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 intoย 21,000 โ 25,000 separate labeled items, or 50-58 percentย of items available in supermarkets.ย Firms can comply with the proposed labeling requirements by either labeling or by usingย ingredients below the specified GM threshold level of .9 percent.
Labeling costs involve, inย addition to the labeling function itself, the annual costs of warehousing more items as well as theย charges leveled for stocking โnewโ items by supermarkets. As estimated here those costs for aย 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 producedย 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 $1,552ย with the midpoint at $956. Additional costs to the State include the potential loss of net farmerย income from producing GM corn and soybeans, which while very real for State farmers is minorย 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.
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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.
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