GMO food labels: Would label laws in Vermont, Maine, Connecticut increase food costs?

Are GMO Food Labels Worth the Cost?

Are GMO Food Labels Worth the Cost?

The state of the universe.
May 20 2014 7:17 AM

The Price of Your Right to Know

Calculating the hidden costs of genetically modified food labels.

Labels on bags of snack foods indicate they are non-GMO food products.
The voluntary “non-GMO” label, started in 2008, inadvertently sows confusion.

Photo by Robyn Beck/AFP/Getty Images

The impassioned quest to label foods made with genetically modified organisms is heading for the states. “Don’t think that it’s not coming to you,” warned Hawaii Attorney General David Louie at a meeting of state attorneys general.

They certainly understood. In 2014 alone, 25 states have proposed 67 pieces of legislation related to GMO labeling. After near misses in California and Washington, advocates recently ushered a labeling initiative through Vermont’s more receptive legislature. Maine and Connecticut have also approved labeling laws, although they are contingent on further regional support. Whether the labeling debate continues to play out on a state-by-state basis, or the federal government eventually intervenes, chances are good that we’re looking into a future food supply dotted with mandatory GMO labels.

More than 90 percent of Americans think this is a good idea. As matters now stand, the voluntary “non-GMO” label, started in 2008, inadvertently sows confusion. Not every conventional food made with non-GMO ingredients uses the non-GMO label (a company may want to avoid the testing and regulatory costs). As a result, it’s impossible to know if the can of soup you want to buy—specifically, a can lacking an organic or non-GMO label—contains GMOs or not. Furthermore, non-GMO labels have been placed on products such as orange juice, suggesting that there are genetically modified oranges on the market when, in fact, there aren’t. None of this seems quite right. To a meaningful extent, a GMO label would bring some clarity to the situation.


But clarity comes at a cost—and how much cost is the subject of intense debate. Those opposed to labeling for financial reasons rely primarily on a report prepared with industry support by the Northbridge Environmental Management Consultants. It concludes that labeling “would have a substantial impact on California consumers” by altering “how many of the foods they eat are produced.” Changes in production, it explains, “would make that food more expensive.”

Labeling supporters point to a study commissioned by the Alliance for Natural Health, a U.K.-based organization dedicated to “promoting sustainable health and freedom of choice in healthcare through good science and good law.” This report claims “consumers will likely see no increases in prices.” Reflecting this polarization, a host of additional studies estimate that food costs could rise anywhere from a couple of dollars per person to 10 percent of a family’s food bill.

This disparity hinges less on sloppy science or ideological bias than a basic disagreement over how food suppliers and consumers would react to a freshly minted GMO label. One side—the no cost/low cost advocates—equates a labeling mandate with little more than the paper and ink required to manufacture the label. The idea here is that food suppliers and consumers wouldn’t necessarily shift their purchasing choices in the face of a GMO designation. Mother Jones’ Tom Philpott gave a nod to this assumption when he asked, “Ever seen the words ‘new and improved’ on some boxed delicacy?” His implication was that the consumer’s gaze glosses over new labels all the time without leading to a radical shift in purchasing behavior. Why would it be any different with a GMO label?

Those who see the GMO label leading to higher food prices begin (as they should) by highlighting the sham science that’s been used to vilify GMOs over the past two decades. The overwhelming scientific consensus is that GMOs are safe to eat. That hasn’t prevented the disingenuous association of genetic modification with maladies ranging from cancer, autism, impotence, allergies, and infertility to farmer suicides in India. Jayson Lusk, an agricultural economist at Oklahoma State and an editor of the Oxford Handbook of the Economics of Food Consumption and Policy, explained in an email, “requiring GE labels serves to promote the kind of thinking” that’s rooted in “pseudo-scientific theories that have no basis in solid science.” Perhaps it’s not “new and improved” that will pop to mind when consumers see a GMO label, but rather something more like “skull and crossbones.”


