Report shows estimating costs of GMO labeling more complicated

By Aarian Marshall

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, April 30, 2014 -- A new report from the Council for Agricultural Science and Technology (CAST) and written by a group of scientists, economists and legal experts shows that estimating the costs of mandatory labeling of genetically engineered (GE) products is a complicated business.

“The cost is really going to depend on what the market does,” said Alison Van Eenennaam, an animal genomics and biotechnology cooperative extension specialist in the Department of Animal Science at the University of California, Davis, during a presentation in Washington, D.C. Van Eenennaam, who chaired the task force charged with writing the report, gave a number of presentations on the report Tuesday, including two to staffers on Capitol Hill.

Lets Talk Food

“[A] handful of studies has sketched out the potential costs of the mandatory labeling initiatives in California and Washington,” the report says. “The results have varied from more than $1 billion per year to a few thousands of dollars.” Both initiatives failed at the ballot box.

Van Eenennaam noted that she has been in meetings where estimated costs have ranged from an exact 57 cents per consumer to $300 per family. Advocacy organizations also have their own varying estimates - the Biotechnology Industry Organization often cites studies showing labeling would cost the average household as much as $400 per year, while the Just Label It campaign concludes that “proposals to change labels of GE food will not affect retail prices paid by shoppers.”

According to CAST, however, the reality is much more nuanced. If the government decides that firms must label products containing GE ingredients, the cost will depend on a number of factors, the report says. First, economists have to consider how firms will react. Food manufacturers have two options: they could decide to label all of their products containing GMOs, or they could choose to reformulate their offerings to contain no GE ingredients. Or, perhaps a third option: They could do a mix of both.

“If manufacturers choose to maintain their products and place labels on them, the cost impact of mandatory labeling would be the relatively minor cost of the ink to print new labels and the more significant costs associated with tracking and monitoring to ensure compliance,” the report notes.

But reformulating processed foods' recipes to exclude GE ingredients - as manufacturers would if they decided consumers would shy away from labels - would include a number of complex changes. Manufacturers would have to shift well-established sourcing and supply chains. They might also choose to use entirely different ingredients, which could change the final product because “it is not always possible to achieve identical appearance and functionality when reformulating and redeveloping a product using alternative ingredients.”

The CAST report also says non-GE ingredients are more expensive and inconsistently grown than more conventional crops. Therefore, “the added costs of avoiding mandatory GE labels are…more or less the same as those incurred by products voluntarily labeled non-GE.”

The report's authors also argue that while labeling proponents often say they want more choice, their proposed policies actually work against diversity in the marketplace. Mandatory labeling laws “in other countries have had the opposite effect in that they resulted in the virtual disappearance of any labeled GE product from the shelves, thereby decreasing choice and increasing price for those consumers unconcerned about GE food,” the report says.

Finally, there's the issue of legally permitted tolerances. The Vermont GMO labeling law, which is awaiting the signature of Gov. Peter Shumlin, mandates the labeling of products made up of more than 0.9 percent genetically engineered materials. But that tolerance level only lasts until July 2019.

After that date, says Van Eenennaam, the state may move to 0 percent tolerance. In other words, products that contain any trace of GE material would have to be labeled. That statistic, the scientist said, would almost be impossible to track, and would require an enormous amount of recordkeeping.

In the end, the report's authors conclude that more study of the GE issue is needed, even if the cost estimate question remains opaque. ““Independent objective information on the scientific issues and the possible legal and economic consequences of mandatory GE food labels need to be provided to legislators and consumers…to help move the national discussion from contentious claims to a more fact-based and informed dialog,” the authors write.

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