Local purchasing

On the national level, the equivalent of local purchasing is import substitution, the deliberate industrial policy or agricultural policy of replacing goods or services produced on the far side of a national border with those produced on the near side, i.e., in the same country or trade bloc.

Before industrialization and globalization became widespread, there were so many incentives to buy locally that no one had to make any kind of point to do so, but with current market conditions, it is often cheaper to buy distantly-produced goods, despite any added costs in terms of packaging, transport, inspection, wholesale/retail facilities, etc. As such, one must now often take explicit action if one wants to purchase locally produced goods.

These market conditions are based on externalized costs, argue local-economy advocates. Examples of externalized costs include the price of war, asthma, or climate change, which are not typically included in the cost of (for example) a gallon of fuel. Most advocates for local economics address contracting and investment, as well as purchasing.

Agricultural alternatives are being sought, and have manifested themselves in the form of farmers' markets, farmed goods sold through the community cooperatives, urban gardens, and even school programs that endorse community agriculture.

Rationale for local purchasing

Advocates often suggest local purchasing as a form of moral purchasing. Local purchasing is often claimed to be better for the environment and better for working conditions. Others contend (with empirical evidence) that local purchasing and contracting enhances local job creation and wealth while strengthening community cohesiveness.

The first potential moral benefit is environmental: Bringing goods from afar generally requires using more energy than transporting goods locally, and some environmental advocates see this as a serious environmental threat. Transportation contributes to environmental contamination in addition to the pollution caused by chemical inputs in the growing phase. Of course, locally produced goods are not always more energy-efficient; local agriculture or manufacturing may rely on heavy inputs (e.g., industrial agriculture) or energy-inefficient machinery and/or transportation systems. However, small-scale growers tend to be more environmentally friendly because industrial-sized agriculture uses genetically modified crops, monoculture production, and chemical fertilizer-intensive processes to grow crops—practices that local farmers typically avoid.

The second potential benefit is creating better working conditions. Nonetheless, while diverting purchasing from developing countries to local farmers helps build the local economy, it can lead to worse conditions for poor farmers in developing countries because it removes potential buyers from the market.

For communities, spending at local independent businesses also generates more jobs and wealth in the local economy compared to spending at absentee-owned businesses, including corporate chains.

The goal of localisation is to reduce unnecessary transport, support entrepreneurism and to strengthen and diversify community economies. This calls for condensation of agriculture and supports the idea that local farmers are capable of sustaining a community.

The term “Buy Local” has become subject to varying interpretations. While leading advocates of local independent business such as the American Independent Business Alliance say the term should apply only to locally owned independent businesses, some campaigns run by governments and chambers of commerce consider "local" to be merely a geographic consideration. Additionally, many corporations have manipulated the term in ways critics call "local-washing".