An MR reader on Proposition 37 (GMO labeling)

by on October 15, 2012 at 7:48 pm in Economics, Food and Drink, Law | Permalink

He wrote to me:

There’s two things about the labeling debate that really bother me:

First, we have to concede that not everything can be labeled.  If so, the burdens would almost instantly put huge swaths of businesses out of business.  My dad, a dentist, does not have to label every instrument to describe where the metal came from, which machines made it, etc.  So the question is: where do we draw the line on what should be labeled?  My view is, if there is scientific evidence suggesting a plausible connection to harm, then requiring labeling makes sense.  But the view of the food activists is that they should just know everything, regardless of evidence, irrespective of cost.  So everyone should pay high costs because of their fears, which have no basis in evidence or fact.

On related matters, here is Mark Bittman on his ideal food labels, serving up a rather ambitious proposal.

On one specific point, he wants to levy a black mark against companies which treat their workers poorly.  On the contrary, that is a sign the product likely comes from a poor country and probably you are doing the world more good in buying it and, in the longer run, bidding up wages and working conditions in that country.  It helps other people more to buy from China than Portland, even though workers fare much better in the latter locale.  This difference in perspective is a simple illustration of how “ideal” food labeling can rather rapidly go wrong, especially when it is tangled up with the desire to make expressive statements about what one wishes to affiliate with or not.

A further question: at which margin do consumers stop paying attention?  When was the last time you read your new iTunes “I agree” contract before clicking?  Attention is scarce, so we need to pick and choose priorities.

What about the cost of producing such complicated labels and the enforcement of their veracity?  Food supply chains these days are often quite complicated.  Do you need to monitor how the fish sauce or oyster sauce in your composite food product was produced?  Bittman writes:

These are not simple calculations, but neither can one honestly say that they’re impossible to perform.

That is setting a rather low bar, and vaguely at that.  Most bad economic policies would meet that standard.  I would rephrase it: first figure out how many small and poor and foreign farmers this labeling proposal would put under — and then get back to us with a proposal.

Here is my earlier survey post on Bittman and evidence relating to GMOs.  And here Jonathan Adler offers an excellent analysis, including freedom of speech issues.

Bill October 15, 2012 at 8:39 pm

People learn from each other, or take someones seal of approval as a signal of someone else having done the research.

So, if Mark Bittman says that I should not eat a certain fish because it is being overfished and will soon be extinct, I will believe him. He has no financial interest.

Would you take the word of the fishing company which catches those fish.

Vernunft October 15, 2012 at 8:42 pm

The fishing company that has a positive incentive to keep the fish alive?

Uh, yes.

oblivia October 16, 2012 at 7:23 am

They also have an incentive to maximise profits in the short term. Guess which tends to dominate.

Indeed, this is precisely the point in the case of food manufacturing as well. Companies have an incentive not to kill or poison their customers, you might think, but it doesn’t seem to stop them from doing it (which is why the FDA exists).

Of course, that doesn’t mean they do it on purpose — it means that they disregard safety standards to cut costs, which leads to greater risk. Even in the US, people die from food poisoning every day.

I live in China and can tell you that food producers absolutely do not have a strong incentive (absent regulation) to keep their customers alive.

Urso October 16, 2012 at 9:41 am

Chinese citizens also have no realistic chance of getting relief from the judicial system when they do get poisoned.

Again, though, it’s a long way from “mercury tainted milk” to “Roundup-ready alfalfa.” I think the whole point of the OP is that we’re assuming, without evidence, that GMO is the effective equivalent of poison (or at least, something bad for you).

oblivia October 16, 2012 at 10:21 pm

Needless to say, the judicial system is not a good way for individuals to get relief from food poisoning. Even in litigious America, people tend not to call their lawyer every time they get the runs — and even if they do, the evidence has usually been consumed (and ejected, sometimes violently).

