC Davis professor would ever allow in the classroom.
We would like to add one more point. Namely that the Pundit’s family functioned as a wholesaler, auction buyer and much else in the produce industry for four generations in the US and many generations more back in Russia. Although we came to be substantial exporters and importers, we were always helping local growers market their crop.
From Hunts Point, this Pundit worked with Amish farmers who brought in their melons from Pennsylvania, New York State apple growers who brought down their fruit from the Hudson Valley, Long Island potato farmers who brought not just potatoes but cauliflower and other vegetables. We had New Jersey peaches, blueberries and tomatoes. Pennsylvania mushrooms. There was also so much innovation. At different times, we marketed US-grown Belgian Endive and baby vegetables grown in a greenhouse in the Bronx. So many more products and producers. The notion that selling local produce is some unheard-of adventure, some uniquely “new market” that somehow repeals the laws of comparative advantage just isn’t true.
United is doing a workshop at its Washington Public Policy Conference on precisely this point, that wholesalers and distributors have been marketing local, long before local was cool. Indeed terminal market wholesalers serve an important place in the success of local growers, because unlike retailers and foodservice operators who buy only what they need and want, terminal market wholesalers help growers sell the varieties, sizes and grades that the growers need to sell. Few things could more help local growers than new markets such as are about to open in Philadelphia and are being planned in New York.
Most local growing that died out did so for good reason. There were other places where the crops could be produced more efficiently. For the most part, the revival of local growing depends on transportation prices. If high oil prices lead to expensive transport costs, then everyone will love local. If it is cheaper to produce somewhere else and bring in the product, that is what is likely to happen in most cases.
We support offering consumers a choice, if consumers want a choice. So we have no objection to local, for the same reason we have no objection to selling organic produce, imported produce, greenhouse-grown produce or branded produce. Consumers who want options should be given them. But we object if an organic producer makes unproven claims that eating organic produce extends the human lifespan, and we object to claims that local is inherently more delicious and more sustainable. Sometimes it is and sometimes it isn’t.
Being a foodie and wanting local may just add to the stock of harmless public fun, but here at the Pundit, and we trust at UC Davis, we will look to the facts before proclaiming an action to have special virtue.
Many thanks to Dr. Shermain Hardestry and Dr. Gail Feenstra, both of UC Davis, for weighing in on such an important issue.
