1. Economic Sustainability of
Local Food Systems
Brian Potts, AICP, MURP
October 31, 2013
Colorado Sustainability Conference

2. Define Economics!
"Economics is a science which studies human
behavior as a relationship between ends and
scarce means which have alternative uses.” –
Lionel Robbins (1932)
Three guiding questions:
1. What ends do we desire? (utility)
2. What limited, or scarce, resources do we need to
attain these ends?
3. What ends get priority, and to what extent
should we allocate resources to them?

3. Ecological Economics
• We want to use resources efficiently while
respecting nature and intergenerational needs
• Maximum sustainable yield: By optimizing the
productivity of natural processes, you can
harvest a certain quantity of resources
without diminishing the ecosystem’s
reproductive capacity; reduce waste
• … Efficiency is letting nature do what it does
best and harvest what it gives us.

4. Farm as an Ecosystem
• Rodale Institute (PA): A farm is like a factory,
you put raw materials in, the land with roots is
the machinery that produces nutrients, the
plants are the product.
• Understanding natural processes:
– roots and fungus secure nutrients
– farmers can produce quality products while
reducing inputs and labor and profiting

5. How local is local?
• 100 miles? 500 miles?
Within the country?
• Local food is expected
to have certain superior
qualities… Nutritional,
natural, small-scale
farmed food produced
within the minimum
distance possible
between farm and
consumer
NYC Foodshed Map – Columbia University

6. Does Local mean Sustainable?
• A local food economy can be a component of
sustainability but not entirely
• Sustainability is meeting the needs of the present
without compromising the ability of future generations
to meet their own needs
• Food Sustainability Criteria:
– Transportation: distance and transport
– Production Inputs: nutrient sources, water, GMO or nonGMO seeds, limited use of finite resources
– Labor: equity, wage, mechanization, resource cost
– Nature of Consumption access, cost, quality (nutritious
and fresh)

7. Neoclassical Econ vs.
Ecological Econ
• Economics says that free markets will allocate
resources efficiently
• Ecological economics says markets are never truly
“free” because of market failures: Fed policy,
monopolies and externalities (e.g.: pollution, health)
• An informed consumer would want healthy local
food that doesn’t require subsidies and massive
inputs of energy to produce or transport food
thousands miles away

8. Historic Food Consumption
• 1858: Invention of mason jars (home canning)
• Until use of refrigerated transport (1888), most food
was produced and consumed locally
• Victory Gardens (WWII Museum): 40% of all vegetable
production in 20 million gardens
• Today’s competitive advantages for exports is
dependent on food prices that do not internalize cost
of externalities
– Impact of air, water, and soil pollution
– Prices do not reflect varied nutritional value of food
– Market failures: Producer preferences reflect habits and
government policy resulting in inefficient market
allocation

9. US Agricultural Land Use
• 1/5 of land (408 million
acres in 2007) used for
crops
• 1/4 of land (613 million
acres in 2007) used for
grazing
• 914 million acres in
production in 2012
• 1/3 of all US farms are
located within metropolitan
areas representing 18% of
total farmland
Above:
JBS Swift,
Greeley,
CO
Right:
Winter
wheat near
Cheyenne
Wells, CO

10. Impact of Meat
• Average American consumes 200 pounds of meat
per year
• 287 gallons of petroleum to produce one steer
• Cornell University Study (1997):
– US could feed 800 million people with the grain that
livestock eat
– If exported, would boost trade balance by $80 B
• Negative externalities:
– EPA: Water and air pollution
– Taxpayer burden: Costs associated with disease
prevention, inspection, outbreak response

11. 2012 Farm Bill: Upsides
National Sustainable Agriculture Coalition:
• Directive to USDA to create a Whole Farm Diversified Risk Management
Insurance product for diversified operations, including specialty crops and
mixed grain/livestock and dairy operations.
• Farmers Market and Local Food Promotion Program for direct producerto-consumer marketing channels and “scaled up” local food sales to
retailers and institutions. The Local Farms, Food and Jobs Act calls for $30
million a year.
• Funding for Community Food Projects receives an increase of $5 million a
year for the next 5 years, above its permanent funding of $5 million a
year.
• Appropriate Technology Transfer for Rural Areas (ATTRA), which provides
research-based information on sustainable agriculture, remains intact
with $5 million in annual discretionary funding.
• Funding for national organic certification cost-share.

