However, local enterprises face problems related to diseconomies of scale and this has forced them to charge higher prices which the lower and middle income classes cannot afford. There are instances where the local governments have had to intervene by subsidizing their operations something that has worsened the citizen's tax burden. Proponents of buying local have posited that buying locally made goods enhances velocity of money arguing that the currency will circulate more quickly and pass through more hands. Consequently, more people will have the benefit of that money and what it has purchased for them (Schwartz, 2009). Buying local as opposed to chain stores means more money will be put into the community.
However, quality of products and prices charged cannot be substituted with velocity of money. It is good when money flows in the local economy but no body in his right senses can buy an extremely expensive good or a low quality commodity with an intention of sustaining the flow of money in the economy. A proactive approach of ensuring that money flows in the local economy is by creating a local currency that is accepted by more than 600 businesses in the region (Schwartz, 2009). This will encourage spending as opposed to preaching the buy local ideology. This system has been tried in other places like the Lake Chiem area in Germany where a local currency known as Chiemgauer, equivalent in value to Euro was introduced (Schwartz, 2009).
The "buy local" mentality has veered off its intended path of gaining sufficient resources and is now posing the danger of promoting parochial image of traditional rural ideals in the context of localized food. Local food production denies many sectors job opportunities especially the upstream supply industry and the downstream transport, packaging, and processing businesses (McGinnis, 1999). Supermarkets and major stores are more likely to experience losses of jobs to local economies if the idea of buying local is put into practice. The workforce that these stores and supermarkets employ cannot be absorbed into the local enterprise sector (Cranbrook, 1997). Local enterprises grapple with problems of energy efficiency because their unit cost of conversion of energy is very high. The issue of energy efficiency can only be addressed when these enterprises start using renewable sources of energy.
Local food production has from time immemorial grappled with problems related to pathogenic bacteria and food poisoning. Their resolve to reduce the burden of pathogens and adhere to hygiene regulations has resulted into added cost burden to those who make use of such products. Hygiene regulations and food poisoning aside, local enterprises have also had some problems with policy legislations especially those that encourage regionalization and localization of food systems that can result into positive sum gains. Researches should be conducted to enable people to understand the full costs and benefits of alternative food systems.
Buying locally stifles international trade. Through international trade one gets to sell something that he doesn't need and buys something he needs. Through trade jobs are created, local and international investments are attracted, new technology and materials are attracted, the bigger population gets guaranteed of wider choice in products and services. They spend, save, and pay taxes with the money they earn from their jobs. The taxes are used by the government to provide essential services like building of infrastructure where more job opportunities are created. People's savings are used by the capital markets to lend money to others who may in turn open up business opportunities where many more will get employed. Concentration on strengthening locally owned enterprises costs the economy a lot of job opportunities that the local enterprises cannot offer. The citizens will have to pay higher taxes and higher interest rates.
Multinational corporations make use of new technology and materials one thing that local enterprises do not do hence their diseconomies of scale. The new technology makes business enterprises to be competitive and profitable. Buying locally made products means encouraging growth of companies that do not make use of appropriate technology. Such companies are more likely to produce goods that are not competitive because of their poor quality (Smit & Ratta, 1995). Quality can be guaranteed when local business enterprises create machines that work better, faster, and cheaper something that they cannot afford to do because of diseconomies of scale.
Buying local is a threat to the existence of multinationals and to a larger extent international trade which offers diverse products and services which has turned the world into a giant market that delivers diverse products and services. Products that are sold by local enterprises are not as diverse like those that are offered by these multinationals which offer wide range of goods and services to domestic markets (Smit & Ratta, 1995).
The buying local has gained currency in recent times and this has partly been attributed to celebrity personalities like the First Lady of the United States who has publicly endorsed it. It is for fact that many will therefore engage in local food production. The major challenge would be how to engage in sustainable agriculture where natural and social resources are sustainably used without destruction of the environment (Smit & Ratta, 1995).
Most local farmers who engage in local food production do not have resource conserving technologies that can allow them to protect the landscape and its natural resources for the future generations. There are those who express their connection with nature by visiting it, by joining organizations, and by eating the food. All these will not be realized if the landscape is not sustainable made use of especially when everybody rushes to the local areas to part of the food producing community. There would be no more nature walks, wildlife conservancies, and even botanical gardens (Smit & Ratta, 1995). The levels of greenhouse gases emitted into the environment will shoot up to the detriment of the ecology of the rural areas. Individuals working in organizations that protect, conserve, or regenerate aspects of nature will be left without jobs in the long run.
Cranbrook, C. (1997). The Rural Economy and Supermarkets. Suffolk: Great Glemham.
DeWeerdt, S. (2013, Jun. 22). Is Local Better? World Watch Institute.
McGinnis, M .V. (ed). (1999). Bioregionalism. London and New York: Routledge.
New, C. (2012, Sept. 18). Made in America Is a Luxury Label That Will Cost You. Huffington