GMO Labeling Won't Increase Prices

As I mentioned the other week, if you've been following the fierce battle over GMO labeling currently being waged in Washington, it's hard not to get a vague feeling of déjà vu.

The same participants are fighting, over the same thing, using the same tactics. On the "Yes for GMO labels" side of the Initiative 522 argument? The issue once again comes down to a question of transparency and the ability of consumers to make informed decisions when browsing grocery store aisles. On the "No labels, please" side? The same exact argument that was used by Monsanto, DuPont and company last time around during California's recent Prop 37 struggle is once again in vogue:

If you consumers really want GMO labeling, it's gonna cost you.

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One study says that the grocery bill for a family of four would jump anywhere between $360 and $490 a year if GMO labeling is made mandatory. Another puts the added cost to Washington's state budget at $3.4 million over the next six years, all to administer and implement the new law. Both are dramatic numbers, on micro and macro levels, that are certain to make an impression on voters before heading into the booth on November 5.

(Not the least of which is due to the campaign coffers of the anti-labeling folks hitting record numbers; at last count, they have well over $17.2 million to spread the message of "Mandatory labeling = Less money in your bank account!" across the state.)

The big problem, though, is that these financial-based arguments aren't all that accurate.

Let's take the second number first, the $3.4 million over six years of additional cost to Washington's budget: That number comes from official state budget office estimates. (Estimates being a key word; no one's quite sure what's going to happen if the law passes.) So, there's certainly a sense of legitimacy to the shockingly high number. But, as is the case with most state-wide issues, the number begins to seem less dramatic once once you look into how it's going to be split up:

[B]ased on calculations that divide the average annual administrative cost ($561,333) by Washington's census population counts (6.8 million). The result comes to roughly 8 cents per Washingtonian.

There's a reason the anti-labeling groups haven't printed "8 cents per person per year" on their propaganda.

As far as the first stat goes, the $360 to $450 per household per year number: That comes from a study commissioned by the anti-labeling organizations, so you know it's to be taken with a hunk of salt. The main reason for these costs is the implication that since food producers will have to change labels, they'll be passing along that cost to the consumer. In reality, the additional cost won't come from printing new labels, but from something a bit more substantial:

[F]ood would cost more not because changing labels is expensive -- it isn't, food manufacturers do it all the time -- but because the companies would substitute more expensive, non-GMO ingredients.

So, a higher cost for better foods. That seems about right. But, also, that's if the food producers actually pass along the entire costs of using more expensive and worthwhile products to consumers. And as an economic assessment put together by the Alliance for Natural Health points out, that's a big "if":

The fear of losing customers in the competitive food industry is an important deterrent to changing prices.

That's just Economics 101. The food producers will keep their prices low enough to be affordable to most people, just as they do now. Why are food producers are spending oodles of money in attempts to keep mandatory GMO labeling laws from being passed? Because they truly do care about the consumers's ability to buy food, and don't want to have to raise prices on them? Or because they already know they won't be able to pass along those costs if they want to, you know, stay in business?

The point is, once you take those two numbers out of the argument against GMO labeling, there really isn't a compelling financially-based reason for consumers to vote against it. And then the question quickly becomes, is there any reason out there to vote "No"?

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About the Author

Rick Paulas has written plenty of things, some of them serious, many of them not, scattered over the vast expanses of the Internet. He lives in Los Angeles and is a White Sox fan.
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