June 5, 2008
Locally-grown produce may cost a little more, but new research suggests that the average consumer is willing to pay that premium. The study authors say their findings provide some farmers an attractive option to enter a niche market that could boost their revenues.
The study also showed that shoppers at farm markets are willing to pay almost twice as much extra as retail grocery shoppers for the same locally produced foods. Both kinds of shoppers also will pay more for guaranteed fresh produce and tend to favor buying food produced by small farms over what they perceive as corporate operations, according to the study.
"Our conclusion is that if a farmer wants to consider producing food for local distribution and marketing it locally, there are people who are willing to pay more for it," said Marvin Batte, a co-author of the study and the Fred N. VanBuren professor of agricultural, environmental and development economics at Ohio State University.
"We are not saying that we should be producing all of our foods locally, just that this may be a viable, profitable activity for farmers."And what's good for farmers also benefits consumers in this case, said Batte, director of the research project.
"This is an indication that certain groups out there value locally produced food and if farmers deliver that, it makes these consumers happier, so it's good for them, too," he said.
Most of the survey was conducted in late 2005. Batte said the findings and his contention that not all food should be produced locally still apply today, even in the face of rising fuel and food prices.
Many food crops that thrive in specific types of climates cannot be efficiently and affordably produced for local distribution elsewhere. And, he said, those who buy local food to support nearby growers likely would be even more motivated to lend that support in a flagging economy.
The study is published in the May issue of the American Journal of Agricultural Economics.
