Last updated on August 28, 2016
Back in June 2014, I published a post titled “GMO Labeling: Bad for Organic Farmers?,” in which I wrote:
Imagine you are convinced that GMOs are bad for you (if you read this blog regularly, it is probably difficult for you to imagine that, but I want you to try nonetheless). Now, suppose you live in a world where there is no GMO labeling. There are two kinds of food out there: organic, and non-organic food. It is quite possible that some non-organic food is GMO-free, but there is no way for you to know. What you do know, however, is that organic food is GMO-free with certainty. So you tend to buy lots and lots of expensive organic food.
Now, suppose the government of the country in which you live decides to pass a law that would force food producers to put a label that says “Contains GMOs” on any food that does contain GMOs. “Groovy!,” you think to yourself.
Why do you say that to yourself? Because now you are facing three types of food: (i) organic food, which is GMO-free and more expensive than non-organic food; (ii) non-organic food with GMOs, which you are not going to purchase; and (iii) non-organic, GMO-free food, which is cheaper than organic food.
If you are like most consumers, you act rationally, and you substitute away from expensive organic food toward cheaper non-organic GMO-free foods. Sure, some of your friends (and maybe even you) still choose organics, but at the market level, all things being equal, people tend to be individually rational, and to gravitate towards the cheaper of two goods. And that is exactly why it is likely that GMO labeling laws will end up putting more than a few organic producers out of business.
Here is what Dan Charles wrote for NPR’s The Salt earlier this month:
Now, organic food companies are starting–cautiously–to voice concerns about the non-GMO label, too. They’re worried that shoppers have become so fixated on GMOs that they don’t realize how little it actually means, compared to organic.
“It’s a little frustrating, to be honest,” says Jesse LaFlamme, CEO and owner of Pete and Gerry’s Organic Eggs. “OK, it’s great that there’s a non-GMO symbol on there. But do you understand that that product might have been produced with pesticides, antibiotics, and with no regard for animal welfare?”
The emphasis is mine. As Oscar Wilde said: “There are only two tragedies in life: one is not getting what one wants, and the other is getting it.”