NYT Editorial on My Food Policy Study

Yesterday, the New York Times ran an editorial on the political fight over GMO labeling.  In the piece, the editorial board cited one of my studies (with Marco Costanigro) in the following passage:

“There is no harm in providing consumers more information about their food. A study published in the journal Food Policy in 2014 found that labels about genetic modification did not influence what people thought about those foods.”

I want to add a clarification and caveat to that statement.   What we found (in the context of an internet survey), is that the addition of GMO labels didn't make people more concerned about GMOs than they already were.  That is, the addition of a label didn't seem to send a signal that GMOs were more risky than consumers already thought they were.  

However, we did find that consumers would attempt to avoid foods with a GMO label.  Consumers' choices in our studied implied they were willing to pay as much $1.98/lb to avoid an apple that has a mandatory "genetically engineered" label relative to an unlabeled apple.  As I discussed just yesterday, it is precisely this issue that is the big potential driver of the costs of mandatory labeling.  That is, if some segment of consumers tries to avoid GMO labels, retailers and food manufacturers may respond by trying to source more costly non-GMO crops.    

Finally, I'll note that despite the above quote, that different types of GE labels in fact had very big effects on what people "thought" or were willing to pay for GE foods.  In particular, we compared how willingness-to-pay (WTP) for an unlabeled apple varied when there were apples with mandatory labels (i.e., "genetically engineered) vs.  voluntary labels (i.e., "not genetically engineered").

We found that the WTP premium for the unlabeled apple relative to the apple labeled "genetically engineered" was the aforementioned $1.98/lb.  However, the WTP premium for apples labeled "not genetically engineered" relative to the unlabeled apple was only $0.81/lb.  Thus, the implied willingness-to-pay to avoid GE was [(1.98–0.81)/0.81] ∗ 100 = 144% higher in the mandatory labeling treatment as compared to the voluntary labeling treatment.  In the paper, we write:

“The differences in responses to mandatory vs. voluntary labels may result from the asymmetric negativity effect, which may in turn result from differences in what these two labels signal about the relative desirability of the unlabeled product. The differences in the “contains” vs. “does not contain” may also send different signals and change beliefs about the likelihood that the unlabeled product is GE or non-GE.”

One more point that I just can't led slide.  The editorial also mentions the following:

“Various polls have found that about 90 percent of Americans favor mandatory labels for genetically modified foods.”

Yes, but about the same percentage of consumers say they want mandatory labels on foods with DNA.  And, when you directly ask people, the vast majority say they don't want the issue decided by state ballot initiatives but rather by the FDA.  And, we've had real-life ballot initiatives in five states now, and all have failed to garner more than 50% support.  Whatever positive reasons may exist for mandatory labeling, the cited "90% of people want it" reason is the most dubious and misleading.

An often forgotten benefit of biotech crops

Discussions on the environmental benefits (or costs) of genetically engineered crops tend to focus on relative volumes and toxicities of herbicides applied, effects of Bt, and possibilities of cross pollinating native plants.  In so doing, what is often missed is an important environmental benefit of herbicide resistant crops.  In particular, if a farmer can control weeds by spraying the entire field with a herbicide like glyphosate, that means they don't have to use other methods of weed control (like plowing) that may lead to soil runoff.  

A new paper just released by the American Journal of Agricultural Economics by Edward Perry, GianCarlo Moschini, and David Hennessy tackles this issue. Here's a portion of the abstract:

“We find that glyphosate tolerant soybeans and conservation tillage are complementary practices. In addition, our estimation shows that farm operation scale promotes the adoption of both conservation tillage and glyphosate tolerant seed, and that all of higher fuel prices, more droughty conditions, and soil erodibility increase use of conservation tillage. We apply our results to simulate annual adoption rates for both conservation tillage and no-tillage in a scenario without glyphosate tolerant soybeans available as a choice. We find that the adoption of conservation tillage and no-tillage have been about 10% and 20% higher, respectively, due to the advent of glyphosate tolerant soybeans.”

It should be noted that herbicide tolerance isn't unique to biotechnology.  There are several "non GM" crops on the market that are tolerant to certain herbicides but are not genetically engineered, at least as the term normally used.

Cost of Vermont's GMO labeling law

Back in 2014, the Vermont legislature passed a law mandating labels on certain foods produced with genetically engineered ingredients.  The law is set to go into effect this summer, and it has prompted a lawsuit and at least a couple federal attempts at a GMO labeling law to provide uniform standards across all states (the most recent is a bill by senator Pat Roberts from Kansas).

Against this backdrop comes a new study on the potential costs of Vermont's law.  According to Agri-Pulse:

“A new study funded by the Corn Refiners Association concludes that if Vermont’s mandatory labeling law were allowed to go into effect and spread nationwide, the increased cost of producing food in the U.S. would reach about $82 billion per year, or about $1,050 per family.”

