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Economic Sense

RSS By: Matt Bogard,

Matt's primary interest is in the biotech industry and ag policy.

Just Label It! What's in a name? A free market perspective on labeling gentically modified foods

Mar 25, 2013

By Matt Bogard

(re-blogged from Economic Sense- )

The AgriTalk March 20th podcast addressed GMO labeling and reminded me of a post I did on my personal blog some time ago. In the post I investigate:



Is there justification for government intervention requiring labeling of GMO foods?
In order to decide this, I identified three questions that should be asked.

Is there an uncompensated harm?

Is there sufficient information so that citizens can recognize the potential harm?

Does the market provide a way to avoid the harm?

With regard to the first question, despite unsubstantiated claims about harming monarch butterflies, finding GMO toxins in pregnant women, or killing cattle, the science does not offer a strong or definitive case that biotechcrops pose environmental or healthrisks. In fact, the precision of biotechnology and the increased regulatory scrutiny that we put GMOs through makes these modern techniques safer than traditional methods.

"Characterisation of GM crops is a legal requirement, however. As a result GM crops are better characterised than ever before in the case of conventionally bred crops, including knowledge on the site and nature of the genetic modification." (1)

So in terms of uncompensated harm, government intervention does not pass the first hurdle for justification.  Given that we can’t scientifically affirm that GMOs impose increased risks over traditional plant breeding methods, it may not be relevant to consider the next question. One might certainly argue that there is a degree of widespread ignorance related to the use of biotechnology in food production. It is a fact that 98% of all farms are family farms, and 70% or more of the corn and soybeans grown on these farms is of GMO origin. Perhaps more could be done to make consumers more aware of this fact, but it seems like it could be achieved very easily through marketing and consumer education without  government intervention. This brings us to the last question- does the market provide a way to avoid the harm? Again, without scientific evidence of harm, this question seems irrelevant. But if we want to assume that there is some remote chance of harm, the market has various mechanisms for avoiding GMO foods via organic and other branding options. Except for the most zealous advocates of government intervention in the market, it seems the case for it is quite weak.

What if people just want labels for other reasons? 

In some cases, people are not opposed to GMOs for just health reasons, but they don’t approve of the business practices of companies Monsanto. First off, labeling seems like a blunt tool to punish one company, as it could penalize the many companies in the biotech industry, as well as the family farms that overwhelmingly choose this preferred production method.  Secondly, the U.S. constitution and legal precedent may establish a role of government to establish weights and measures but this does not justify the use of labels on the basis of personal or political preferences. Personal food preferences should not be expressed in the voting booth, but through the market.

Could labeling do more harm than good?

Given the gate to plate nature of the agricultural industry, false consumer perceptions can actually do a great deal of harm to family farmers. For instance, misconceptions about finely textured beef lead to huge losses in cattle markets and 800 or more jobs in the beef industry. Or take the case of high fructose corn syrup (HFCS). Due partly in response to government intervention through sugar tariffs as well as technological advances, this new sweetener was produced by increasing fructose levels in corn syrup. The end product was technically higher in fructose compared to normal corn syrup, but it did not represent a ‘high fructose’ sweetener relative to other sweeteners such as ordinary table sugar. At the time listing the technical name ‘high fructose corn syrup’ in the ingredients of food products seemed harmless enough. However, recently many misconceptions about HFCS have made their way into the media, despite the evidence to the contrary. Similar to finely textured beef or HFCS, listing or labeling GMO ingredients could have a similar effect on consumer sentiment if this conveyed a false sense of risk or harm associated with GMO foods. This could not only have a negative impact on family farms that depend on this technology, but a government incentivized drop in consumer demand for GMOs  through labeling would also imply a loss of the actual environmental and safety benefits of this rather green technology. 

If government intervention to label GMOs were justified, how would we do it?

Playing devil's advocate, what kind of labeling would make sense? What about the current proposal in California?

"Commencing on July 1, 2014, any food offered for retail sale in California is misbranded if it is or may have been entirely or partially produced with genetic engineering and that fact is not disclosed . . . with the clear and conspicuous words Genetically Engineered on the front of the package."

This seems to be the worst example of what would be an acceptable labeling initiative. First off, placing the words ‘Genetically Engineered’ on the front of the package seems a bit extreme, and could easily be used by anti-biotech factions as a marketing ploy to mislead consumers. The very thought of making it conspicuous is a blatant  indicator that this initiative is more about political and consumer manipulation and less about disclosure of information. If identification of GMO origin is to be noted on food packaging, the appropriate place would be more inconspicuous within the ingredients listing. GMO products are used widely in the pharmaceutical industry and they have already set a precedent for how these products could be labeled.

For example, pharmaceuticals produced via biotechnology follow a common naming convention: name (rDNA origin). The ‘rDNA origin' indicates that the drug was produced through recombinant DNA technology. Food products manufacturers could follow a similar protocol:


Bovine Somatotropin is a currently used biotech product used in dairy production, and is often simply referred to as rbST. Instead of following a biotech food ingredient with (rDNA origin) it may be simpler to just prefix the ingredient with an ‘r’ as such:


This approach would identify GMO food ingredients without explicitly creating unwarranted alarm or attention. Concerned consumers could simply read through the many ingredients listed and look for the 'r' ingredient prefix or  (rDNA origin) suffix.  However, this should still be approached with extreme caution, as simply agreeing to list GMO ingredients this way admits to some extent that GMO products merit some reason for being identified in food, which again the neither science nor libertarian principles for government intervention seem to justify.  As previously stated, with only a little consumer education, consumers could easily be made aware of the prevalence of GMO ingredients in food products without reading ingredients lists. Formally identifying these ingredients in any way would seem to only serve the political ends of manipulating the free choices of consumers and producers from gate to plate.


Additional References:

1- European Commission (2010) A decade of EU-funded GMO research (2001–2010). Luxembourg, Belgium: Publications Office of the European Union.



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COMMENTS (1 Comments)

Ric Ohge - Belmond, IA
If you want my money, then it have the same label on it that 60 other nations require by law. Otherwise, you lose all but the Tax Dollars stolen from me to subsidize the stuff, and hopefully we're now just an election away from rectifying that problem. Why so much support for 40 year old science and tech is beyond comprehension. Going back to the Lab with the NEW Science and Tech, while fixing the soil and upgrading the base genetics through hybridization would eliminate the whole issue, including labeling.
12:31 PM Mar 28th

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