12. 2012 Farm Bill: Downsides
• Congress: delays due to arguments on SNAP
funding; lawmakers discussed it on Oct 30th
• Still includes subsidies for industrialized grain
production
• No programs for Community Gardens;
expansion of educating young farmers
• SNAP should include gardening education to
address local hunger, poverty, and nutrition

13. USDA: CO Ag. Statistics
• Land Area: 66.3 million
acres
• Approximate Cropland:
11.5 million acres
• Approximate Irrigated
Acres: 2.6 million acres
• Number of Farms and
Ranches (2011): 36,700
• Average size of
Farm/Ranch: 853 acres

14. Colorado Agriculture
• Farm receipts: $6.017 billion
– Livestock and Livestock Products: $3.75 billion
– Crops: $2.63 billion
• Total Production Expenses: $4.45 billion
• Total Exports (Est. Value 2010): $115.8 Billion
– 61% of exports are meat products
• 170,000 jobs, contributing $40 billion to economy
• Weld County: #1 in the state, #5 in the US in product
sales. $700 million in cattle, $200 million in crops
• Why can’t we feed ourselves with local food?

15. What do we need?
• Approximately 7% of all US agricultural land is
dedicated to fruit and vegetable production
• Garden needed to support an individuals
produce needs: 200 sf and 1000 sf
• Example: Dervaes Urban Farm in Pasadena:
3900 sf garden produced 7,000 pounds of
produce in 2010 (a percentage is sold)
• 5.2 million Coloradoans x 1000 sf = 11937
acres… less than 2% of Colorado’s land area

16. Land Use and Economics: The Good
• FDA inspections not required for small-scale
farms with less than $500,000 is annual sales
• Consumer demand for locally produced food is
increasing and producers shifting to meet
demand.
• USDA: farmer direct sales to consumers $650
million in 1990s to about $1.2 billion in 2011;
$4.8 billion when adding retailers and restaurants
• Colorado has the agricultural capacity to fully
feed its population with Colorado agricultural
products

17. Land Use and Economics: The Bad
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Economies of scale: Because external
costs are not reflected in price at point
of sale, it’s still less expensive for
consumers to purchase imported
industrially-produced food
Food Culture: we expect seasonal
produce year-round (e.g.: tomatoes,
oranges, etc)
Market Momentum: economic
infrastructure will reinforce the status
quo; slow to change
Environmental Changes: Bureau of
Reclamation estimates that we could
see water supply swings of 30% surplus
or shortage due to climate change

18. Land Use and Economics: The Ugly
• Public perceptions of agriculture is that all
commercial production is either unsightly,
creates odors, or uses harmful chemicals
• People don’t want to live next to a “farm”
• Zoning prohibits agricultural activities and
small-scale farm business in many zoning
districts in many jurisdictions
• Development is still consuming farmland

19. Trends
• Environmental awareness as a moral value
• Recession impact: reevaluating satisfiers, less conspicuous
consumption
• Economic shift: increasing consumer demand for local food;
willing to pay more
• Recognition that not all food is equal: two apples can look the
same but have vastly different nutritional profiles
• Desire to reconnect with food: seeds sales increase, rapid
expansion of community gardens, CSAs, farmer’s markets

20. Where do these trends lead?
• Beginning of the end of industrialized food
consumption by American’s; industrialized
food will mostly be exported
• Maximum sustainable yield: farmers will
realize that they can profit by partnering with
nature; optimize effort and resources
• Democratization of food: control over
location, quality, and means of production will
shift closer to the consumer

21. How is Colorado Changing?
• “Colorado Proud” campaign started in 1999
• April 2013: “Cultural, Heritage, and
Agritourism Strategic Plan”:
• Three-year action plan
• CO Tourism Office very engaged in promotion
• Pairing heritage and agritourism is an
approach unique to CO

22. Facilitating Local Food
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At least 110 farmers markets in Colorado
At least 17 cities allow chickens for private use
Craft-brewing promotion
CSU and CO Dept of Ag. (CDA) held 16
workshops last year on agritourism
• Local jurisdictions and farmers forming
partnerships to strengthen local food

