Economics in Sustainable Agriculture Research
ERS Local Foods Research
November 8, 2010
Contact: Luanne Lohr, ERS, 202-694-5245, llohr@ers.usda.gov
Consumer interest in food that is locally grown and purchased has increased sharply in recent years. Although sales of locally grown food still account for a small share of total U.S. food sales, it is one of the fastest growing segments of U.S. agriculture. Interest in local foods stems from a variety of potential benefits, including environmental, health, food safety, and rural development. These potential impacts have given rise to policies at the Federal, State, and local level that incorporate local foods to achieve a variety of desirable outcomes.
Economics research on local food systems can illustrate the incentives that producers, consumers, and other enterprises face in local food markets, help inform how local food systems may develop in the future, and suggest how expanded local food markets may impact measures of market performance of interest to policy makers. One recent ERS report explores alternative definitions of local food, estimates market size and reach, describes characteristics of local food consumers and producers, and examines economic and health impacts of local food systems from previous research. 1 Another compares the structure, size, and performance of local food supply chains with supermarket supply chains. 2 This brief outlines other major research questions that will be addressed in ERS’s ongoing program of research on local foods.3
How do market conditions and constraints affect local food system performance?
ERS is characterizing economic trade zones for farmers’ markets and analyzing the factors that influence market success or failure. ERS’s estimation of consumer willingness to pay for direct-marketed local foods will describe demand for local fruits and vegetables. Programs to support growth of direct marketing outlets, of which farmers’ markets are the most popular venue for both farmers and consumers, depend on understanding these conditions and constraints. Whether federal farm programs play a role in determining planting decisions for local producers will be examined, to better understand how policy interacts with growing local demand. Through a cooperative agreement with the Pennsylvania State University, a multiregional model will describe the potential impacts of improved diets (that include more fresh fruits and vegetables) on regional production, food processing, energy flows, and employment.
How are local foods produced and marketed?
Local food systems often involve producers who alter their product mix, production practices, and marketing outlets to participate in local food markets. ERS is studying the characteristics and spatial distribution of farms that engage in direct-to-consumer marketing, and examining the determinants of direct-sales clusters in urban areas. ERS is conducting research on the interaction between organic production and local marketing. This research examines factors that may explain decisions by organic producers to market their products locally, and the incentives that organic producers face to participate in a variety of marketing channels.
What is the role of local foods in the USDA school meal programs?
Farm-to-School efforts link school meal programs with local farmers in order to bring fresher foods to school cafeterias while supporting local agriculture. ERS is studying the prevalence of participation in local farm-to-school initiatives and what characteristics participating school districts have in common. ERS is also tracing the dollar value of food items flowing through farm to school programs relative to other supply chains serving school cafeterias. ERS is also studying the impact of farm-to-school efforts on fruit and vegetable consumption of school meal participants. The results from these studies may provide lessons for other farm to food service institution markets, such as farm-to-healthcare and farm-to-employer, in terms of supply chain constraints and impact on nutritional quality of institutional meals.
What are the food environment factors that influence availability and selection of local food?
Broader descriptions of the local food environment in which consumers and vendors operate are useful in understanding how policies can alter local food choices. ERS will construct an index of food localization that can inform local organizations or governments how well they are integrating local foods into their food systems.
How does the availability of local foods in low income areas impact food choice?
The President’s proposed FY 2011 budget for ERS includes an increase of $2 million and two staff years for a project called Community Access to Local Foods. ERS would develop data and conduct economic research on the access to affordable and nutritious food, particularly local foods, by low-income communities. Data will be obtained through linking spatial characteristics available in federal and proprietary data sets. These data will include community factors such as race/ethnicity, unemployment rates, public transportation systems, crime rates, school characteristics, participation in food assistance programs, and other environmental factors linked to ERS’s new National Household Food Purchase and Acquisition Survey (FoodAPS). Additional data to characterize the availability of local foods would be collected for areas sampled for the FoodAPS.
Looking to the Future
The above research program draws on ERS’ unique national-level data and staff expertise. The results will have broad application, and when completed, these studies will yield insights into factors leading to successful expansion of local foods. This ERS research addresses needs identified in the recent National Academies report Toward Sustainable Agricultural Systems in the 21st Century, and lays the foundation for examining larger questions regarding sustainability in food and agricultural systems.
1 Local Food Systems: Concepts, Impacts, and Issues. USDA Economic Research Service Economic Research Report ERR-97, May 2010. http://www.ers.usda.gov/Publications/ERR97/
2 Comparing the Structure, Size, and Performance of Local and Mainstream Food Supply Chains. Economic Research Service Economic Research Report ERR-99, June 2010. http://www.ers.usda.gov/publications/err99/
3 This brief provides a guide to ERS research plans as of November, 2010. It is subject to revision as priorities and circumstances change and evolve.