That's a sizable sum, and one that's somewhat larger than the often-cited $500/family from  William Lesser of Cornell who estimated the costs of such a policy in New York.  We can add this new study to other previous ones like that of Julian Alston and Dan Sumner of UC Davis who estimated a $1.2 billion cost on California food processors when  that state had a ballot initiative back in 2008.  Tom Marsh and other economists estimated the costs (just of monitoring and oversight) in Washington State of over  $700,000/year when that state had a ballot initiative in 2012.  Here's a nice discussion of labeling effects by some Colorado State University agricultural economists produced with that state held a ballot initiative.

Of course a lot of pro-labeling groups dispute these estimates, and have written their own reports to "debunk" them, (though I find it curious that none of the de-bunkers have much economics training, while each of the authors of the above reports are respected and well known agricultural economists).  The organization Just Label It, for example says

“there’s no evidence that requiring food manufacturers to label products that contain genetically modified (GMO) ingredients will increase food prices at the supermarket.”

So, where's the truth?  All the studies (by pro- and anti-labeling groups alike) rely on assumptions.  One assumption often made by pro-labeling groups is that the government costs of monitoring and enforcement are essentially nonexistent.  As the Washington study suggests, however, that's unlikely to be true and these extra costs will either manifest themselves in higher taxes or higher food prices, depending on how they're funded and people respond.  Pro-labeling groups are right to suggest that the physical costs associated with changing the label are relatively small and close to the "cost of ink."  The much bigger question, and where most the controversy arises, is how food companies will respond to the label.  If they respond by seeking to source non-GM crops, the cost implications could be quite significant, and this is how we arrive at numbers like $1050/family (the new Vermont study also assumes manufactures will have to comply in all states not just Vermont because of possibility of liability if one of their unlabeled products sold elsewhere unwittingly finds itself on a store shelf in Vermont).  If instead food companies shrug their shoulders and just slap the label on all their products, the costs are likely closer to just the physical re-labeling costs and the government oversight and regulatory costs.  

So, how will retailers respond to the label?  My guess is that the answer is somewhere between the extremes: some will dis-adopt GM and others won't.  Thus, the expected cost should be calculated by multiplying the costs of disadoption by the anticipated likelihood of disadoption.   I find it a bit hard to believe that all retailers will fully move away from GM content to avoid the label (i.e., that the probability of full disadoption is 1).  Why?  A lot of consumers are unconcerned about GMOs and many more have no opinion on the issue, and thus there will remain an incentive for food companies to remain cost competitive.  Also, the US is going to produce a lot of GMO corn no matter the labeling policy because around 40% of the corn crop goes into our gas tanks as ethanol and most of the remaining corn crop is used for animal feed (and animal products are typically exempted from the label).  These much larger demanders of corn, as opposed to comparatively small demands for high fructose corn syrup or corn starch, are likely to drive the market for corn.  

So, all this would suggest that $1,050/household/year is an upper-bound estimate associated with the mandatory labeling law.  And, I think that's true, except for one thing.  The potentially much larger (and admittedly more speculative) costs could come about if we create a culture and market environment that is hostile to the introduction of biotech crops and crop technologies.  What future innovations will we forego if retailers chose to disadopt?  We may never know, but it would be a mistake not consider these opportunity costs.

Food Journalists are Pollanized

This piece by Hermione Hoby in the Guardian is a prototypical example of uncritical food journalism that fully accepts the narrative and philosophy of the so-called food movement.  The article is a quasi-interview with Michael Pollan and discusses his forthcoming Netflix series based on Pollan's 2013 book, Cooked.  

In a testament to Pollan's influence on food-types, Hoby says that he and others have been "Pollanized."   

Perhaps the most remarkable claim in the piece is this one:

“[Pollan] is also uncomfortable at being thought of as evangelical (one magazine called him “America’s high priest of food”); his mode is investigative, not prescriptive.”

To say that Pollan's "mode" is investigative, not prescriptive is wholly at odds with the facts.  And, the authors inability to discern that truth probably represents one reason why Pollan has been so influential. People read Pollan's stories (he is a great writer) and don't realize the implicit persuasion and moral the stories are attempting to instill.   Journalists don't bother to get the other side of the story and they often don't bother to read/watch what he says when not writing books.   I previously touched on this:  

“One challenge is that many popular food books (by folks like Pollan, Moss, Warner, etc.) often refrain from specifically mentioning much about policy in the book. But, then when your see these authors out on the interview circuit, they often talk a lot about policy and advocate all kinds of things. This has the consequence of their writing appearing more centrist and “ideologically neutral” than is actually the case, and it also lets the authors off the hook by rarely putting them in a position of having to seriously defend their policy proposals. ”

The truth, of course, is that Pollan has repeatedly offered prescriptive advice for policy makers and for food consumers.  He wrote a 2008 article for the New York Times Magazine entitled Farmer in Chief and was a co-author of a 2014 editorial in the Washington Post outlining a "national food policy." These are chock full of prescriptive policy proposals.  And, he constantly gives prescriptive dietary advice (just google "Pollan quote"). Here is perhaps his most well known: “Eat food. Not too much. Mostly plants.” (without any hint of irony, Hoby offers this very quote later in the piece).

