Why We need Local Producers... Fresh—When you see the sign at the farmers market stall, you think of the bright, cheerful logos for Local fruits and veggies. The apparent message is lets-support-local-producers, a kind of community store boosterism. But buying close to home may be more than a feel-good, its-worth-paying-more-for-local matter. A number of researchers and organizations are taking a closer look at how money flows, and what theyre finding shows the profound economic impact of keeping money in town—and how the fate of many communities around the nation and the world increasingly depend on it. At the most basic level, when you buy local more money stays in the community. I have compared what happens when people buy produce at a supermarket vs. a local farmers market or community supported agriculture municipal programs and found that twice the money stayed in the community when people bought locally. That means those purchases are twice as efficient in terms of keeping the local economy alive. Indeed many local economies are languishing not because too little cash comes in, but as a result of what happens to that money. Money is like blood. It needs to keep moving around to keep the economy going. The local economy dies when money is spent elsewhere—e.g big supermarkets, non-locally owned business and other services —it flows out, like a wound. By shopping at the community store instead of the big chain, consumers keep their communities from becoming what I call ghost towns (areas devoid of neighborhood shops and services) or clone towns, where Main Street looks like every other Main Street with the same fast-food and retail chains. Local producer tends to add creative elements that make either the product or materials used more appropriate to the place. For example, an area where sheep are raised might make lambs wool socks and other goods. The point is not that communities should suddenly seek to be self-sufficient in all ways, but rather to shift the balance. Can a community produce more locally? Of course it can if the raw materials are there. And what about that higher cost of local goods? After all, big chain stores got to be big because their prices are low. The difference falls away once you consider the increase in local employment as well as the relationships that grow when people buy from people they know. Theres also the matter of local/regional resilience. While community stores are largely service providers - The question is: what economic framework will help them reclaim those skills and that potential. Say, for example, the exchange rates change or the price of oil rises so that foreign-made goods are no longer cheap to import. The community could find itself doubly stuck because domestic manufacturing is no longer set up to make all these products. While no community functions in isolation, supporting local trade helps recreate the diversity of small businesses that are flexible and can adjust to changing needs and market conditions. Another argument for buying local is that it enhances the velocity of money, or circulation speed, in the area. The idea is that if currency circulates more quickly, the money passes through more hands—and more people have had the benefit of the money and what it has purchased for them. If youre buying local and not at a chain or branch store, chances are that store is not making a huge profit. That means more goes into input costs—supplies and upkeep, printing, advertising, paying employees — which puts that money right back in the community. One way to really empower our communities is to make sure money stays in that community through creating a local currency. The Buy-local campaign can help local economies withstand the downturn. For communities, this is a hopeful message in a recession because its not about how much money youve got, but how much you can keep circulating without letting it leak out....
Posted on: Mon, 24 Nov 2014 19:02:20 +0000
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