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Does Prop 37 Impose Zero Tolerance?

A bit of a debate has heated up in reference to one of the provisions of California's Prop 37, which would require mandatory labeling of GE foods.

Parke Wilde at Tufts put up a post a few days ago in which he says:

The editorial, which was widely published in other newspapers, claims that the proposal has a zero-tolerance for accidental GMO content in foods that aren't labeled as containing GMOs. Such a policy would force producers of essentially non-GMO products to use the label "may contain GMOs," simply out of fear of litigation.  But the editorial is mistaken. The initiative rightly allows foods that do not intentionally contain GMOs to carry a "non-GMO" label. 

The story was picked up by Michele Simon at the Huffington post, who took the opportunity to disparage several top-notch economists at UC Davis.  (in full disclosure, in a previous post, I too made the claim about zero-tolerance in reference to Prop 37).  

There seems to be very little room for reasonable debate here.  Proponents of Prop 37 say there will be trivial costs and no lawsuits.  Opponents of Prop 37 say the opposite.  Proponents point to the literal text of the law.  Opponents tend to point to the dynamic interactions between firms an consumers that may occur as (perhaps unintended) consequences of Prop 37.  Thus, both can claim to be "right" and the public is totally confused.  

I personally don't know what will be the ultimate consequences of Prop 37.  But, I think any reasonable person must go beyond a literalist interpretation of the proposition language if they want to understand the potential consequences.  In one of his most well-known books, Thomas Sowell argues that to really understand the economic effects of a policy, you have to move beyond stage-one thinking and ask "and then what happens?"

It is true Prop 37 doesn't literally force processors and retailers to adopt more expensive non-GE products but that may be the ultimate consequence (or it may not - but we have to keep open the possibility).  It is also true that Prop 37 doesn't literally impose zero tolerance but that may well be the ultimate consequence.  

Truth is we don't really know.  But, consider a possible chain of events at some point in the future.  Despite the wording of the law, some individual in CA tests and finds that a non-labeled product contains GE (ANY trace of GE no matter how small).  The manufacturer of the product is then sued.  Then, it would be up to the manufacturer to provide all the sworn statements of unintentional use of GE.  But, then how do you prove “unintentional” or "accidental"? This is especially when every farmer (who provides the sworn statement) knows there is some chance the seed they plant contains at least some small traces of GE.  Even if the manufacturer withstands the legal challenge, non-trivial legal costs must be incurred to prove innocence.  Moreover, if one reads the full text of the law, they can see  that after July 1, 2019, the exception for "unintentional" use disappears - making the tolerance effectively zero at that time, 

It is that sort of reading and reasoning that I think folks are referring to (or at least that I am referring to) when saying that Prop 37 imposes zero-tolerance.