The Plight of Joel the Farmer

Innovation is the world’s greatest economic engine. It creates new industries and fosters creativity around the world. In recent years, innovation has led to the development of countless technological marvels, many of which champion efficiency and green technology. No longer just a fad, protecting the environment has become a priority in many households. As a result, it’s not unusual to own a washing machine that is more efficient than a Toyota Prius. This is truly an amazing era.

However, the advances in technological efficiency far outpace the advances made in government efficiency. In fact, the bureaucratic red tape that is intended to protect American consumers and workers is actually retarding economic development in this country. Just think back to the last time a pothole in your neighborhood was fixed in a timely manner. Having trouble remembering? You’re not alone.

More specifically, the inefficiency of American government makes it exponentially more difficult for local farmers to provide their goods at competitive prices. Subsequently, most of the fruits, vegetables, and meats on the dinner table are from distant states, towns, and communities. While this may not seem like an important issue at first glance, it is a subject that deserves far more attention than it receives.

First and foremost, it shouldn’t make sense for locally grown foods to be more expensive than their out of state counterparts. An ear of corn grown in Bellefonte must travel less than 20 miles to make it to a grocery store in State College, whereas an ear of corn grown in Des Moines, Iowa must travel 885 miles. And with diesel averaging $3.93, that is a difference of approximately $3,400 in transportation costs. This stripped-down calculation doesn’t even factor in the negative externalities suffered by the environment, the salary of the truck driver, or the wear-and-tear on the infrastructure used in the transportation of the produce, all of which must be considered in tandem with the added transportation costs so as to arrive at the true cost of transporting food to destinations far and wide. Additionally, much of the produce shipped to Centre County from distant farms has to be treated with preservatives to keep it presentable and appealing to consumers. This, in turn, results in a less-healthy product.

So how is it possible for a vegetable from Iowa to cost less than the same vegetable grown in the proverbial backyard of Centre County? According to Joel Salatin, a small farmer in New York, the plight of local farms in today’s marketplace stems from overregulation by the government. His farm, which pays more than $10,000 each year for government-mandated workman’s compensation as dictated by an assessment system written by Tyson and Cargill, struggles to sell its produce. Forced to charge high prices to make back the money lost on government regulation, he finds it incredibly difficult to compete with the likes of Wal-Mart.

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But why would he have to pay more than $10,000 each year if his farm is such a small operation? How is that justified? Once Joel passed his third employee, the mandatory workman’s compensation program kicked in, forcing him to extend benefits to each of his employees. The interns and apprentices, each of whom receive free room and board as well as a modest stipend, were required to be treated like employees, further inflating his costs. Lacking the money to keep his cattle, pigs, and poultry in entirely separate enclosures, Joel was forced to pay high liability fees because his workers were technically exposed to the more dangerous animals (the pigs and cows) even though they were only being paid to tend to the chickens.

This farmer’s delivery costs are also much higher than would seem appropriate given the local market for his goods and the short distance traveled to get those goods to his customers. Due to the limited financial means of his farm, Joel Salatin is unable to afford a delivery service for his cows, pigs, and chickens. In the eyes of the government, delivery services are seen as a relatively low-risk way to transport animals to the marketplace, resulting in lower regulatory fees. By contrast, the animal hauler used by Salatin’s farm is considered risky and dangerous. As a result, he pays considerably more to ship his goods than do his larger competitors.

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A study conducted by Iowa State University in 2009 echoed many of Salatin’s sentiments. The findings, which were intended to address the dearth of information available regarding the prices consumers pay for locally grown produce, exhibit the higher cost of local fruits and vegetables. Consider, for example, the mean price per pound of one pound of string beans. At a non-local supermarket, this would cost approximately $1.51, while at a local produce stand, this would cost about $1.90. The difference between the two prices, furthermore, is statistically significant. While not statistically significant, the study also found (on average) that local cucumbers, cabbage, and sweet onions cost $0.05, $0.01, and $0.09 more, respectively than the non-local equivalents.

Therein lies the crux of the issue; as long as it is more expensive to purchase local produce, the people of State College and the surrounding communities will be more likely to buy from Wal-Mart and Wegmans than from local farmers. The negative effects of this tendency are twofold, with the environment suffering increased exposure to greenhouse gases and local citizens consuming more preservatives. If the ineptitude of the government was reduced and the jungle of red tape surrounding local farms was trimmed back to an acceptable level, we would all be healthier for it.

-Ian

Helpful Links:

http://fuelgaugereport.aaa.com/?redirectto=http://fuelgaugereport.opisnet.com/index.asp

http://www.probe.org/site/c.fdKEIMNsEoG/b.4218005/k.783A/Globalization_and_the_WalMart_Effect.htm

http://www.foodrenegade.com/guest-post-joel-salatin-on-why-local-food-is-more-expensive/

http://www.leopold.iastate.edu/sites/default/files/pubs-and-papers/2009-12-local-food-more-expensice-consumer-price-perspective-local-and-non-local-foods-purchased-iowa.pdf