Local production: The other side of the coin

Years before the World Commission on Environment and Development coined the phrase “sustainable development” in 1987, Wendell Berry was talking about how to live sustainably. As a renowned author, a farmer and an activist, he has lived and taught his vision of a good life, based on sustainable agriculture, appropriate technologies and strong community.

Berry believes deeply in the interconnectedness of livelihood, neighborhood and nature — and understands that only a local economy could maintain a harmonious relationship among the three. When communities control their own economies, they can ensure, without abusing the environment, that their real needs will be met.

Today the idea of local economy has become a growing global movement to build a saner and more sustainable world. Increasingly, people are waking up to the simple truth that “local” matters — the best way to help out their economy is by keeping it as local as possible. This is not merely wishful thinking: For decades, local economic development specialists have been practicing this core concept — the more money circulates, the better it is for the economy, and when it circulates locally, then the benefits are multiplied.

Consumers have been quick to respond. “Buy Local” campaigns have blossomed across the country, and consumers are consciously selecting local goods and services over nonlocal ones. While this is a good beginning, the full potential of a local economy has yet to be realized.

Producing locally: the next step

There are two sides of the local economy coin.

One is local purchasing. When consumers and businesses purchase from locally owned businesses or invest their savings in local ventures, a larger percentage of that money will continue circulating in their cities and regions.

The other side of the coin represents local production. Without making our own products, our locally spent money leaks out of our communities whenever we buy imported goods and services. Whether it’s a chain store, franchise or even a locally owned business, if it is selling imports,then its investment capital and profits are flowing out of the area to suppliers or corporate headquarters somewhere else.

The above graph shows how different business models influence the multipliers in our economy. Ideally, a business that hires locally and pays good wages, produces or sells local products and invests and donates in the community is maximizing the money circulation in your area. If it’s an employee-owned business, like a cooperative, then there is a greater chance that the business will stay local, pay better and provide more job security. Of course, any economy today will have an assortment of businesses. The challenge is to intentionally increase multipliers by assisting new or existing businesses to become more local.

Growing local production in WNC

How do we build up a sustainable, local production?

There are several ways that economic developers help new and existing businesses become more localized and multi bottom-line. First, they improve access to information, technology and capital. Second, they build relationships and networks among businesses in order to increase the purchasing of supplies locally. Third, they assist local producers to market their goods and services. Fourth, they can develop clusters or “value chains” in targeted sectors, such as food, health care or textiles. This entails linking or creating local enterprises within a specific sector to ensure a smooth flow of interactions among producers, suppliers, distributors and retailers.

Here are some of the organizations building capacity for local production:

The Asheville-Buncombe Economic Development Coalition maintains a close relationship with manufacturers, helping them access resources, resolve bottlenecks and connect with local supply sources. It has instituted the E3 Forum (Economy, Energy and Environment) to create a space where businesses can share best sustainable practices, such as how to become a zero waste-to-landfill facility.

The Appalachian Sustainable Agriculture Project has created a branding logo for local farm products called Appalachian Grown, which helps local farmers market their products and allows consumers to recognize and select local production. Local farmers can get certified for free and then have access to a variety of promotional materials.

AdvantageWest, a nonprofit regional economic-development organization that serves the 23 westernmost counties of North Carolina, brings together technology, capital, entrepreneurs and green thinking to incubate new local production companies, such as Organicel. Given the exponential growth of the breweries in this region, there was an opportunity to recycle the spent grains that are a byproduct of beer production. Partnering with the botanical-research nonprofit Bent Creek Institute, AdvantageWest began to incubate a new company — Organicel — that would extract the cellulosics from the spent grains for use in the production of a number of other products (such as pill capsules for our emergent natural-product industry) and sell the remaining protein-dense meal to livestock farmers.

Local Cloth networks the large number of talented fiber artists in our region with the hundreds of local farms raising fiber animals, such as sheep, goats and llamas. Through educational workshops and forums, promotional events and networking opportunities, Local Cloth has been helping farmers, natural fiber merchants and fiber artists connect with each other to grow a local, craft textile industry.

Rural Support Partners promotes value- chain development with rural economies. Value chains take a comprehensive approach to economic development, incorporating not only the usual players of a supply chain, but other related public agencies, educational institutions, community organizations and business sectors as well. Value chains are responsive to community needs and consumer demands and are based on values of collaboration and triple bottom-line (social, economic, environment) business. A good example of its work is the Carolina Textile District (CTD) in Burke County. The CTD provides a supportive one-stop shop that helps entrepreneurs connect with local textile businesses for all their production needs, including testing, sourcing, design, tagging, production and marketing.

Ownership Appalachia was inspired by the Evergreen Cooperatives in Cleveland, Ohio. The Cleveland model demonstrates how an import substitution approach can be used to develop worker-owned cooperatives, which gives residents of low-income communities a chance to own their own businesses. Harnessing the purchasing power of anchor institutions, such as hospitals, universities and large public agencies, the Evergreen cooperatives supply essential goods and services to meet existing demand. Ownership Appalachia has recently begun discussions with local institutions for developing a cooperative incubator in this region.

It’s time to put our economy back on its feet. Right now we are standing on our heads, and all the money is falling out of our pockets and rolling away. We need to stand right side up and become more self-reliant and productive. Buy local and produce local. Then our dollars will work for us to create a dynamic local economy that builds prosperity for all.

Howard Nemon is the director of the Center for Local Economies and is currently involved in developing Ownership Appalachia.