Community Money for Community Food

Community Currency for Community Food?

Can local currency help build a strong, complete and profitable local food economy in Vancouver?

The Problem

1. Food insecurity for the poor

The Greater Vancouver Food Bank collects and distributes food to over 25,000 people weekly.

Food insecurity is found to be evident in almost 50% of the lowest income population group in British Columbia (Statistics Canada, 2006) and is characterized by insufficient access to safe, affordable, nutritious, and healthy food.

Low income families and those on income assistance spend from 31 to 42% of their monthly income on food alone (Statistics Canada, 2006).

This is compared to an average British Columbian family of four who spends approximately 17% of their earned income on food (Statistics Canada, 2006).

2.Food insecurity for the general population

Local food production in Metro Vancouver represents less than 20% of its total food demand (Food Secure Vancouver – Baseline Report 2009). Grocery stores typically carry a stock that corresponds to 3 days of purchases.

What happens in the event of an emergency that hinders food imports into Metro Vancouver?

Oxfam estimates that food prices could rise by 70% by 2020, and could double by 2030. In a stagnant economy with stagnant wage growth, this risks plunging many more people into food insecurity.

3. Poor nutrition

Poor nutrition is linked with poor physical and social development, crime, learning difficulties, health problems including diabetes and obesity.

36% of adult population and more than 25% of children are overweight in Canada, 24.3% obese (Research Chair in Obesity, Laval University).

Over 1.8 million Canadians are diabetic (Statistics Canada).

4.Environmental impacts of imported food

According to FarmFolk CityFolk, the average North American meal travels 2400km to get from field to plate.

Agriculture and food now account for over a quarter of all goods transported on our roads, and food is the largest portion of air freight.

Most imported food is produced in carbon-intensive operations reliant on chemical pesticides, herbicides and fertiliser to maximise production.

In some parts of the world agriculture takes a huge toll on the environment as forests are slashed and burned to create new agricultural land.

The challenges of local urban food production

1.It’s difficult to make money as an urban food producer

Preliminary results of my survey of urban food producers show that earnings are estimated at $2-$10/hour, for an average of $3.86/hour.

That's right, $3.86/hour.

For comparison, minimum wage in B.C. is currently $9.00/hour.

A "living wage" for Vancouver is calculated at $18.81/hour.

This corresponds quite closely to a 2005 U.S. study of market gardens under 3 acres that found an average hourly wage of $4.96/hour.

So why do people even bother?

Preliminary survey results also show that people produce food because they find it rewarding, because it is their passion, in order to obtain fresh organic produce for themselves and to save a few dollars on groceries.

2. What are the challenges of growing food in the city and on a small scale?

Preliminary results of my survey show that the top three challenges facing urban food producers are:

a) It is difficult, time consuming and expensive to market what they produce.

b) It is difficult for food producers to tide themselves over outside of the regular growing season.

c) There is a high risk of production failure due to weather, pests, diseases, theft, etc.

Other challenges include a lack of access to land, the inability to hire needed help, and the inability to afford equipment or constructions that would help make their operation more productive.

A U.S. study of market gardens under 3 acres found that they averaged gross sales of $15,663/acre (although in some instances, returns of over $25,000 were achievable).

An acre is a lot of land in an urban context – that's 4046 square metres.

Here in Vancouver, you’d be lucky to have 50 square meters, or 0.012 of an acre, in your back yard.

Under an assumption of constant returns to scale, even at the higher end of productivity a market garden of 50 square meters might yield $300 in gross sales without intensive food growing techniques such as vertical gardening, greenhouses, aquaculture, etc. It is often difficult for urban food producers to obtain access to additional land to farm.

The U.S. Grower to Grower study also confirmed that it takes a lot of labour to run a small organic market garden – an average of 1957 hours/acre, and this figure rises the smaller the garden gets.

It can be difficult to find the appropriate and most profitable scale of production, maximizing investment in existing equipment without requiring expensive new equipment, and that allows a farmer to perform the work by his or herself without requiring expensive paid labour.

The Vancouver growing season may be long compared to much of Canada, but is short compared to places such as California where three quarters of our fruits and vegetables come from, and it lacks the heat to efficiently grow many types of produce. Boosting production substantially will require investment in greenhouses and other systems to warm the soil.

