On Election Day, California Dodged A Bullet

Last Tuesday, Californians voted on Proposition 37 to determine whether or not food companies had to label their products as genetically engineered. Luckily, the ballot measure was defeated. Proponents of this legislation rallied under the banner that the consumer has “the right to know.” However, “the right to know” would have come at a cost—a pretty big cost too, as it turns out. California dodged a bullet.

Genetically engineered foods are extremely common on grocery store shelves. It has been estimated that 85-95% of all corn and soybeans grown in the United States are genetically modified.  Because of the prominence of high fructose corn syrup and soy in the industrial food chain, a high percentage of processed foods contain genetically modified ingredients. So while shoppers can almost guarantee that any “junk food” purchased in the grocery store contains genetically engineered ingredients, genetically modified foods are also prevalent in the produce section. Much of the produce sold in grocery stores has been genetically engineered in order to improve taste, increase nutrition or provide resistance to pests and disease. In fact, currently the only way to avoid genetically modified organisms (GMOs) altogether is to eat a strictly organic diet, since the FDA standards for organic food prohibit the use of GMOs.

So while it seemed to many as if this legislation was necessary in order for consumers to rightfully “know” what is in their food and where it came from, the cost of that knowledge would have been extremely high, and would have hurt low income families the most. While the “Yes on 37” website proudly stated that this law would have imposed no costs to consumers, basic economic theory discredits this claim. After mandatory GMO labeling was required in Europe in 1997, food producers ultimately switched GMO ingredients in their products for non-GMO ingredients. We could have assumed a similar scenario in California if Proposition 37 was enacted. In fact, because California consumes 12% of the food eaten in the U.S., it is even possible that producers would have switched their ingredients to non-GMO nationwide. However, non-GMO food is simply more expensive to grow. Because non-GMO plants are less resistant to disease, there would have ultimately be a higher percentage of crop failures. Furthermore, GMO plants decrease maturation time, increase yield and are able to survive more severe weather conditions. All of these factors would have driven up the price of commodity foods such as corn and soy. This price increase would have then been shifted from the producers to the consumers when they went to purchase a box of corn flakes, a bottle of juice, or a loaf of bread.

An economic study by Northbridge Environmental Management Consultants estimated a $400 increase in grocery bill costs for the average California family under the scenario that food producers would have exchanged GMO inputs for non-GMO inputs in their products. Chief executive of the National Corn Growers Association, Rick Tolman, also predicted that the food industry in California would reformulate GMO ingredients rather than label their products “genetically modified” for fear of brand undermining.

Natural and organic food enthusiasts would have rejoiced over the news that GMO ingredients would slowly be eliminated from California (and possibly national) grocery store shelves had this legislation passed. But not only would this legislation have cost more, it would have also simply undermined individual choice, as well as consumers’ real purchasing power at a time when their incomes are stagnant or falling.  Essentially, consumers who care about eating non-GMO foods were forcing their beliefs on the people who didn’t care or couldn’t afford to care. Furthermore, the market has already responded to those consumers who are looking to eliminate GMOs from their diet. Health food stores and even mainstream markets carry a wide variety of food items that are labeled specifically “GMO free.”  “To each his own” is not a bad rule for non-GMO advocates, for the power of government used to enforce their values on others can be used against non-GMO advocates in other ballot initiatives.

In fact, a recognizable label has already been created by the non-profit organization Non-GMO Project. Certain brands have already started printing this label on their products since the market has indicated that a growing number of consumers care about this issue.

Despite the fact that there is very little research linking GMOs to health problems, not to mention the fact that there were a number of special interest loopholes written into this bill (meat, dairy and poultry were all exempt from this legislation), as well as the promise of a number of lawsuits involving family farmers and small grocery store owners had the proposition passed, the bill was only defeated by a small margin (53% to 47%). But supporters of this bill should weigh the costs, and vote with their food dollars instead of putting this measure on the ballot again. As more and more consumers purchase non-GMO foods, the market will slowly eliminate them, without limiting personal choice and hurting consumer’s incomes.

Kathryn Shelton, a research associate in the O’Neil Center for Global Markets and Freedom at Southern Methodist University, is from Orange County.

Image courtesy of Big Stock Photo.