Realistically speaking, most consumers faced with a GMO label will neither automatically bivouac to the organic (or non-GMO) aisle nor react with complete nonchalance. It seems safe to split the difference and assume that a mandatory GMO label would at least create a modest demand for non-GMO corn, soy, canola, and sugar beets. Based on this assumption, we can begin to better assess what exactly is at stake when it comes to prognosticating the cost of a GMO label.               

One change seems absolutely certain: The food system’s foundation would tectonically shift to accommodate dual ingredient streams (if not multiple streams). It would have no choice. GMO and non-GMO crops are currently massively mingled. The logistics of crop segregation, says Jennie Schmidt, a Maryland corn farmer, terrifies conventional farmers. It has also led the Washington State Academy of Sciences, in a report prepared last October, to write, “The costs of actual labeling are a tiny fraction of the costs of compliance and certification.”

Understanding the economic threat of segregation requires understanding the ubiquity of GMOs in our food supply. Eighty-five percent of U.S. corn, 95 percent of U.S. sugar beets and canola, and 91 percent of U.S. soy are genetically modified. Up to 75 percent of the processed foods on the market contain genetically modified ingredients. A GMO label—again, assuming at least some change in consumer choice—means that food producers would have to cleave the food system’s supply chain to segregate and audit GMO and non-GMO ingredients. This would require them to prevent cross-pollination between GMO and non-GMO crops, store GMO and non-GMO ingredients in different locations, establish exclusive cleaning and transportation systems for both commodities, and hire contractors to audit storage facilities, processing plants, and final food products. Surveying the potential compliance expenses based on a failed 2002 Oregon labeling initiative (Prop. 27), the Washington State report estimated that annual costs today would range from $150 million to $920 million. The administrative expenses of auditing alone could reach $1 million. And as for the legal expenses that would arise from suits over contamination: Let’s just say the vultures are already circling.

But what’s especially daunting is that these costs wouldn’t be fixed. Consider the issue of purity standards—that is, the percentage of GMO ingredients permitted in a non-GMO product. The Non-GMO Project, which has driven labeling initiatives nationally, currently follows the European Union and advocates a 0.9 percent threshold. But it’s not happy about that number. In fact, its stated intention is to achieve the “absence of all GMOs” in non-GMO products. So, if labeling advocates do what they say they’ll do and push for improved purity in the wake of a labeling law, expenses would further spike. According to a paper published last month by the Council for Agricultural Science and Technology, lowering the tolerance from 0.9 percent to 0.5 percent would raise the costs of segregation and production by as much as 20 percent, “and much more than that for tolerances below 0.5 percent.”


Another expense-related concern—one yet to be addressed by labeling advocates—centers on how finely grained GMO labeling could become. Organisms are genetically modified to achieve a wide variety of traits. Given that the imperative driving labeling is a “right to know,” there’s good reason to suspect that, as unfounded rumors about the health implications of particular GMOs emerge, consumers will demand that distinct GMO traits also be differentiated by label. After all, if labeling initiatives are about choice (as advocates insist they are), then why not segregate GMO ingredients that are “Bt traited” (for insect resistance), “combined traited” (for drought resistance), and “RoundUp Ready traited”(for herbicide resistance)? Without a clear justification for not doing so, producers and food suppliers have every reason to be nervous that GMO labeling is the tip of the iceberg. As Schmidt, the Maryland farmer, said in a phone interview, “segregation costs would become astronomical.”

Despite these concerns, some experts don’t expect that consumers will see a dramatic uptick in food costs. Food corporations are highly skilled at minimizing the economic impact of disruptive changes in production, said Parke Wilde, an associate professor at Tufts’ Friedman School of Nutrition Science and Policy and founder of the influential blog U.S. Food Policy: “The food system can adapt to many things.”

It’s certainly possible that food will be reorganized into three general tiers—GMO, non-GMO, and organic—with non-GMO food moving toward the more expensive organic option while GMOs, which will be seen as less desirable, drop in price.

However it happens, a cost-free label is a happy thought. But until the label becomes the law, and until consumers are set free to cast their votes in the aisles of the marketplace, we’ll have little more to go on than tea leaves. And until they are genetically modified to be more accurate, I’d prepare to pay more for food.