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Local Food Economics

     Does Local Cost More?

     Forms of Payment and Record Keeping


The two major factors that determine local food purchasing are how much local food is really available and how much money the school is willing to set aside for local food expenditures. Many institutions that consider buying local are reluctant to do so given the common misconception that local food sourcing is more expensive than industrial food sourcing.  Yet this doesn’t always have to be the case. Institutional buying power helps to maximize our local food investments. Furthermore, in a local food system where everything is fresher and of higher quality, both the chefs and the students are less inclined to waste food.

An integral part of any food system, local or conventional, involves obtaining the food and then paying the suppliers for it. There are two payment systems that Kenyon uses regularly: an accounts payable system and petty cash. The petty cash transaction is unique to the economics of a local food system. A petty cash system is most often implemented for our smaller or less frequent purchases, or if our vendors simply prefer to be paid in cash. For a petty cash system to truly work, a shift in the conventional paradigm for institutional accounting is essential. Local food economics requires meticulous record keeping and steady organization. Flexibility and adaptability are essential. Whoever is in charge of the institution’s local food accounting must understand the nuances of the market and have an organized system of record keeping. Excel spreadsheets or databases work nicely.

Pricing for our local products is usually dictated by what the market will bear. Local produce is often cheaper than conventionally sourced produce, while other products, such as honey, are more expensive to produce locally because of the labor involved that cannot be absorbed by an economy of scale, and because we want to offer the producer a fair price.

It’s important to know the market in the area, because the college has to offer competitive prices so producers will choose to sell to us instead of at auctions and to other buyers. When determining fair prices, we must account for the high quality of products and the fact that they are locally, naturally raised. Because markets vary so much by area, institutions will have to determine the pricing process that works best for them, considering their demand and the market in their area. Institutions that want to buy local foods must also be willing to pay extra for the higher quality product they receive.

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