Does growing your own food make economic sense?

Worried about the rising price of food? Tom Bulford investigates the economics of growing your own. Allotments have long been popular and now only cost around £20 a year. So, should we start ‘Digging for Victory’ again?

Should I have an allotment? This is the big question in the Bulford household. My wife, fresh vegetable lover that she is bless her heart, is all in favour. My children, who have never heard the saying all a gardener needs is a cast-iron back with a hinge in it' and would like to see me out of the house, are keen too.

But much as I enjoy a potato with the mud still on it or a leek nourished by Oxfordshire soil, I am an economics man. Does this make financial sense, I ask myself? Forget the health benefits of fresh air and the energetic wielding of spade and trowel. Forget the joys of organic vegetables which if I am perfectly honest often taste worse than the chemically-enhanced supermarket variety. The question is could I be earning more by digging and hoeing, and planting and harvesting than I can from sitting here at my computer?

Growing your own food: finding the plot

And if I can, can I actually find a nice little plot nearby? Because I gather that allotments are in demand again. The last time this happened was in the 1970s, inspired by Tom and Barbara in The Good Life.' Now the inspiration comes from other quarters. It comes from that magical mystical word organic', from the back-to-nature appeal of pottering around outdoors and, no doubt, from our soaring supermarket bills.

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Those are today's motivations but allotments have been popular in the past for quite different reasons. They date back to the sixteenth century when rich landowners began to appropriate common grazing land. Cottagers were given small allotments of land in compensation. This trend accelerated in the eighteenth and nineteenth centuries, leading to the General Enclosure Act of 1845 which, in a move to head off social unrest, required Commissioners to provide field gardens' to the landless poor.

By this time many rural dwellers were heading for the new towns and cities of the industrial revolution. Housing conditions were poor, the demon drink a constant temptation, and urban allotments were considered to be a way of keeping people out of mischief and of course heading off starvation. But it was in the two world wars that allotments really showed their value.

Growing your own food: the World Wars

The First World War saw an increase in the number of allotments from 600,000 to 1,500,000, many on land owned by the railway companies. World War II saw the famous Dig for Victory' campaign. German U-boats prevented food supplies from reaching Britain, so men and women rolled up their sleeves and set to. Almost one ton of food was produced per year from each plot, a vital contribution to the war effort.

Allotments remained popular after the war, but once food rationing came to an end the numbers went into decline. Many allotments ended up as building plots, and in the last thirty years more than 200,000 allotments, covering an area of eleven square miles have been lost. Now though there is a revival of interest and some allotments have ten year waiting lists.

Only £20 per year

So should I put my name down? It certainly does not cost much - perhaps £20 per year for a quarter acre plot. And, as an economics man, it makes good sense. Here are my calculations. Today I checked out the price of root vegetables in Sainsbury. Carrots: 72p per kilo; potatoes, 52p per kilo; onions 72p per kilo; parsnips (my favourite!) £1.90 per kilo.

Let us stick with these. They are easy to grow. They cannot get pecked by birds or rot on the vine. Let us assume that I achieve World War II levels of productivity and produce one ton of vegetables split between these four. That's 250 kg of carrots; 250 kg of potatoes; 250 kg of onions; and 250 kg of parsnips. I would have to pay £965 to buy that lot from Sainsbury.

So from a financial perspective it looks like a no-brainer. And I could enjoy vegetables free from contamination or genetic modification. And I could enjoy fresh air and exercise. And I could potter around on a sunny summer's day listening to Test Match Special. And my wife would love me forever.

What a pity I am so lazy

This article is taken from Tom Bulford's free daily email Penny Sleuth'

Tom worked as a fund manager in the City of London and in Hong Kong for over 20 years. As a director with Schroder Investment Management International he was responsible for £2 billion of foreign clients' money, and launched what became Argentina's largest mutual fund. Now working from his home in Oxfordshire, Tom Bulford helps private investors with his premium tipping newsletter, Red Hot Biotech Alert.

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