The Economist on how ethical food isn't

Local food, organic food and fairtrade food. They all sound good don't they? They are part of the mantra of the Greens. The idea behind each of them is:

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Local food is "better for the environment" because transport is "bad" for the environment, and it also appeals to the inherent positive communitarianism of the Greens, and the socialist xenophobia;

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Organic food is "better for the environment" and "healthier" for you because it doesn't involve "artificial chemicals" (because, apparently, natural ones are benign, you know, like snake venom) and it is better for the environment because of it; and

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Fairtrade products are "better for society" because you are paying a lot more for a commodity, ensuring the producers in developing countries get more money and be wealthier. In other words, it is about paying people on very low incomes more for what you buy off them.

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In the childlike world of simple platitudes this all sounds very good and plausible. In fact, as the Economist reports this week with its cover article, most of this is about feeling good, rather than doing something constructive. When examined more closely, applying any one of the "local food, organic food, fairtrade" labels to something may either be a waste of money, or worse, counterproductive to what you actually want to achieve.

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The local food argument has already been blown out of the water by the Lincoln University study and a separate report by the UK Department for Environment, Food and Rural Affairs which also says that there is less environmental impact importing tomatoes from Spain during winter, than growing them in heated greenhouses in Britain, and that half of the UK food vehicle miles are consumers driving to and from shops. This means it is better for food to be distributed from large supermarkets than people driving further to multiple smaller retailers. The NZ Greens have thankfully taken these finding and have written to their UK counterparts. So the local food argument is extremely dodgy, not helped by the massive protectionism for European agriculture under the Common Agricultural Policy. Removing this distortion would do far more for the environment (and lower food costs, and taxes in Europe) than any campaign for food miles, which is actually counter productive. Quite simply, the local food argument is a combination of misguided environmentalists and old fashioned trade protectionists. The UK farm lobby is in favour of it for old fashioned reasons, it helps them keep their prices up because people think they are helping the environment, when, much of the time, they are doing the opposite. You see, transport costs are only a small proportion of the energy used in food production.

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However, while the NZ Greens appreciate this, they remain wedded to the latest money making enterprise of the food industry - organic food. The Economist quotes a number of researchers who counter claims that organic food is better for the environment. These come down to:

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- Organic farming produces lower yields and requires much more land to be cultivated to produce the same amount of food. Dr. Norman Borlaug, an agricultural scientist, argues that environmentalists argue from the comfort of living in prosperity and is quoted saying "If they lived just one month amid the misery of the developing world, as I have for fifty years, they'd be crying out for tractors and fertilizer and irrigation canals and be outraged that fashionable elitists back home were trying to deny them these things". He points to how global cereal production tripled between 1950 and 2000, but the land used increased by only 10%;

- Anthony Trewavas of Edinburgh University argues that organic farming uses more energy, because instead of fertiliser and pesticides, weeds are kept at bay by frequent ploughing and other energy intensive techniques;

- There is no evidence that organic foods are healthier or non-organic are less healthy.

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Organic food may, at best, be a good choice on the basis of taste and quality. Certain foods may be tastier and more enjoyable because of how they are produced. However, this is not simply an organic matter. Indeed there are big differences between non-organic food produced in Europe and that produced in Australia and New Zealand in some cases, if simply because subsidies in Europe encourage far greater use of fertilisers and pesticides than down under. Nevertheless, it is also clear that the word "organic" has become a useful tool for food sellers wanting to put a premium on their products based on perception rather than reality.

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Fairtrade food is a bigger con. While sometimes local food may make sense, and sometimes organic food may be more enjoyable, fair trade is entirely counterproductive.

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The concern is that low prices are "unfair". Well they are not. Low prices exist because not enough of a product is being sold compared to what is being produced. They are a signal to stop production and move to something more profitable. Fairtrade buyers guarantee price floors for producers and pay a guaranteed premium over the market price with the benevolent notion of encouraging producers to develop their families and communities. Unfortunately it also perpetuates production and may increase production of commodities that are already oversupplied. If Fairtrade coffee demand increases, more will be produced, reducing the price for the rest of the coffee market making those producers poorer. The fundamental problem is that too much coffee is being grown - paying more for it EXACERBATES that. It is basic economics. Some argue that the high price enables them to fund diversification, but the Economist points out that there is hardly much incentive to diversify away from something paying you such a premium!

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Fairtrade certification also often is available to small co-operative producers, not family owned firms or plantations because the certifiers can't guarantee the workers get the premium. In other words, it is also about changing the corporate form of producers, which may shut out many workers who cannot afford to get into a co-operative (the most poor).

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However, the biggest argument is that it is wasteful. Fairtrade retailers see buyers as premium purchasers prepared to pay extra, when one economist calculates that 10% of the premium paid for Fairtrade coffee gets to the producer, as everyone else in the chain gets their cut. People pay more for it so those selling take advantage of it - meaning, of course, there is less money available for people to spend on other goods and services.

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There is room to do more research on this, but it is clear that the words "organic" and "fairtrade" are potentially a major ripoff of consumers that does little for what is claimed. They are not necessarily healthier and does not benefit the environment, or producers in poor countries - as it encourages them to produce more of what people don't want. It is economics rubbing against good intentions, and as is almost always the case, non-evidence based slogans might make you feel good, but they wont do you, your wallet, the environment or the world any good.