Henry Leveson-Gower looks at how local food currencies might bear fruit.
Our food system is deeply dysfunctional. Economic forces drive it to deliver unhealthy food, while trashing the environment so it poisons people and planet. Even though the food is cheap, many people are still left hungry, as footballer Marcus Rashford, has so effectively highlighted. These, in a nutshell, are the conclusions of Henry Dimbleby’s National Food Strategy, an independent review commissioned by the government and published earlier this year.
Dimbleby is optimistic about the potential for change given the saliency of food poverty issues during the pandemic and the changes in post-Brexit agricultural policy. However his topline recommendation to institute a Sugar and Salt Reformulation Tax has already been rejected by the Prime Minister. This was also meant to provide some revenue to help the poor access fresh fruit and vegetables.
We will have to wait for the full Government response until next year. But maybe we shouldn’t hold our breath given the long history of government failure to act effectively on these issues. Most of the reaction to date to this dysfunctional system has come from the grass roots (see box) and there are no signs this is likely to change anytime soon.
Incredible Edibles, set up in 2008 by Pam Warhurst and Mary Clear in Todmorden, West Yorkshire, aims to create kind, confident and connected communities through the power of food. It now has hundreds of groups across the UK learning about food, galvanising communities through growing and celebrating local food, and supporting a local food economy.
There are many other local initiatives such as The Larder in Preston which has a mission to create food fairness for all with food education, a café and a local food hub providing affordable and delicious fresh food direct from local farmers and producers.
Local food systems based on providing healthy, sustainable food, while growing, remain tiny in comparison with the national food system. Furthermore the cost of local food can exclude those who are food poor. Lynne Davis argued in a previous issue of our magazine that better digital systems could make local systems more efficient.
Here I argue that local food currencies (see box), backed by local government, could both build local food systems and make them accessible to the food poor. So how might this work?
It would be issued by local government or other organisations backed by local government as a benefit top-up for the food insecure, a return on community municipal investment in local ecological regeneration and in return for pounds sterling. It would operate via a smart phone app that would record payments, receipts and your balance, similar to Apple and Google pay (reconditioned phones could be given to food-poor families without them).
Only registered local food producers would be able to change the currency back into pounds sterling, probably at a small reduction in value to discourage such conversion. To register, food producers would also have to demonstrate a level of environmental performance which could be increased over time.
Shops, market stalls, farm shops, cafes and restaurants, that sell local produce or food with locally sourced ingredients, would be encouraged to accept the currency on the basis that this would increase their custom. This in turn would drive demand for local produce.
The stakeholder co-design, naming and marketing of the currency will be important to ensure local support and ownership. So for instance, we have proposed to create a Land And Nature Currency (the LANC) in Lancashire so the marketing blurb almost writes itself. The aim would be to make the use of the currency a matter of local identity and a demonstration of care for the local environment.
In many ways, this is just an evolution of food vouchers for the food poor. The leading example in the UK has been run by the Alexandra Rose Charity since 2014 with over £1m worth of vouchers redeemed to date. Inspired by US food stamps, the charity issues them to families with children under five and pregnant women, giving them out via local children’s centres in various parts of the UK. They are funded by local authorities, corporate sponsors, and individual donations.
The potential for stigma relating to food vouchers is real.
Local food currencies could build on this model providing a number of advantages: they are likely to avoid the potential stigma of food vouchers, cost less and grow the local food economy.
The potential for stigma relating to food vouchers is real. In the US many who are eligible for food stamps do not collect them due, in part, to the stigma. A local food currency, however, could be designed to have an image based on supporting the local food economy and environment, appealing to all sectors of society and so avoid association with the shame of poverty.
A local food currency should cost less than food vouchers. The creation and acceptance of the currency could be managed so that much of it continues to circulate rather than being converted back into pounds sterling and becoming a cost to the local authority. This will mean managing money supply and demand, which will grow as the local food economy grows driven by the local food currency. Supply growth could also be facilitated by local action to create local food hubs and farmers markets.
Food producers themselves will make the decision as to whether to spend or convert the currency they receive. Standard farming business models tend to be capital and input intensive with limited potential to spend the local currency on business expenses. However regenerative agriculture models are designed to reduce inputs while increasing labour costs, which potentially could at least be partly met with a local food currency. Hence promoting a transition to regenerative agriculture could effectively reduce the cost of addressing food insecurity. Local governments could also accept the currency as at least part settlement of council business taxes which should increase as local economic activity increases, driven by the currency.
Clearly how this will work in practice, is complex and will depend on a range of factors. Managing seasonality is going to be particularly challenging. We are proposing to use Steve Keen’s Minsky Model working with Cambridge Econometrics and their expertise in local data, to explore the costs and benefits of a local food currency in Lancashire, prior to piloting it.
Championing this idea in the same year that the Bristol Pound, once the leading UK local currency, is wound up after ten years does beg questions. Doesn’t this suggest that local currencies are a failed experiment?
This approach to local currency design is, though, very different to the Bristol Pound. The Bristol approach was to encourage the local community to use the currency for local transactions to keep economic activity local. That required supporters to make a positive decision to use the currency. It made quite a big ask of its supporters, as well as suffering from a range of limitations due to the technological and regulatory environment at the time of its creation.
The food poor and investors in local environmental regeneration receive the currency.
The approach of a local food currency is that the food poor and investors in local environmental regeneration receive the currency. They then face the decision as to whether they use it or lose it. If you are food poor, you will certainly use it to get the food you need as the experience of food vouchers shows. And even if you are not food poor, loss aversion is a strong driver for action – probably the most significant bias discovered by behavioural economics. This effect could be reinforced by designing the currency to decay in value over time.
This model involves creating new money, an amazing power highlighted over recent years by Modern Money Theory and normally reserved for central governments. Generally it is a power that is jealously guarded. The classic example of this was in Austria in the 1930s in Wörgl. Inspired by the ideas of an Argentinian economist, Silvio Gesell, the mayor created a local currency during the worst of the 1930s depression. The currency successfully stimulated the local economy encouraging other local towns to follow suit. However these successful initiatives were squashed by the Central bank of Austria, which got it outlawed by its supreme court. It wasn’t going to lose its monopoly power over the money supply.
We would have to see how the Bank of England might respond to similar developments here. Such a power shift to local government could be seen as a key part of levelling-up. Hopefully it would be politically problematic for the Bank of England to literally take the food from children’s mouths by banning local food currencies.