3. What are the challenges faced by other links in the local food economy?

Access to commercial kitchen facilities can be difficult or expensive for those who wish to engage in small-scale production of preserves, baking and other value-added food products.

One way around this is by selling the products in member-only underground markets, but this limits the market substantially.

The restaurant industry can be brutal, especially to newbies.

Restaurants serving quality food must compete with large fast food outlets with low costs due to industrial production of low-quality but addictive food using cheap labour and that employ expensive mass marketing to procure customers, often from a very young age.

Vancouverites are passionate and active around food production and food security. Urban gardening is experiencing a renaissance not seen since the 1940’s when Vancouverites enthusiastically embraced “Victory Gardens”.

Vancouver is home to hundreds of experienced gardeners and food experts of all sorts.

Myriad local food initiatives have popped up in Vancouver in recent years, many of them highly innovative.

There are already the beginnings of a local food economy.

Buying clubs like NOWBC and retail stores like Eternal Abundance try to source locally as much as possible.

Restaurants like Banditas Taqueria source much of their food, beer and wine locally, and rely exclusively on bicycles for transportation

The distance between producer and consumer is much lower for local food. That cuts back on food miles and middlemen and can enable local food producers to keep a much higher portion of what their produce retails for.

Food is one of the most localisable of all industries. It can be produced locally, distributed locally, retailed locally, served locally at restaurants and recycled locally.

A local food economy has many potential stakeholders and participants, from local food producers through retailers, restaurants, social and charitable institutions, schools, the City of Vancouver and numerous food security organisations.

Local food, local economy and food security are becoming sexy issues these days. A bold and innovative attempt to create a strong local food economy can capture the public imagination.

This is what a local food economy might look like.

So why doesn't it?

Simply put, our highly globalised, fossil-fueled economy does not provide much incentive for local economic patterns to emerge, especially when it comes to food. And part of the reason for this lies in our money.

What's money got to do with it?

Conventional money has three important characteristics:

• It is scarce
• It is highly mobile, precisely because it is scarce
• It is issued by central authorities and banks, who keep it scarce

Meanwhile, money is the lubricant of commerce.

No money means very little commerce.

There are two parallel but opposite patterns of movement in the economic world: that of money and that of stuff. No movement of money usually means no movement of stuff, and vice versa.

In a world of scarce, highly mobile money, the pattern that emerges is one in which money is diffused outwards, while stuff comes from away - usually wherever it can be had for the least money.

Is it any wonder that most of our food is coming from elsewhere, from places where it can be produced "efficiently" with minimal human labour but plenty of artificially cheap fossil fuels, chemical pesticides, herbicides and fertilisers, genetic modification, destruction of undervalued land and forest, and exploitation of the poor?

Conventional money has no inherent tendency to foster an integrated local economy in which local spending stimulates more local production and employment.

In addition, the scarcity of conventional money makes it difficult and expensive for local food producers, restaurants and retailers to obtain the credit they need to successfully launch or improve their operation. The result is a vital economic sector starved of the resources it needs to grow.

Furthermore, much of the need for food comes from people with little or no money to pay for it. In our current economic paradigm, such needs do not constitute "demand", because demand for a product must be backed up by money to pay for it.

To see something more like this, the nature of the money we use will need to change.

Fortunately, there is a model for changing the nature of money. We call it Open Money, and community currency.

The characteristics of open, community currency:

• It is not scarce, but sufficient, because it is first and foremost information, a means of measuring and keeping track. It can no more be insufficient to the needs of its users than a carpenter can lack sufficient inches for building a house.
• It is not universally acceptable, but only to a particular, self-defined community or network. This is what enables money to circulate around and 'round within the network instead of in and out.
• This is open-source money. Any group of people can create and use its own money for its own purposes once they understand its principles.

How could a local food currency help stimulate the emergence of a profitable, resilient local food economy?

Introducing "Seed Money" - a concept for a food-centred local currency designed to support the emergence of a significant, resilient, integrated and profitable local food economy.

1. As a local currency, Seed Money would promote the emergence of a new money-goods pattern of “’round and ‘round” to replace the current “in and out”.

