Current U.S. food labeling policy does not require the labeling of genetically modified (GM) foods. Voluntary labeling is an option, in which case the costs are borne by the sellers and largely passed on to consumers seeking those products. State mandatory labeling laws, such as recently enacted in Vermont and proposed in N.Y. State, among other states, would shift those costs largely to all consumers.
In total it is calculated that between 60 and 66 percent of foods sold in N.Y. State would be exempted; the study adopts the 60 percent level as it is based on more specific supermarket food categories used by the industry. Costs though are incurred on a per item not aggregate value basis. The 40 percent of mandated-labeled foods transcribes into 21,000 – 25,000 separate labeled items, or 50-58 percent of items available in supermarkets. Firms can comply with the proposed labeling requirements by either labeling or by using ingredients below the specified GM threshold level of .9 percent.
Labeling costs involve, in addition to the labeling function itself, the annual costs of warehousing more items as well as the charges leveled for stocking ‘new’ items by supermarkets. As estimated here those costs for a family of four range from $64-68, with a midpoint of $66.
The second approach to compliance is using non-GM ingredients, which may be either produced not using GM seeds, or organic. For the non-GM option estimated costs, again for a family of four, range from a low of $44 to a high of $412, with a midpoint of $228. The costs for using organic ingredients are respectively $360 to $1,552 with the midpoint at $956. Additional costs to the State include the potential loss of net farmer income from producing GM corn and soybeans, which while very real for State farmers is minor compared to direct consumer costs. There are additionally regulatory costs which are borne by the State. Adding one dollar per capita for all those costs brings the maximum range of cost, for the four person household, to $48 to $1,556 with a midpoint of $800.
Related on the SLP
Finally it should be emphasized that the figures presented here are estimates as no one knows how consumers, and the food industry, will react if labeling is mandated. The long term equilibrium under a labeling regime is unknown at this time and so the associated costs cannot be predicted with surety. What is certain is that there will be notable costs, and most of those costs will be reflected in higher food costs in N.Y. State.
Read the full, original article: Costs of labeling genetically modified food products in N.Y. state
