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Uninteded Consequences of Mandatory Labeling

In light of the impending vote on Prop 37, which would require mandatory labeling of GE food in California, I found this post from David Henderson ​back in July about a previous mandatory labeling initiative in California to be quite telling:

I went on line a few days ago to order some vitamins. One of the items I ordered was Green Tea Complex. When I tried to place the order, I got a message in red saying that I couldn't order Green Tea Complex. So I deleted that item and the order went through. Today I went to the local GNC to buy the item I had bought many times before. It was on the shelf and so I picked up two. I told the salesman that I hadn't been able to order it on line. He explained that there is one Green Tea Complex for California and one for the other 49 states. I asked why. He said it was because the ones sold in the California have the Proposition 65 warning that the item contains ingredients that may cause cancer. (If I recall correctly, this Proposition, passed in 1986, was the first one I ever got to vote against, after I had become a U.S. citizen earlier that year.)
"Do you think the ingredients are any different?" I asked him. He answered that he didn't think so and that the only difference was probably the absence of the warning on the non-California bottle.

Why the Cities are Not Likely the Farms of the Future

This piece in the Wall Street Journal​ argues:

The seeds of an agricultural revolution are taking root in cities around the world—a movement that boosters say will change the way that urbanites get their produce and solve some of the world's biggest environmental problems along the way.

​There some problems with this line of reasoning.  Here are just a few:

  • As pointed out by Harvard professor Ed Glaeser last year, some of the biggest environmental problems comes from commuters driving into the city.  Diverting potential living space to crop-growing space keeps some people out in the suburbs who would otherwise live in town.  The environmental costs of their commutes is likely much higher than any environmental benefits from local food.
  • More generally, there are very high opportunity costs to land in the city.  In non-economic terms: land in the city is really valuable because there are many alternative uses for it.  ​While I have no issue if a city-based farm is sufficiently profitable  to out-compete all the other alternative uses for the land, it is much more difficult to argue that such activities are deserving of public praise or funding.  
  • As we pointed out in a piece last year, ​transportation accounts for a relatively small portion of the environmental impacts of food production (and the overall cost of food for that matter).  The implication of this insight is that production costs (and emissions) are often lower if you produce food where it can be most efficiently grown and then ship it to where it is consumed.  
  • Using greenhouses to grow produce (such as tomatoes) in northern climates (e.g., New York, Chicago, Boston) is likely to produce many more carbon emissions than ​growing produce in the naturally warm environments like Florida and shipping north (see this review).

Here is a nice review of the existing research on the topic.  The authors say:​

Thus, advocacy for ‘local’ food suggests that it is generally better overall to consume local food than food  produced ‘non-locally’. However, a priori reasoning would question the universality of such claims, as every location is local to someone, but all locations are non-local to most people. 
​and

We conclude that food miles are a poor indicator of the environmental and ethical impacts of food production. 
​

​

Mark Bittman and economics

In this recent piece in New York Times Magazine, Mark Bittman concludes:​

But beyond the profit motive, there is little public support or encouragement for them or their ideas and no way for consumers or even officials to know whom to support. As a result, our land use and, to a considerable extent, our diet are dependent on the hunches and whims of landowners. If we want a system of farming that’s sustainable on all levels, we have to think about a national food and farming policy.

If landowners' "hunches and whims" aren't what dictates how they choose to use their land, whose "hunches and whims" do we follow?  Apparently those of a cookbook writer in NYC living over 2,000 miles away.​

​Apparently, Bittman is no fan Hayek.  Farming is not the only use of land.  And, it is by no means obvious it is the best use of land.  Market prices are what inform us as to the relative value of land (and other assets) that can be put to alternative uses.  And it is exactly those "hunches and whims" of the owners of assets who, by responding to prevailing prices, guide resources to their most valued use.  The people who are willing to fork over the money to buy the assets and the people who'd receive the money to give up what they own are the ones suited to truly judge the value (not people who have no skin in the game - e.g., cookbook writers).  

If you think California land should be used in a way different than it is being put to use by current land owners, it's time to put your money where your mouth is and put in an offer.  Until then, I have some good reading to recommend.