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Eating locally produced or imported food: Which is ‘better’?
By Oleg Nekrassovski
There is a lot of information, both in the popular press and in academic articles, extolling
the virtues of buying directly from local farmers. Not surprisingly, many sources on the subject
give a good list of such virtues, which tend to appear quite logical. So, let’s first take a look at an
example of such a list, which happens to be from a journal article written by an academic
proponent of UK’s farmers’ markets.
According to La Trobe (2001), direct marketing of food from local farmers to local
consumers, thus eliminating the ‘middlemen’ from the supply chain, provides people with fresh
and healthy food, which is often organic and is sold at affordable prices. Also, the direct sale of
food from local producers to local consumers reduces the distance that the food has to travel
from producers to consumers. A reduction in the distance travelled means a reduction in the use
of transport, which equals a reduction in environmental pollution (La Trobe, 2001). But the key
virtue of shopping at local farmers markets, according to La Trobe (2001) and many other
patriotic sources, appears to be the undeniable financial support that it provides to local farmers,
and by extension, domestic rural economies.
Thus, there exists a standard set of claims regarding why it is better to buy one’s food
from local farmers than from supermarket chains. But are these claims true? Let’s analyze each
one in turn.
According to the first claim, the food produced by local farmers, whether organic or not,
is fresher and healthier than that sold at the supermarkets. This, however, is most likely to be

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false because even some supporters (Friedmann, 2007) of organic farmers in the Toronto area,
for example, admit that the farmers in question were, at least before being helped, producing
food of such low quality that they had trouble entering the market. In particular, even though
those farmers were growing their produce without chemicals and with attention to ecosystem
sustainability, they apparently were incapable of handling their produce properly, so that it
would spoil by the next morning, despite being refrigerated. It is suggested that this problem
stemmed from the fact that organic farmers often had no background in farming (Friedmann,
2007).
The claim regarding the supposed ‘affordability’ (whatever this vague term may indicate)
of prices asked for the produce of local farmers, will be addressed later, together with another
claim. On the other hand, the validity of the environmentalist argument, described above, in
support of consuming food produced by local farmers, will not be analyzed in this paper, owing
to the complexity of relevant evidence and independence of the relevant disciplines from
production and economics of food. However, addressing the claim, that the key virtue of
shopping at the local farmers’ markets is the consequent financial support of local farmers and
rural economies, will be the highlight of the present paper.
So, why is supporting local farmers and domestic rural economies supposedly such a
great thing to do, at least according to those who promote this idea? And is that really so? Instead
of attempting to give quick and easy answers to these questions, let us first take a look at how the
government can support domestic producers and whether this support leads to any social good.
Governmental support of domestic producers is called protectionism, and it always takes
the form of an attempt at curtailing free international trade. Governments tend to interfere with

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free international trade using four key methods (McConnell et al., 2002). Protective tariffs are
special taxes charged for each batch of “undesirable” imported goods. The aim of protective
tariffs lies in the protection of domestic producers from competition with foreign producers
(McConnell et al., 2002). Protective tariffs effectively impede international trade by causing an
increase in the prices of imported goods. This increase in prices causes the local market demand
to shift toward domestic products. Domestically produced apples, for example, will be made
relatively less expensive for domestic consumers if a tariff is placed on imported apples
(McConnell et al., 2002).
Import quotas refer to the limits placed on the total quantities of specific items that may
be imported during a specified period of time. Once a quota for a certain product is “filled,” that
product can no longer be imported until the beginning of the next quota period (McConnell et al.,
2002). Import quotas can have a greater negative effect on international trade than tariffs. A
“tariffed” product can still be continuously imported in large quantities; while with an import
quota, all imports of the product must be stopped once the quota is filled (McConnell et al.,
2002).
Non-tariff (and non-quota) barriers include unnecessary licensing requirements,
unrealistic standards regarding product quality, or simply complicated and time consuming
customs procedures created by bureaucrats (McConnell et al., 2002). In some nations, importing
a foreign good requires a license, which is very hard to obtain because the number of the licenses
that can be given out is purposely limited. Other nations require many imported products to go
through a lengthy, unnecessary inspection (McConnell et al., 2002).

