For the past week, I had the chance to visit Iceland. Despite all the rain and wind, I appreciated my visit. The country is very beautiful: Wild nature that’s unhabitable, friendly people, naturally heated pools everywhere…

Unfortunately, prices are also prohibitively high, especially for food. The cheapest items on the menu, except for drinks, are at least $15, be it soup or an appetizer. How can that be?

According to what I read around me, it’s because Iceland is a locavore paradise. Indeed, their famous yogourt brand (Skyr) is advertised as being produced by “one of the 700 family-owned farms”. Now, I don’t have anything against such production; on the market, people are free to buy from whomever they want.

My problems come when it’s the only choice there is. Considering that Iceland is a polar country – the capital Reykjavik is at 64 degrees of latitude, less than 300 km from the Arctic circle – having such protectionnism for agriculture can only make people poor as production costs are much higher than a country like France. Since most of the island doesn’t have the proper conditions for living, precious land is wasted for small-scale agriculture that would probably be unprofitable on the world market.

I say probably because there are always people ready to pay a quality premium. I mean, would you imagine high-ranking politicians or business people buying their suits and shirts at Wal Mart rather than, say, Joseph A Bank? The same think apply for food; given the choice, there would still be Icelanders who would pay a higher price for locally-produced Skyr.

However, letting the government choose on behalf of the people where the food is to be produced is giving in to the candle makers. Just like energy producers in Bastiat’s most famous satire, Icelandic farmers want to bar foreign competition so their business can be saved. They have been successful… at the expense of getting one litre (a little more than a quart) of milk for $1 – in Idaho, the gallon (a little less than four litres) is $2.

So next time you hear people pleading to get everything “local”, ask yourself if you want to increase your grocery bill exponentially. Also ask yourself if you want to dress like this, from the lack of getting things from “too” far away.

 

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