My broader point was only that safe food does not spontaneously occur as a result of producers’ incentive to think about the long term. In practice, safe food is a result of regulation.

But I don’t think anyone is arguing that GMO is a food safety issue. The fear, as I understand it, is mainly about the effect on the environment rather than any suggestion that consuming GMO corn or soya is dangerous. Millions of people do so every day.

Brian Donohue October 17, 2012 at 9:46 am

“In practice, safe food is a result of regulation.” Mostly wrong.

maguro October 15, 2012 at 8:47 pm

So let Mark Bittman post a list of foods that he approves of, and you can shop to that.

No need to inconvenience the rest of us.

Urso October 16, 2012 at 9:39 am

This is a bizarre way to look at things. There are lots of things that I have no direct financial interest in, that doesn’t mean I know what the hell I’m talking about. And why is only a *financial* interest relevant?

statatheleft October 15, 2012 at 9:05 pm

Tyler – what do you think of animal welfare labeling?

Tomasz Wegrzanowski October 15, 2012 at 9:21 pm

Disregarding silly practical issues like excessive penalties, how could economists possibly be against labeling, since it gives consumers choice? In what kind of model are uninformed consumers leading to more welfare?

If significant minority of consumers want GMO-free only, label them.
If significant minority of consumers want vegan only, label that.
If significant minority of consumers want Kosher only, label that.

None of these have much scientific basis (GMO actually much more than the other two), it’s all about consumer choice.

And in practice this is no more difficult than type of food labeling we’re doing now.

The “but there’s no rational basis for caring about GMO” is not an argument at all! It’s imposition of your value system on someone else’s preferences. How is that even remotely legitimate, and would you also do that in vegan and Kosher cases?

Anon. October 15, 2012 at 9:27 pm

The point is that it is costly to label these things, did you even read the post? The cost is applied to all consumers, whether they are ignorant, paranoid idiots or not.

David October 15, 2012 at 9:46 pm

You realize there is no law mandating the labeling of Kosher food, right? You do understand that Kosher food is labeled voluntarily by competing certifying authorities who argue about the definition of Kosher. So would you mind explaining to my how your own examples bolster your case? Or are you wholly ignorant about which you speak?

David October 15, 2012 at 9:48 pm

Oops, sorry Anon, that was meant to be a reply to Tomasz obviously.

Cliff October 15, 2012 at 10:59 pm

Yes, I am so glad the government requires that all my food be labeled “NON-VEGAN”.

Tomasz Wegrzanowski October 16, 2012 at 5:58 pm

Government requires vegan labeling already. All food is required to come with list of ingredients, on which you can easily distinguish animal-derived products.

It would be a tiny change to require marking GMO ingredients as such on already existing mandatory ingredient list.

This list is maintained without any significant costs, and without any problems whatsoever.

All talk about cost is just a diversion. Cost would be completely negligible, just as cost of existing ingredient list is.

Kosher labeling is not mandated by government, but then if “certified GMO free” (similar to certified Kosher) got track, people would make the same stupid argument against it. There’s really no big difference either way.

Lord October 16, 2012 at 12:00 am

Actually there is already such a label, organic. The intent of this is to raise the price of GMO food to make it easier for organic to compete, if not completely displace GMO food. Now we could just label all non-organic food as non-organic, but why is that necessary?

Claudia October 15, 2012 at 9:21 pm

It seems clear from the email, post, and linked articles that we first need to agree on what the standards are for mandatory labeling and then argue over whether GMOs meet those criteria. In the information age and a highly concentrated food industry, the costs of GMO labeling (if needed) could be kept manageable (though clearly non-zero).

So here’s a relevant excerpt from Adler: “That some consumers may want to know about how a product was produced should not by itself be sufficient for mandatory labeling. As already noted, consumers may want to know all sorts of things about how products are made, or who made them — but we typically let the market provide such information. … But so long as there is no difference in a product itself that could adversely affect the uninformed consumer, and no outright deception or fraud in its labeling, there is no reason for government intervention in labeling.”

