The Rise of Food Miles

The recent popularity of the food miles concept can be attributed to several factors:

1. Increased trade in food; this has come about because of:
   1. Declining transport costs, new technologies, and lower tariff barriers; and
   2. Growing demand for out-of-season, processed (pre-packaged), and perishable products;
2. Environmental concerns, such as climate change;
3. A rise in protectionist sentiment in developed countries and a growing concern among farmers’ organizations about the impact of increased imports on local producers; and
4. Food security concerns caused by rising food prices

There is no doubt that international food trade has increased in recent years, along with trade in most other goods and services. Global trade in food products increased from $450 billion in 1995 to $739 billion in 2006 (United Nations Conference on Trade and Development [UNCTAD] 2008). However, transport costs have fallen over the long term, in spite of recent fluctuations of fuel prices.² Ocean freight rates for grain are around $20–35 per metric ton (t) for large shipments, perhaps 10% of the import price.³ A major factor in calculating transport costs is switching from one mode of transport to another, for example, from ship to rail or rail to road. Improved ports and large distribution centers have facilitated cost reductions; larger vehicles have also helped to lower the average transport costs by spreading fixed costs over a larger number of units.

Lower tariffs have further decreased the cost of delivering goods to the consumer. Average agricultural tariffs in the European Union (EU) and the United States (US) are now around 15% and 5%, respectively (World Trade Organization, International Trade Centre, and UNCTAD 2007). There has been a switch, in recent times, away from border measures (tariffs and export subsidies) to domestic support; this has been driven, in part, by international agreements such as the Uruguay Round, but also by numerous regional and bilateral trade agreements.

Consumers demand, or are prepared to pay for, out-of-season products such as tomatoes and oranges. International trade means that seasonal products can be made available for much longer periods, in some cases all year round. In general, expenditure on food as a proportion of income has fallen to around 10% in OECD countries (The Economist 2008), making food relatively cheap (although recent price increases represent a reversal of this trend—see later in this section). As a result, consumers perceive imported foods as less exotic and are, therefore, accustomed to buying food that has traveled large distances.

In the past couple of years, concerns about climate change have risen, and the focus of food miles has shifted from general environmental impact to carbon emissions more specifically.

Support for open markets (trade liberalization) has declined recently in OECD countries. This reflects concerns about stagnant wages, job losses, job instability, growing income inequality, and environmental degradation (Warwick Commission 2007). Some consumers feel that the purchase of locally produced products may address these issues.

The price of food has risen substantially in the past year, driven by increasing prices of primary (unprocessed) commodities. The international price of rice, admittedly a thin market, doubled in the 12 months to May 2008 to reach $963 per ton before falling back to $764 per ton in September (Food and Agriculture Organization of the United Nations 2008a). Commodity prices were driven up by increased demand from the People’s Republic of China (PRC) and India, decreased supply due to a shift away from food crops in favor of bio-fuels, droughts in some producing countries, and increased cost of inputs such as fuel, fertilizer, and pesticide. Primary commodity prices are only a fraction of what the consumer spends on processed foods such as bread, but nonetheless, higher prices encourage consumers to think about where their food is coming from. Indeed, some governments have voiced concerns about food security and the need to increase self-sufficiency. Taxes, and even bans, on rice and wheat exports encouraged this line of thought.

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