Food quota law is a step in the wrong direction


St. Louis Post-Dispatch
By David Nicklaus
August 25, 2009

Although they live on some of the world’s best farmland, the leaders of
Illinois don’t seem to understand modern agriculture.

Last week, Gov. Pat Quinn signed a law that’s designed to make Illinoisans buy more farm products grown in their own state. It requires state agencies, including universities, to buy 20 percent of their food locally by 2020. Other entities, such as public schools, must meet a 10 percent local food quota.

If that strikes you as innocuous, or even virtuous, stop and think for a
minute. Why don’t those agencies buy local food already? Probably because it’s not available or it costs more. The law allows them to pay 10 percent extra to support local farmers, but that 10 percent has to come from somewhere. Should the school district raise taxes or cut teacher salaries so it can serve locally grown carrots?

The law was touted as a major victory for the local food, or locavore,
movement. During the legislative session, advocacy groups released a study saying that buying local food could create thousands of new farm jobs.

That prediction alone should have been enough to discredit the entire study. Modern agriculture’s central accomplishment has been its ability to feed a growing population with a shrinking work force. Farms employ fewer than 2 percent of Americans today, compared with 41 percent in 1900. Rather than mourn those "lost" jobs, we usually celebrate the fact that workers moved into healthier, better-paying occupations, while the remaining farmers produced more food than ever.

Illinois produces $9 billion a year worth of corn, soybeans, pork and other commodities, of which $4 billion gets shipped to other countries. Food processing is the state’s biggest manufacturing industry, with 950 companies adding $13.4 billion a year to the value of those raw commodities.

The locavore report complained that Illinois captures only a tiny slice of the $48 billion a year that its own residents spend on food. That should be something to marvel at, not worry about.

Economists call it the doctrine of comparative advantage: Each region should produce what it’s best at, and trade with other regions for everything else. Illinoisans buy California’s grapes and lettuce; Californians buy Illinois’ corn and bacon.

If some crazy law made Illinois grow its own vegetables and California its own corn, everyone would be poorer. The new Local Food, Farms and Jobs Act doesn’t go that far, but it’s certainly a step in the wrong direction. Its quotas must be filled by "businesses located wholly within the borders of Illinois," which is bad news for growers across the river in Missouri.

"When you set quotas you imbed inefficiencies," says R.W. Hafer, professor of economics at Southern Illinois University Edwardsville. "If nonlocal producers can produce the goods less expensively, the local tomato farmer may be hurt, but local consumers are the beneficiaries."

The local-food law appears to be a product of the same economic climate that has spawned "buy American" rallies and made NAFTA a dirty word in some quarters. "When you have tough times like these, people tend to look inward and become protectionist," says J. Fred Giertz, professor of economics at theUniversity of Illinois.

Don’t get me wrong: I appreciate the taste and value of local fruits and
vegetables. At this time of year, nothing is sweeter than an Illinois peach. But it tastes better when bought in a free-market transaction, not as the result of a government mandate.

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