Mandatory Labeling: The Business and Cost of Knowing What’s In Your Food

 

In the midst of a wild presidential campaign year, a heated battle is surrounding an issue hardly touched in the debates. This fight is over food labeling and is raging on in congress and throughout the country. With Vermont setting precedent at the state level by passing a bill that requires mandatory labeling of food products containing GMOs (Genetically Modified Organism) or inputs that have been genetically engeineered.

Vermont has been at the forefront of policy debates concerning food in regards to organic farming methods and genetically impacted products, so it is no surprise that they are first out of the gate with this type of legislation. This law is slated to take effect July 1 of this year. In light of this new legislation the Vermont Attorney General’s office has issued  FAQs to assist with compliance that can be found here: GE Food Labeling Rule FAQs  . This document clearly highlights the protocol for sales and labeling of products that contain genetically engineered ingredients. Where it begins to become unclear is around item 27 of the document:

27. Do I need to label my product “GE-free” if it does not contain GE materials? No. The law requires labeling only products that are produced or may be produced with GE.

28. If no labeling is required under the GE labeling law, may I choose to label my product “GE-free”? Not necessarily. Merely because the GE labeling law does not require a food to be labeled as “Produced with Genetic Engineering” does not necessarily mean a manufacturer can properly label the food “GE-Free.”

These two questions seem to contradict the notion of the rule and raises the question of motivation behind it being passed. If you’re required to label a product, should that cost incurred to do so not allow you to promote your product?

At the national level the debate has taken root around proposed legislation to preempt mandatory labeling requirements by states. According to The Hill:

“Sen. Pat Roberts (R-Kan.) unveiled a draft bill late last week that requires the Agriculture secretary to establish a national voluntary labeling standard for bioengineered, or GMO, foods.”

Many believe that this is pandering to the corporations of “Big Ag” producers allowing them to continue controlling the market without transparency of methods or inputs in their products. On the contrary the issue of cost is also being strongly debated, If mandatory labeling is put into effect nationwide who’s going to pay for it?

The heart of the issue of mandatory labeling from a purely business and economic standpoint is exactly this: you’re forcing someone to incur a cost to put a label on their product that will deter consumers from purchasing it. This makes very little sense from the perspective of the producer regardless of the product. Again transparency should be a priority in regard to what goes into our food and the things we put in our bodies, but what is the best way to do that in a less punitive manner ?

Considering this in the context of the voluntary standard of organic certification offered by the USDA, organic producers that apply and receive this certification are able to pass along a portion of the cost to their consumers willing to pay the premium for piece of mind. Organic producers are able to capitalize on this through the strength of the organic brand in this country. There are also already organizations that are creating voluntary standards throughout the country to label non-GMO products. The Non-GMO Project is one such organization with the mission statement of ” Working together to ensure the sustained availability of non-GMO food & products”.  Their organization is offering not only certification opportunities to producers and labeling these products, but also allows consumers to consult their website to find such products. Therefore this organization also has  not only created a business around their voluntary standard, but also a center of resources and education for the consumer.

To contrast the use of voluntary standards, conventional farmers using an aspect of genetically engineered technology to produce, are through mandatory labeling incurring a cost that they are indeed not passing on to their consumers nor strengthening their brand. A study released Monday by the Corn Refiners Association (CRA) found that Vermont’s law could increase the price of groceries by nearly $1,050 annually.

 

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If the future system becomes based on mandatory legislation this certainly will incur greater cost for the consumer across the board. As the fixed cost for a producer increases it will be passed along through margin to customers. Many consumers in this country already struggle financially and cannot afford to eat produce. Without approaching the food system as a whole in this country how can we implement a mandatory measure that will drive food prices up and further away from being accessible to the majority population?

 

 

 

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5 Comments Add yours

  1. Really interesting post!

    Like

    1. Tom C. says:

      Thank you! It’s a pretty complex topic with a huge impact. Is there anything in the works on the state level in your area?

      Like

      1. Oh I’m from the UK .. the govt here isn’t really too hot on environment!

        Liked by 1 person

      2. Tom C. says:

        That’s a bummer, I’d love to hear more about what’s going on over there as well as your perspective! Cheers!

        Like

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