I agree, but I would argue that arguments behind labeling GMOs vs kosher vs union-labor food are NOT the same. Only the GMO labeling has a health and safety concern that may “adversely effect the uninformed consumer,” whether there is compelling evidence is questionable. I personally doubt that GMOs are harmful, but it did take us awhile to figure out tobacco had a downside (so the worries don’t seem crazy to me either). I don’t see the slippery slope of labeling dental tools as that pressing of a concern. But if we do update food labels, I thought the most troubling thing about the Bittman ideas is that he presumes a lot about the proper way to nudge people. Boring, ‘just-the-facts’ labels that set out the information in a more neutral way might get ignored, but they won’t mislead or need to be revamped every time the nutrition wisdom changes.

I am torn on the GMO labeling issue: Having grown up on a farm, I have seen the ill economic effects of unwarranted food fears. Yet, as an economist I see access to information as crucial for market efficiency (though I concede in reality many don’t know what do with the information and maybe would appreciate some nudges in the ‘right’ direction).

Urso October 16, 2012 at 9:49 am

Why offhandedly dismiss the “moral harm” some people suffer if they eat non-kosher or non-union food? Just because you don’t feel it, it doesn’t exist?

Because franky I think the two examples you gave are *directly analogous* to GMO. The people don’t want to eat it because it’s “not natural.” It’s cultural, or I guess more accurately subcultural. It’s also (like eating kosher) a mark of belonging to a certain group.

Claudia October 16, 2012 at 11:19 am

Not dismissing moral (or group indentification) concerns in food choices. I simply don’t think they warrant *mandatory* labeling. Information about health and safety of food products seem like the public good to me. I am more sympathetic to GMOs than organic on this front, but even then I’m not sure GMO passes the hurdle. I try hard to not buy organic (over-priced, waste of resources), but I might be convinced for health reasons to eat GMOs in moderation.

Jared October 15, 2012 at 9:45 pm

Bittman’s labels are pretty bad. “Foodness” is given equal weight with nutrition and sustainability. It would discourage the consumption of highly nutritious food whose producers are highly compensated that happens to be highly processed. It’s all for no reason other than Mark Bittman prefers the aesthetic of unprocessed food. If nutrition and the equity and sustainability of the process are accounted for, there is no place for individual taste in required food labels.

ed October 15, 2012 at 9:56 pm

Bittman seems to want (1) lots of rules and regulations, (2) lots of small, independent producers.

Does it ever occur to him that these goals are in tension?

(Stick to cookbooks, Bittman)

Mark Thorson October 15, 2012 at 10:35 pm

You guys are all trying to be logical about it. Since when is that relevant to a California proposition?

Although my logical side opposes the proposition, my emotional side wants to see the train wreck this stinking turd of a law will cause. I’ve just about decided to vote for it. I especially like how even applesauce made from organic apples (and other “processed” foods) can’t be labelled as “natural”. Ha!

The provisions enabling individual lawyers to enforce the law by initiating lawsuits is just icing on the GMO-free cake. Go get ‘em! If you’re lucky, I’ll be on the jury!

Claudia October 16, 2012 at 7:23 am

Are you sure that’s your “emotional side” talking?

Sounds like condescension from your “logical side” that has not yet figured out how to re-educate the ‘crazies and crooks’ who support the proposition. Emotion has as much validity as logic, albeit with some different comparative advantages. Both can have unintended consequences…no monopolies in hubris.

Mark Thorson October 16, 2012 at 10:25 am

I’ve long ago accepted that they are uneducable. There is a penumbra that might be salvaged, and for them the blowback from the fiasco that will result from this law might be a learning experience. Sometimes the best way to discredit an enemy is to give them exactly what they’re asking for.

