Research Report

Market Forces: CREATING JOBS THROUGH PUBLIC INVESTMENT IN LOCAL AND REGIONAL FOOD SYSTEMS

Jeffrey K. O’Hara
Copyright Date: Aug. 1, 2011
Pages: 46
https://www.jstor.org/stable/resrep00058
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Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. Table of Contents
    (pp. iii-iv)
  3. FIGURES AND TABLES
    (pp. iv-iv)
  4. Acknowledgments
    (pp. v-vi)
  5. Executive Summary
    (pp. 1-5)
  6. CHAPTER 1 Description of Local Food Systems
    (pp. 6-13)

    As major segments of the U.S. industrialized food system have consolidated and become increasingly remote from consumers, an alternative food system—one that offers locally produced food—has emerged. This section describes the various types of such direct marketing mechanisms, why some consumers demand locally produced food, the kinds of farmers that produce and sell it, the marketing channels used and the institutions involved, and obstacles that must be overcome for local and regional food systems to increase their sales and also to become more integrated into the existing food system.

    There are multiple definitions of local and regional food...

  7. CHAPTER 2 Supporting Local and Regional Food Systems Is Sound Policy
    (pp. 14-15)

    An important role of government is to attempt to ensure that markets operate efficiently so that societal welfare is maximized. Although unregulated markets can maximize aggregate welfare in theory, the conditions under which they are inefficient may warrant government intervention. Specific conditions (e.g., Stiglitz 2000) that can lead to inefficient markets include:

    1. Failure of competition. There must be a large number of buyers and sellers, with low entry and exit barriers, of a product so that firms cannot individually influence market prices.

    2. Public goods. Goods that are nonrivalrous⁹ and nonexcludable10 will be underprovided by private markets, given the potential for...

  8. CHAPTER 3 Local and Regional Food Systems Provide Positive Regional Economic Impacts
    (pp. 16-22)

    A critical objective for a community is to promote investments that provide sustainable economic prosperity and employment for its residents. Economic development is a particularly critical priority in rural communities (e.g., Vilsack 2010).

    If the United States wishes to sustain agricultural production in the future, one priority is to foster markets for new farmers, as the country’s farmers are collectively aging. Figure 7, a histogram of principal operators by age, shows that 30 percent of farmers are older than 65 years of age. In 2007, the average age of the principal farm operator was 57 years—an increase of two...

  9. CHAPTER 4 Local and Regional Food SystemsCan Have Positive Social, Health, and Environmental Impacts
    (pp. 23-26)

    Weight gain and obesity increases among U.S. adults over the past several decades have led to significant diagnostic and treatment costs, decreased productivity, and premature deaths. Annual medical costs attributable to obesity are estimated at $147 billion annually (Finkelstein et al. 2009). Many factors have contributed to this problematic trend, but the solution, at least in part, involves an increased consumption of more healthful foods, particularly fruits and vegetables.14

    External cues, such as those that result from marketing, packaging, and display, can have a strong influence on how shoppers select their food (Just, Mancino, and Wansink 2007). Grocery stores and...

  10. CHAPTER 5 Investing in Local and Regional Food Systems and Creating Jobs
    (pp. 27-31)

    As discussed earlier, the recent rapid growth in the number of farmers markets obscures the challenges associated with establishing one. It can be difficult to finance and implement a new farmers market according to a standard business model because many of them are community-based and -initiated, rely on volunteer labor, and are nonprofit institutions. It takes months, if not years, to set up a farmers market, and once it is in place several more years may elapse before the market is capable of covering its operating costs. A farmers market does not have the access to capital that a publicly...

  11. CHAPTER 6 Conclusions and Policy Recommendations
    (pp. 32-33)

    Local and regional food systems are here to stay. With more than 7,000 farmers markets, 4,000 CSAs, 100 food hubs, and a growing interest in reestablishing appropriate infrastructure, local and regional food systems have expanded and are now an entrenched part of our overall food system.

    Local and regional food systems can provide positive economic, social, health, and environmental impacts. According to our estimates, reauthorizing the USDA’s Farmers Market Promotion Program (FMPP) alone has the potential to provide between 1,200 and 13,500 jobs, and supporting other local-food-system programs has the potential to create thousands more. Local and regional food systems...

  12. References
    (pp. 34-37)
  13. Back Matter
    (pp. 38-38)