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Export subsidies refer to the payments that the government makes to the domestic
producers of goods destined for export. The subsidies enable producers to use less of their own
money to finance production, which in turn enables them to charge lower prices and thus to sell
more of their goods on the global market (McConnell et al., 2002). Canada, for example, has
artificially lowered the price of their food produce on both domestic and the world markets by
subsidizing domestic farmers (McConnell et al., 2002).
But why would the Canadian government want to protect domestic producers and curtail
international trade? There are several reasons. Many economic laymen firmly believe that
exports are good for the country’s economy because they increase domestic employment;
whereas imports are bad because they decrease domestic employment by undermining domestic
production industries (McConnell et al., 2002).
In reality, of course, a nation can have full employment with or without international
trade. However, international trade and specialization increase the nation’s total economic output
by increasing the productivity of its resources (McConnell et al., 2002). In fact, just like for
individuals, specialization and trade for a nation, results in greater overall output and income.
Moreover, specializing and trading is profitable even to a nation which is more productive in all
economic activities than any of its potential trading partners (McConnell et al., 2002).
While it is true that a nation experiences a net economic benefit from free trade, some
domestic resource suppliers and industries may be harmed by it. Such industries and suppliers
often try to preserve their economic positions by persuading the government to protect them
from foreign competition, especially from imports (McConnell et al., 2002). Altogether, there
aren’t that many people who directly benefit from import protection, but they have much at stake

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and a lot in common. So, it is easy for them to band together and to pursue political activity to
help them achieve their protectionist goals (McConnell et al., 2002). However, the financial
benefits to the local producers are usually greatly exceeded by the overall cost to society. Quite
frequently it is found that the annual cost to the public of protecting a domestic job is $100,000,
while the job in question pays less than half that amount. However, because such costs are spread
out over millions of citizens, in virtue of being buried in the price of goods, each individual
citizen bears a fairly small and hence barely noticeable cost (McConnell et al., 2002).
The political voice of a few producers demanding protectionism is loud and constant,
while that of the millions of adversely affected consumers is soft or non-existent. In fact, the
public may be seduced by the apparent truthfulness and nationalistic appeal of the protectionist
arguments (McConnell et al., 2002). While the costs of protectionism to society, cited by
economists, are spread out over the entire economy and are far from clear to the public, the
alleged benefits seem immediate and straightforward (McConnell et al., 2002).
Hence, whether through privately financed propaganda or through direct interference
with the free market by the government, artificially created, powerful social and economic forces
push many Canadians into subsisting on food which is largely produced in Canada. Pushing
Canadians into buying Canadian made food, benefits Canadian food producers, but harms
Canadian consumers who are forced to pay higher prices than those that would exist under free
international trade (McConnell et al., 2002). The higher prices of primary food produce also
harm Canadian food processing industries, which use this primary produce as input, but have
nowhere else to go for cheaper produce (McConnell et al., 2002). Also, the protection of
Canadian food producers from foreign competition makes them less likely to become interested

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in developing cost saving strategies, higher quality or higher yield products (McConnell et al.,
2002). Finally, overall, the protection and support of Canadian food producers harms the
Canadian economy by decreasing the productivity of its resources and reducing its total output.
References
Friedmann, H. (2007). Scaling up: Bringing public institutions and food service corporations into
the project for a local, sustainable food system in Ontario. Agriculture and Human
Values, 24, 389–398. doi: 10.1007/s10460-006-9040-2
La Trobe, H. (2001). Farmers' markets: consuming local rural produce. International Journal of
Consumer Studies, 25(3), 181-192. doi: 10.1046/j.1470-6431.2001.00171.x
McConnell, C. R., Brue, S. L., & Barbiero, T. P. (2002). Macroeconomics. Toronto: McGraw-
Hill Ryerson.