Economic Impact Analysis

The local food systems we studied generated more sales, employment and GDP than conventional food sales with the sole exception Southeast Nebraska, where local food sales generated lower sales. Generally larger impacts of local food systems are not surprising considering much conventionally produced food consumed in these regions is produced elsewhere. Economies of size at the farm level and specialization at the regional level mean that most types of food products are produced in a relatively few places. Thus most conventionally produced and marketed food produce come from other regions, while most food products of any particular region are consumed in other regions. Local foods, on the other hand, are, by definition, produced within the region and thus generate higher indirect sales.

  • Total contribution to local GDP by local food systems was greater than the contribution of conventional food systems. Local food producers themselves retained a relatively small share of GDP, but the larger community enjoyed more value added because of the direct and indirect employment and the indirect sales generated by local food systems.
  • Magnitude of economic benefits from local food systems depends on the region. Farms in the region must be able to produce the quantities and quality of food that local consumers demand and the communities must generate sufficient demand to induce farmers to produce for the local market.

Is the rural economy overall expanded by local foods? Many of the displacement effects of local foods occur in other regions, other states, and even other countries. However, the growing size of the local food movement means communities are better off to encourage the development of local foods capacity, even in remote rural communities such as the ones we studied.

Read more at:    Poster Economic Impacts of Local Food Systems in the Rural Midwest