Of course, there are many ways this could play out, so unintended consequences are clearly a possibility. I’m willing to risk that things might go in a direction I neither anticipate nor welcome. You pay your money, you take your chances.

jan October 15, 2012 at 10:41 pm

I think his proposed labels go too far with the traffic lights-too judgy. I would accept and even welcome the GMO label, but only once the science comes around. However, the notion that a labeling change will pug small and foreign companies under is a little hyperbolic. For one, every regulation that comes out of FDA is subject to extreme scrutiny and includes detailed estimates for cost of compliance. So nothing that puts anyone out of business is liable to get through. We’ve been waiting almost two years for FDA to propose regs to implement the most recent food safety law.

More importantly, food producers already have labeling responsibilities. Even Bittman’s proposed change wouldn’t need much of a change in effort-mostly some minor costs for the transition. As for enforcement, I am ok increasing significantly our

jan October 15, 2012 at 10:44 pm

…enforcement budget, as we spend almost nothing enforcing non-USDA food regulations relative to food’s share of the economy.

Fazal Majid October 15, 2012 at 10:44 pm

I don’t buy food from China, not because workers are treated poorly there (I’m not sure the US can lecture others on this subject), but because of a demonstrated lack of food safety regulation enforcement and high incidences of arsenic and chemical contamination, even where there isn’t outright fraud as with the melamine baby formula scandal. There’s a reason why Chinese parents prefer expensive imported New Zealand powdered milk over domestically produced formula for their babies.

That said, China has the death penalty for food tamperers, and applies it, whereas in the US big agribusiness is shielded by an army of lawyers and is seldom held accountable for its reckless practices. That’s why it is all organic all the time for our baby girl. Regulations won’t help, since the USDA and FDA are corrupt to the core and part of the problem, not the solution.

ChrisD October 15, 2012 at 11:19 pm

Fazal,
Not a joke/argument. Check out the data on arsenic in baby rice cereal. Organic brands are actually worse on this account. Just for your own benefit. Too late for us to switch. Our kids are older.
http://www.cnbc.com/id/49093825

maguro October 15, 2012 at 11:20 pm

Don’t make the mistake of thinking that organic = safe.

http://www.guardian.co.uk/world/2011/jun/10/e-coli-bean-sprouts-blamed

Jayson Lusk October 15, 2012 at 10:56 pm

The right to know argument is a bit misleading – consumers can know what’s in their food if they really want to. Moreover, it seems many consumers confuse “right to know” with a “right to buy” non-GMO.
http://jaysonlusk.com/2012/10/11/want-to-know-whats-in-your-food

Greg Lauer October 15, 2012 at 11:06 pm

We can argue whether *requiring* food to be labeled GMO/GMO-free is reasonable or not. But can we agree that the FDA’s rule that food cannot be voluntarily labeled as GMO-free is anti-consumer?

Chris MacDonald October 16, 2012 at 1:33 pm

My understanding (correct me if I’m wrong) is that they technically permit GM-free labelling, but that they’ve been a bit picky about the way such labelling is done. “GMO-free”, for example, is technically incorrect (since the “O” stands for “Organism” and most foods don’t contain entire organisms anyway) but is not actually misleading in any material way. But your point is well taken: they shouldn’t let their commitment to clear labelling frustrate freedom of choice.

derek October 15, 2012 at 11:07 pm

If you want non GMO food, then buy stuff that is labelled Non-GMO. There is such stuff available. Assume anything not labelled in that way to contain GMO’s. If sales of labelled Non GMO foods go up and it is a profitable market, then more will offer it and label it as such.

Gluten intolerant people face the issue by assuming everything has gluten unless otherwise stated. Seems to work ok for them.

prior_approval October 15, 2012 at 11:31 pm

In regards to this point,

‘My dad, a dentist, does not have to label every instrument to describe where the metal came from, which machines made it, etc.’

it misses the reality. The manufacturer does, at least if the manufacturer is located in a country so hobbled by environmental regulations, unions, and record keeping requirements that they remain world famous for the quality and precision of their medical instruments.

