U.S. Domestic Policy

A Free Market Approach to GMO-Free Labels

"Palouse Wheat Field Sunrise" via Charles Knowles on flickr

“Palouse Wheat Field Sunrise” via Charles Knowles on flickr

More often than we might like, there is a huge disconnect between science and politics. When it comes to genetically modified organisms (GMOs), also known as genetically modified food, the science is settled: GMOs are perfectly fine for human consumption. In fact, anyone familiar with development economics knows that GMOs have lifted millions (if not billions) of people out of absolute poverty and starvation.

Regardless of the science, a large percentage of Americans are afraid of GMOs. In direct response to this fear, democratic legislators at the state and federal level have proposed costly regulations that seek to label all food that involved genetic engineering to demonstrate as such to consumers.

In what some consider a direct response to these efforts, Senate Republicans introduced legislation that provides for standardization of labels, but does not make it mandatory. Additionally, using powers granted by the interstate commerce clause, this bill prevents states like Vermont from requiring such labels.

Ignoring the science, (Americans are, after all, entitled to be wrong) some policy approach is likely necessary to abate the fear. As a food labeling standard, it should provide clarity to consumers, but it should not substantially diminish the ability for the market to supply food. This is why the Senate approach is reasonable and should be encouraged.

"gmo" via De Cora on flickr

“gmo” via De Cora on flickr

One of the biggest (political) critiques of the Senate bill is that Republicans who usually favor “state’s rights” are willing to take this power away from the states. Under normal circumstances, that analysis is fair and state’s rights are an important consideration in the process of governing. However, one must also consider the purpose of any legislation. If the goal is to provide clarity to consumers in Vermont only , or to only regulate firms in Vermont, then it’s probably fine to let them have their bill. Not to mention, it would be legally difficult to apply the federal law to a company that only operated within the borders of Vermont. Obviously this is ridiculous and the point is to provide clarity to all American consumers, and therefore an American law is required.

Given that any legislative action should take place at the federal level, why is the specific provisions of the Senate version the right call? It’s simple: only an optional program accesses all the benefits of labeling, while recognizing the potential of the free market.

The Senate proposal gives companies the choice to make their own calculations. If they think it will be rewarding, they can pursue and achieve a GMO-free standard. Undoubtedly, some consumers would flock to this type of company. Unfortunately, such a goal is not without costs. Changing sources of inputs, pursuing a marketing strategy, and jumping through regulatory hoops all have a price tag. Some firms might decide it isn’t worth it, or worse, might never be able to afford it.

A law that makes labels mandatory would shut down companies. A law that makes it an option places a goal that some companies can reach towards. That is real balance.

Some members of the committee have asserted that by making these regulations optional, their purpose is obsolete. Since the science all points to one direction, that might not be the worst thing in the world, but that critique is little more than hyperbole. As I showed above, some will want to pursue GMO-free as an investment strategy, but that might not really be the main point of the efforts. By passing any standards, Congress would be starting a conversation. They would encourage Americans to become more informed and to ignore the hype of the media saying this or that about GMOs. This allows Americans to begin making informed decisions for themselves and their families.

An optional standard provides a meaningful and achievable goal for companies to pursue under their own individual calculus. More importantly, it does so in a way that isn’t too burdensome on companies, is relatively consistent with prevailing science, and encourages Americans to seek out more information about the world around them.

And that’s what makes a good policy.

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