23. Discouraging Zoning
• Residential Farms are rarely allowed due to
Business License/Home Occupation regulation
• High level of resistance to farming for profit
on small residential lots
• Reality: already some level of informal
agricultural economic activity occuring

24. Encouraging Zoning
• Allowance in large lot residential zoning districts for
farming, apiary uses (beekeeping), animal and
poultry husbandry (E.g.: Lakewood, Wheatridge,
Summit County)
• After reintroducing low-intensity farming to
residential areas, local jurisdictions are expanding
the possibilities
• Adams County and Boulder County utilizing open
space for agriculture and identifying opportunities to
expand

25. Future: The Residential Farm
• New housing converts farmland into
neighborhoods, but can it still be a farm?
• New Urbanist Andrés Duany: “agriculture is
the new golf
• Old suburbs: attract young people by allowing
home-based farming businesses
• Imagine neighborhoods marketed to attract
small-scale farmers zoned as a mixed-use
residential agriculture district

26. Colorado Food
• Colorado’s assets: soil, education, ratio of people to
acreage would allow for policies that support urban
and local farms
• Develop state, regional, and local foodshed plans to
manage agricultural assests
• Education: youth farming and school gardens
• Continued promotion of the Colorado brand; local
food should be an economic development priority:
multiplier effect

27. Questions?
Brian Potts, AICP, MURP
Potts.psgs@gmail.com

28. Sources
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U.S. could feed 800 million people with grain that livestock eat, Cornell ecologist advises animal scientists:
http://www.news.cornell.edu/stories/1997/08/us-could-feed-800-million-people-grain-livestock-eat
EPA Ag Land Use: http://www.epa.gov/agriculture/ag101/landuse.html
CSU: Weld County Ag Statistics http://www.colostate.edu/Depts/CoopExt/WELD/agriculture.htm
Dervaes Family Urban Farm – Pasadena http://urbanhomestead.org/urban-homestead
DOLA – CO Population Data: http://www.colorado.gov/cs/Satellite/DOLA-Main/CBON/1251593300013
FDA – Small Farms and the Food Safety Modernization Act:
http://www.makeourfoodsafe.org/pages?id=0034
USDA Report on Local Food - Huffington Post:
http://www.huffingtonpost.com/2011/11/14/locally-grown-food_n_1092146.html
Colorado Dept of Agriculture – Colorado Proud:
http://www.colorado.gov/cs/Satellite/ag_Markets/CBON/1251624765674
Colorado Proud Campaign: http://durangoherald.com/article/20130803/NEWS01/130809832/
City of Lakewood:
http://www.lakewood.org/City_Managers_Office/Sustainability/Economic_Vitality/Local_Food.asp
Rodale Institute: http://rodaleinstitute.org/our-work/soil-health/
April 29, 2010 - http://www.good.is/post/agriculture-is-the-new-golf-rethinking-suburban-communities/
Increase in Gardening
http://www.nytimes.com/2011/09/09/us/09gardening.html?_r=4&scp=1&sq=vegetable%20garden&st=cse&

29. Sources
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NYC Foodshed: http://blogs.ei.columbia.edu/wp-content/uploads/2009/09/nyc_foodshed_700.jpg
JBS Swift, Greeley: http://farmandredmoon.com/2011/05/jbs-swift-beef-plant-in-greeley-colorado/
Wheat: http://coloradowheat.org/2012/04/wheat-crop-scouting-south-of-cheyenne-wells/2012-04-2009-17-35/
Gallons of fuel to produce a steer: “Ecological Economics,” Herman Daly, Joshua Farley; 2004
National Sustainable Agriculture Coalition: 2012 Farm Bill article:
http://sustainableagriculture.net/blog/senate-farm-bill-local-food-rd/
Congress to meet on Farmbill – Oct. 28th, 2013:
http://www.usatoday.com/story/news/politics/2013/10/28/farm-bill-conference-committee/3289135/
Grant Family Farms Info: http://www.bountifulconservation.com/2012/grant-family-farms/
Gifford Park Community Garden – Omaha, NE:
http://www.giffordparkomaha.org/Community_Garden.html