There is a reason why the world’s largest business software company is German, and there is a reason why it is so successful. Manufacturers with a long term perspective and healthy profit margins care about those sorts of details, so that the person using the instruments can be confident they don’t have to worry about such details.

Kevin Postlewaite October 16, 2012 at 12:23 am

> I would rephrase it: first figure out how many small and poor and foreign farmers this labeling proposal would put under

It sounds like Tyler would like mandatory labeling for proposed labeling standards….

Jan October 16, 2012 at 10:37 am

Yes! Let’s put in place an expensive and burdensome process to evaluate the human cost of the already mandatory evaluation of the costs and impact of these regulations.

Willitts October 16, 2012 at 2:50 am

Let the criminals who foist “organic” and “healthful” foods on idiots prove and defend their own claims. Let those who are fearful question those who desire their business.

Let the rest of us live (and die) in peace.

I was on the L the other day and was astonished at how many warning labels were on the train. Even more astonishing is A) how many were common sense, B) how many others were ridiculous, and C) how many had escaped my attention despite the prominence of their posting and frequent exposure to them.

When you highlight everything, you highlight nothing. Warnings enter the voluminous ether of cosmic noise.

I think that’s covered under the fallacy of composition.

Andrew' October 16, 2012 at 7:51 am

Even cigarettes do not harm everyone. And everyone knows that a pack of cigarettes contains cigarettes.

JasonL October 16, 2012 at 9:19 am

Foodness. Man, I hate that guy.

Tununak October 16, 2012 at 11:31 am

+1.

Great cookbooks, though.

MyTyrone October 16, 2012 at 12:36 pm

“There’s two things” and “irrespective” in one comment! Like nails on a backboard.

Chris MacDonald October 16, 2012 at 1:41 pm

Prop 37 seems to rest on the idea that people have a right to know the genetic content of their food.

The key, I think, is to start by figuring out what sorts of things we have a right to. When it comes to information, it’s worth looking at paradigm examples, such as the right for an accused person to know the charges against him, the right in a democracy to know who the candidates are, or the right of a patient to know his diagnosis. In all 3 cases, we attribute a strong right based the centrality of those bits of information to human wellbeing. That, I think, is roughly the test that ought to be applied here.

I wrote more about this here:
http://food-ethics.com/2010/09/28/the-right-to-know-what-im-eating/

Bradley Gardner October 16, 2012 at 3:28 pm

I’m curious to what extent the organic/local food movement has directly raised the price of produce in recent year. My (relatively wealthy) grandparents are complaining fairly regularly about difficulties getting reasonably priced vegetables. I expect at some point more margins to producers that benefit from regulations turns into less sales.

prior_approval October 17, 2012 at 9:49 am

One mimght want to look at crops rotting in the fileds due to legislation – see Alabama or Georgia laws – before complaing about farmer’s deciding to grow and sell organic crops – voluntarily, one must note, as the margins are higher, as are the costs, including paying a decent wage to the documented field workers, in general.

David T October 18, 2012 at 6:02 pm

I read Adler’s full paper. He says “[T]here is no evidence that these or any other GMOs have had adverse impacts on human health or safety..” Well, there was one, and it was a pretty big one, albeit over 20 years ago.

In 1989, the Japanese conglomerate Showa Denko was using fermentation to produce tryptophan – used as a food supplement and additive. To boost production, they genetically modified the bacterial strain, massively amplifying the gene for an enzyme in the tryptophan pathway. Accidentally, they also amplified another gene that coded for a toxin. Their safety assays didn’t pickup the toxin; the contaminated tryptophan got out on the market. It caused an outbreak of Eosinophilia-myalgia syndrome. 37 people killed world wide and another 1500 injured.

I don’t see anything in the current FDA regulatory scheme which would absolutely preclude another such disaster.

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