This guest post is by Aaron Shafer, research scientist and the creator of Skatelife Memphis, and an always entrepreneurial thinker about Memphis:
 

Smart City has long been advocating that a successful city builds on its existing assets and strengths.

Fred Smith, our local founder for FedEx, recognized the geographic placement of Memphis as a potential strategic advantage for building a national distribution powerhouse. So as Memphis looks to compete in the global market, perhaps it need not look any further then its own corporate backyard and our stomachs.

FedEx has invested millions into its logistics system for package distribution. Mr. Smith is also heavily vested in seeing the Memphis economy thrive. In addition, we can largely thank the Hydes and the Smiths for the monumental efforts toward making Memphis a biotechnology hub for the 21st century. Let’s hope their half a billion dollar effort succeeds.

The gaping leak

The food business, similar to many other business sectors, has undergone a massive consolidation, according to the World Watch institute, the “go-to” scientific resource center that provides fact-based analysis of critical global issues. If you are concerned about what you eat, take to the time to comb over this website.

Essentially, three major conglomerates (ConAgra/Dupont, Cargill/Monsanto and Novartis/ADM) dominate every link in the North American food chain (and increasingly the global food chain). And what we mean by dominating the food chain is from selling the seed all the way to owning name brands in the grocery store.

In return for this massive consolidation, the consumer benefits with low-cost food products.

Wake-up Call

However, consumers are slowly waking up to the hidden costs that aren’t factored into this industrial approach to agriculture. What’s the evidence of this collective awakening of our food consciences? Farmers’ Markets: starting with a few hundred in the 1970’s, the number has risen to 4,385 registered markets as of September, 2008.

So what are these hidden costs that you won’t find on the balance sheets of these companies? There are entire books, such as the Omnivores’ Dilemma by Michael Pollan or Deep Economy: The wealth of Communities by Bill McKibbeen, that are devoted to discussing these hidden costs, but briefly, the costs can be grouped into three categories: the health of consumers, job loss and the effects on the environment (land and animals).

Let’s just consider the job loss component.

Bottom Line

The bottom line is that farmers used to reap the fruits of their labors. In 1910, for every retail dollar spent on food, a farmer received 40 cents. At present, his share of that dollar is now 7 cents. Probably one of the best sites on the Internet to investigate these numbers is http://www.texaspricecheck.com. So how does a small farmer survive against a very fast, efficient and cheap agribusiness? Not very well, but a change and hope are in the air.

Thanks to the Internet, consumers are learning more about their food origins, and it’s this awareness that’s allowing our farmers’ markets to flourish and grow. Yet the farmers’ market is still a niche and privilege for those who can afford it.

For example, a 2006 economic study of the West North Carolina region showed that food sold directly from the farmer to consumer accounted for only 0.6% of all food products sold. This study is of particular interest to Shelby County because the populations are nearly identical. Citizens in this study spent $2.1 billion in food each year and yet $1.5 billion was spent on food coming from outside of the region and state.

Think About It

Take a second and think about that. That’s 1.5 billion dollars that could be recaptured by rebuilding a local food economy. And don’t forget the local multiplier effect. For every dollar spent locally, $2.5 more is generated through its local recirculation into other local stores. So now you are looking at a $3.75 billion re-infusion of money into the local economy!

Basically, this is a gaping void waiting to be filled by a cooperative effort between the consumer (you, schools, hospitals) and the producer (farmers urban gardeners, school farm projects). Jack Kloppenburg, a sociologist at the University of Wisconsin, says it best “there needs to be a distributor somewhere in size between Sysco and the CSA’s (consumer supported agriculture).”

The World Wide Watch report states: “This daunting void ‘between Sysco and CSAs’ may hold the greatest money-making opportunity for communities, allowing larger farms and food companies to tap into the interest in local foods and making it possible for a broader range of consumers to buy local foods.”

Our Competitive Advantage

Memphis has a logistics advantage. We can be the first city to show the rest of the U.S how to efficiently distribute locally-grown food from many small farms and even backyard plots to local consumers and businesses. This is the biggest barrier right now for local growers.

Local growers have no voice in the world of distribution and food production. It’s the massive distribution systems that have stripped returns away from small farmers. With the formation of a non-profit distributor that reinvests its service fees into interests of the farmers and local businesses, we can be a community that recaptures our local agricultural based economy.

Awhile ago, we spoke here about Memphis branding itself. This could be our brand – the first city to incorporate the little guy and to rebuild a new oil-independent food economy. In fact the brand is already ours, check out the Shelby County seal.

It says “Agriculture: Commerce.” Perhaps that seal is not such a relic after all.

Are we ready for LocalEx? I am ready, let’s do it!