Science vs. Consumer Sovereignty in Food

This from a forthcoming book chapter by Wally Huffman and Jill​ McCluskey:

The scientific consensus is that first-generation GM foods are equivalent to their conventional counterparts. However, on average, consumers want a discount in order to choose first-generation GM products over conventional products. Thus, the public’s perception of risks, rather than scientifically proven risks, that directly affect markets. This brings up the issue of scientific versus consumer sovereignty (Roberts, 1999). Although the scientific consensus is that GM foods are completely safe for consumption aside from potential allergens, it may still be the case that a majority of the population in a given country prefers to avoid GM foods. We find that information provision affect valuation and the source of information matters.

When people are informed about the science of biotechnology, they can become more accepting of GMOs in food.  Yet, this is hardly the only (or even the most persuasive) information confronting the food consumer.

Source: Huffman, W.E. and J.J. McCluskey. “Labeling of Genetically Modified Foods.” In P.W.B. Philips, S. Smyth and D. Castle, eds., Handbook on Agriculture, Biotechnology and Development. Northampton, MA: Edward Elgar Publishing, forthcoming. 

The Science of Sugar

Three years ago, this YouTube video of a talk by Dr. Robert Lustig, a Professor of Pediatric Endocrinology at UC San Francisco, when viral (to date, the video has 2.7 million downloads).  His argument there, and subsequently in prestigious journals like Nature, is that sugar is toxic.   

I’m going to be honest, I haven’t invested the time to adequately evaluate the claims made about the biology, endocrinology, and metabology of sugar, but I suspect there is some truth to the argument that some foods are metabolized differently than others – in other words, it is more complicated than just “calories in, calories out” (although this adage is also almost certainly true on some level). 

What I do know is that the science of sugar is not nearly as certain as Lustig purports, a fact mentioned by Gary Taubes who is overall sympathetic to his claim (see also the citations in second paragraph of Lustig’s Wikipedia page).

Lustig is an accomplished and well-published scientist.  But, what bothers me is the all too common stance of many folks in the medical and public health communities failing to appreciate how little they know when they move to realms beyond their particular academic expertise.

The viral YouTube talk included a beginning slide with the words “Letting Science be the Guide” and Lustig personally began a speech in 2011 by asserting that “Ultimately science should drive policy.” Yet, I find it a bit ironic that neither of these talks seriously discusses the economic science behind the many sugar-recuing policies he supports. 

Economic study after study after study after study shows sugar policies (such as sweetened beverage taxes or bans on school vending machines) will only have very small effects on intake and weight.  When sodas are taxed (or banned), people can substitute toward other caloric drinks such as fruit juice or alcohol. Moreover, food taxes are regressive - meaning the burden is disproportionately borne by the poor.  It is also worth pointing to the economic research on farm policy and sugar production reveals a much more complicated situation than many pundits presume, with the authors showing that the “link between US sweetener consumption and farm policy is weak.” 

So the next time you hear someone pronounce that the “government has to get off its ass” because of sugar consumption, I suggest asking what economic science actually says about what will happen when the government moves it’s preverbal backside. 

Addendum:  One of my colleagues pointed out that the arguments used to claim sugar is addictive (primarily that our body becomes accustomed to a level of intake and requires more and more to achieve a given level of satisfaction) sounds remarkably like the psychologist’s notion of the hedonic treadmill – a phenomenon that is posited to hold for almost all aspects of life.

The Cost of Mandatory GMO Labeling

Not five minutes after posting on the potential effects of mandatory labeling genetically modified foods in California, I came across this release summarizing the recent work of Dan Sumner and Julian Alston, both agricultural economists at UC Davis. 

The bottom line: they estimate that Prop 37, if passed, would cost Californian farmers and food processors $1.2 billion. 

Although I understand the appeal of the “right to know” argument to the average consumer, what is less clear to me is why labeling of genetically modified food should, on economic grounds, be mandatory.  If the information is valuable to consumers, firms and farmers can profit by providing it.  And they have! 

There are already many voluntary labeling programs consumers can use if they wish to avoid biotechnology including organic and certified non-GMO labels.  Of course, these products are more expensive than conventional products – but that’s because they are more costly to produce.  But, it simply isn’t true that Californians do not have a choice to buy GMO or non-GMO foods.

Unintended Consequences of Mandatory Labeling of Genetically Modified Food

​This November when Californians go to the polls to vote for Romney or Obama, they will also vote on Prop 37.  If passed, the proposition will require mandatory labeling of genetically modified food.

Proponents of Prop 37 argue that Californians have a right to know what’s in their food, that it would be essentially costless for agribusinesses and food retailers to simply add a label, and that it would send a message to multinational agribusiness firms.  I’ll address the first two issues in future posts, but for now I’ll simply say that the presumption that labeling will somehow help small farmers and food processors is probably mistaken.  Increased regulation often increases the power of large incumbent firms (who can employ teams of lawyers and strategists) - much to the surprise and dismay of regulation supporters.

Here is what Dan Murphy at Drovers recently had to say about the issue:

If GMO labeling becomes a hot-button problem, the executives decided, it will hit heavier on smaller companies—just like nutritional labeling and HACCP and every other regulatory initiative put in place over the last several decades. All that does is thin out the competition for shelf space, since the added costs are more easily passed along to the end user by the category leaders, as opposed to manufacturers struggling to hold onto market share.

Are Fat Taxes a Good Idea? Ask Denmark

Denmark recently implemented a tax on saturated fat.  Most of the economic research on the topic suggests that such taxes are likely to have little effect on weight and health.  It appears the Danish goverment is finding out the hard way.  ​

According to this story, here is the Danish experience​:

Only one year after its implementation, the Danish government is planning to scrap the “fat tax”. The reason why: reports show that it simply doesn't work.

Denmark is now likely to abolish the tax levied on saturated fats, as empirical evidence shows that its negative effects outweigh the benefits for the Danish Treasury. In particular, reports point to job losses in the food processing industry and Danes crossing the German border to buy cheaper products.