The Benefits of Buying Local

By Alain Dumas, economist, editor at the Gazette de la Mauricie

Considering that food takes up about 20% of our budget, replacing imported foods with local produce has a big impact on our economy and our environment.

For example, when we buy a chicken that’s been raised and slaughtered elsewhere in the world, we our money goes to pay a foreign business as well as an international transporter that emits greenhouse gases, as well as a number of intermediaries. In the end, only a tiny part of our money goes into the local economy.

On the other end, if I decide to buy a locally produced chicken, most of the money I spend goes to the local economy, supporting jobs in the region and limiting the greenhouse gases emitted.

If every Quebec consumer replaced $12 of purchases on foreign-supplied food with buying food produced in Quebec, it would add a billion dollars to the Quebec economy. Though it doesn’t seem like a large amount, that $12 would increase the percentage of purchases of locally produced food from 51% to 56%.

Buy and Sell

Buying local has a multiplier effect on the regional economy, because that spending generates revenue that stimulates the purchase of other local products and services. It’s a chain reaction that helps the local economy roll.

The more money that gets into the hands of local producers, the more they pay their suppliers and local partners. Local purchasing also has a positive effect on equipment and service suppliers, as well as the hiring of local people, who in turn spend money in the local economy.

Studies show that a dollar paid to a local producer generates supplementary spending of $2 to $2.50 in the local economy. As we’ve already made clear, buying $100 of locally produced food generates $100 of revenue for local producers. Given that this money is taxed at around 40%, the remaining $60 is injected into the local economy, which stimulates more local purchases, and so on.

In the end, that initial $100 can generate up to $250 of new local spending. We refer to that as a multiplier effect of 2.5 in the local economy.

Finally, let’s note that the money taken away for tax at each step in the process gives levels of government money that is reinjected into public services like education and health care.

More Expensive?

Even if 75% of consumers are ready to pay a little bit more for locally produced food, studies show that it doesn’t necessarily cost more. Researchers at Dalhousie University compared the prices of 134 locally produced foods with those of 431 imported products. In the end, the prices of local products were as low or even lower in 70% of all cases.  

Moreover, we also have to take into account the quality of foreign-produced food and the working conditions of those involved in its production. When we import cheap food from countries that force young children to work long hours in hard conditions for little pay, we’re complicit in unfair trade practices. Those lower prices cause injustices. Buying local is a form of insurance, since the workplace laws here, when they are respected, guarantee working conditions and salaries that are within acceptable humanitarian limits.

The economic consequences of the purchase of local products are real and numerous. So is the environmental impact, since buying local saves the planet from millions of tons of greenhouse gases generated by international transport.

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