• Restaurants, retailers and food processors using the money would have an incentive to source more from local food producers.
• Consumers using the money have an incentive to eat at restaurants and shop at stores that source food locally.
• Local food producers would be assured of a strong demand for their product, and can use the currency at local businesses, as partial payment for any staff, to make investments into their operations and to source inputs such as locally produced compost.

Every time Seed Money is spent, that money is guaranteed to be re-invested back into the local economy.

2. A Seed Money can provide a source of free or inexpensive credit to the local food industry.

Examples:

• The "Roland" local currency financing local organic farmers in Germany
• The Deli Dollar in Massachussets and Isadora's in Vancouver are examples of businesses financing themselves by turning directly to their customers and issuing their own scrips.

3. Seed Money can help raise funds and provide local, nutritious food to community service organisations working to address food insecurity, such as food banks, community kitchens, and community centres with food security programs.

4. Seed Money could help create green-collar jobs, Curitiba-style.

Curitiba is a city in southern Brazil that underwent a remarkable transformation starting in the 1970's. At that time, it was an impoverished Brazilian city characterised largely by sprawling favelas (slums).

In the 1970's, Curitiba's mayor Jaime Lerner initiated a green revolution by building a Bus Rapid Transit system, then offering people bus tokens in exchange for waste, including recyclables. Largely at the initiative of slum-dwelling children, the favelas were soon picked clean of trash, and the bus tickets helped their parents travel to jobs in the city.

Curitiba launched an ambitious waste recycling program. Today, Curitiba has the highest recycling rate in the world, at 70%. Car traffic has decreased by 30% despite a trippling of the population in a 20-year period, Curitibanos love their city and their average income is now 66% higher than the Brazilian average!

Could Seed Money help catalyse a Curitiba-style revolution in Vancouver, creating green-collar employment opportunities for low-income residents, for example by establishing a local food waste recycling program that feeds nutrients back into the local food economy?

What might a local food waste recycling program look like?

Small neighbourhood recycling bins shared by several households placed throughout the city.

An additional cottage industry may emerge to produce suitable composters for use by this system.

Green-collar workers (perhaps current or former binners?) work as waste recycling stewards in different areas of the city where they are responsible for the management of several recycling bins.

They will monitor the compost and possibly transport some to central depots where it can be transformed into high-quality compost and liquid fertilisers by such processes as vermiculture.

High-quality compost is sold and delivered to local food producers throughout Vancouver in exchange for Seed Money, $Cdn or a combination of the two.

Transportation of fertiliser would be as low-cost and sustainable as possible, perhaps using bikes with trailers.

Such a scheme might eventually be expanded to include other recyclables including human waste from compostable toilets.

How would “Seed Money” be created and circulated?

I envision two different, complementary means by which Seed Money could be issued.

In effect, Seed Money participants would be extending mutual credit to all members of the local food network, for use in commerce amongst themselves - bypassing the banks.

Seed Money participants, as well as any recipient of donated Seed Money, may also exchange any or all of their Seed Money with members of the public for $Cdn. For the businesses, this is an alternative method of inexpensive finance, and for non-profits it is a great fundraising tool. Members of the public will then spend their Seed Money at participating local food businesses.

2. The "Seed Bank"

At least in the initial stages of the currency, local farmers are likely to earn more Seed Money than they can themselves spend. They would have the option of depositing excess Seed Money in the Seed Bank, whose job it is to convert Seed Money into $Cdn by making exchanges with members of the public, businesses and foundations. Farmers can then draw $Cdn as needed, while the original Seed Money continues to circulate in the local food economy via its new owners.

People and businesses would be attracted to the purchase of Seed Money because it is a great way to support all of the good things that come out of a strong local food economy - cleaner air and water, healthier food, less CO2, more resilient and food secure local economies - while retaining buying power. For businesses, the purchase of Seed Stock can be a part of a corporate social and environmental responsibility policy - and can be used for corporate catering or business lunches to boot!

How would Seed Money be used?

Participating food businesses set their own terms of acceptance of Seed Money, which determines how much of it they may issue. For example:

• A restaurant may agree to accept 50% Seed Money in payment for all meals, or 100% for special "local dishes".
• Retailers may accept payment in Seed Money for locally-sourced products that it sells.

Non-profits may use the Seed Money that is donated to them to obtain local food from participating food growers, retailers, restaurants, etc, or they may exchange them for federal dollars with their supporters.

