Monday, January 16, 2006

Can you handle knowledge about GMOs?

Sensible economists, who want markets to serve consumers well with a minimum of government intervention, generally want consumers to be well informed. The idea is that if food sellers have information about product characteristics and quality, but consumers do not, then there may be a market failure. On the other hand, when consumers know what producers know, the free market works marvelously to protect the public interest. With well informed consumers, the most desirable products reap the ultimate beneficial incentive -- high sales and high profits.

The controversy over labeling food from Genetically Modified Organisms (GMOs) is a good place to find out what the U.S. food industry really thinks about free markets and the public interest. It is not just that the industry has opposed mandatory labeling of GMO products in the United States (such labeling is the rule in Europe). Astonishingly, the industry doesn't even want producers who forego GMO technology to label their products with this fact. Currently, federal rules forbid producers from using a GMO-free label if the purpose is to claim that the product is superior, which is of course the point of such a label.

For a good balanced summary of the issue (indeed, I must confess, more balanced than I have the equanimity to muster for this post), see the article by William Hallman and Helen Aquino in the most recent issue of Choices. The argument for the current policy is that GMO food products are essentially the same as non-GMO products, and hence it would be misleading to allow GMO/non-GMO labeling and certainly misdirected to require such labeling.

For me, the most compelling part of the article was the account of whether consumers want GMO labeling. I really don't believe that consumers are too stupid to decide for themselves, and I certainly can't tolerate the hypocrisy of paternalism disguised as consumer protection when it comes from the pro-GMO forces in the U.S. food industry. After reading the chart below, I say give the sovereign consumers what they want.

Figure 1

Consumer Desire for Additional Information on Food Labels

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