How would the Seed Money development effort be paid for?

The Seed Money development group may charge an induction fee - in Seed Money - to new participants. The development group can exchange this Seed Money for $Cdn with supporters of the initiative to cover cash expenses.

The attractiveness of Seed Money from the point of view of Vancouver's Greenest City goals may make it eligible for grants, but will not be reliant on grants and can pay its own way with the support of the community. Start-up costs will be minimal, especially if the initial scope of the project is focussed on a few neighbourhoods (eg. the Downtown Eastside and Strathcona).

Seed Money: Beyond food

By beginning with local food, Seed Money starts at an economic core that is both essential and localisable.

Everyone eats, therefore food serves as an input into all human endeavours. A local food economy has good spinoff potential to involve other sectors of the economy.

Investments in local food production will require the production of appropriate equipment and constructions. Local food requires local transportation. All of this can form part of the local economy.

Art - food for the soul - is even more localisable than food for the stomach! Local artists face similar challenges eaking out a living in competition with mass produced, imported art. Could artists and foodies team up - a "feed the starving artist" alliance?

A local currency like Seed Money isn't the only thing that can help build a strong and profitable local food economy.

It should be part of a larger strategy including:

• A web-based system to connect urban farmers with their markets - and with opportunities to farm more land.
• An insurance scheme to help urban farmers mitigate risk.
• A thorough study of the most appropriate technology and techniques for the most effective possible food production in Vancouver.
• Programs to help incubate new local food businesses, such as Save-on-Meats' incubator kitchen.
• Efforts to promote local food and recipes prepared from locally available food to the general public.

What's next?

I am working on making this idea a reality in Vancouver! If you would like to be a part of it, please contact me at jordan@agorabora.com!

Or subscribe to my mailing list to stay in the loop: http://eepurl.com/jwwx1

The Solution

It is clear that for a resilient local economy, we need to see something more like this.

Consumers with Seed Money may use it just like federal dollars at any participating business. They may obtain Seed Money by:

• Purchasing it from the Seed Bank, a non-profit to which Seed Money has been donated, or one of the participating local food businesses. Many citizens may purchase Seed Money simply out of a desire to contribute to a stronger local food economy or to offer financial support to their favourite non-profit.
• Receiving it as a bonus or compensation as an employee of a participating business.

Food waste recycling workers may be compensated for their work in different ways depending on their tasks. The compost collectors may be compensated based on the quantity and quality of compost that they bring to the depots, while those working at the depot may work on an hourly or profit-sharing basis. Compensation may be in a combination of food currency and conventional cash.

1. Issuance by productive participants

Food producers, restaurants, retailers etc. can issue a certain amount of Seed Money in exchange for agreeing to honour Seed Money in their businesses. The extent to which businesses can accept Seed Money in lieu of $Cdn reflects the extent to which its inputs are local or can be sourced from other local Seed Money participants.

They can use this Seed Money as a form of free credit for their own operation, or they can donate all or part of it to a non-profit community food initiative.

As in Michael Linton's Community Way model, the amount of Seed Money issued by each participant is accompanied by a committment to re-absorb at least that amount back into their business.

Why aren't these problems being solved with increased food production closer to where the majority of the population lives - in cities?

Seed Money in a larger context

Here in Vancouver, you’d be lucky to have 50 square meters, or 0.012 of an acre, in your back yard.

By Jordan Bober

Grocery stores can be profitable businesses if properly managed, but they have high start-up costs and usually deal with thin margins that require volume sales.

Smaller, independent and locally-owned grocery stores face growing competition from gigantic retailers who import goods cheaply, use their might to press down prices, and usually pay far less in taxes by locating on cheaper and industrially zoned land.

The Potential

Save-on-Meats is growing organic vegetables in a roof-top greenhouse heated by biodiesel generators using recycled restaurant oil, and has an incubator kitchen where DTES residents with food ideas can create food products that may then be retailed in the store

SOLE Foods is not only producing local food in an old parking lot, they are creating employment and training opportunities for DTES residents.

There is high demand for local and organic food in Vancouver - birthplace of the 100 Mile Diet.

Indeed, everyone who eats has a stake in our food system. And food constitutes a vital input into every conceivable human activity, and every sector of the economy.