You can agree or disagree with Pollan's policy or eating advice, but to say his mode is "not prescriptive" is frankly absurd.  

The author also seems to miss the irony of Pollan claiming:

“I’m uncomfortable with the foodie label, it gets stuck to me all the time.”

This is all said while Pollan eschews the salmon because it's farm raised, changes his mind on an order of squid ink tagliatelle because it is from the "the Rohan duck’s provenance - a farm in upstate New York", and then finally dines on a $53 lunch of butternut squash soup, duck leg, and cheeses with names like Moses Sleeper, the Bayley Hazen and Ascutney Mountain .  If this doesn't describe a foodie, then I don't know what does. There's nothing wrong with being a foodie*, and it stretches credulity to believe Pollan is anything but.  To claim otherwise is to render the word "foodie" meaningless.

*I consider myself a "skeptical foodie", which is the title of the first chapter of my 2013 book The Food Police.   

False Beliefs about Food Stamps

In this post on the University of Illinois Policy Matters blog, Craig Gundersen tries to lay to rest a few false beliefs (or misconceptions) that may people (and policy makers) have about the Supplemental Nutrition Assistance Program (SNAP, also known as "food stamps").

Does SNAP participation lead to obesity obesity?  Gundersen writes:

“It is not clear why people would think SNAP leads to increases in obesity insofar as one doesn’t generally think that increasing someone’s ability to purchase food leads to higher weights. For example, one doesn’t usually think that a pay raise leads to increases in someone’s weight. Along with common sense, virtually all studies indicate that SNAP recipients are no more likely than eligible SNAP non-recipients to be obese, after controlling for selection into the program and other issues.”

Does SNAP participation cut down hunger?  Gundersen writes:

“the central goal of SNAP is to alleviate hunger and, in this role, SNAP has been enormously successful. (See Kreider et al., 2012, and references therein.) Along with these direct impacts on food intakes, SNAP has also been found to improve well-being over other dimensions including reductions in poverty (e.g., Tiehen et al. 2012), improvements in birth outcomes (Almond et al. 2011), lower mortality (Krueger et al. 2004), and better general health (Kreider et al. 2012). Moreover, by reducing food insecurity, the negative impacts of food insecurity on various health outcomes are diminished. (See Gundersen and Ziliak, 2015 for a review of these impacts on health.)”

If you've got a relatively decent income, it might be hard to imagine how SNAP could have such dramatic hunger and health effects, but it is important to keep in mind Engel's Law: the poor spend a larger proportion of their income on food than the rich.  That phenomenon is alive and well in the US, and I can see it in my Food Demand Survey (FooDS) data, which measures food expenditures.  Here's how estimated spending on food varies with household income, as measured by FooDS.

If you're on the right tail of the income distribution spending only about 5% of your income on food, then it is probably hard to imagine how food spending and eating will change when you're on the left tail of the distribution where food consumes almost 25% of the household's budget.

Finally, Gundersen takes on the idea that various health restrictions on SNAP spending will have much impact.  He writes: 

“If restrictions are imposed, there is unlikely to be any change in obesity in the U.S. Instead, the main consequence will be a reduction in the number of SNAP participants. This reduction is due to two factors, stigma and transaction costs. (I concentrate on the former here, for a discussion of the latter, see Gundersen, 2015.) Stigma would increase as participants would feel singled out as being irresponsible and incapable of making well-informed food purchases. More broadly, through its message that adults receiving SNAP are not responsible enough to make their own food choices, recipients would be further stigmatized. After all, the federal government doesn’t tell, say, government employees how to spend their earnings; why do some feel it is fine to tell SNAP recipients what they can purchase? This stigmatization due to restrictions is the central reason why the USDA has rejected proposed restrictions.

Due to increased stigma and increased transactions costs, participation in SNAP will decline as recipients leave the program and potential recipients are less likely to enter the program. (For at least some advocates of SNAP restrictions, this may be their central goal for imposing restrictions.) As a consequence, the positive benefits of SNAP will be realized for fewer Americans and, in particular, there will be an increase in food insecurity and, therefore, increases in negative health outcomes and subsequent health care costs (Tarasuk et al., 2015).”

To that I'll add that most SNAP participants can easily get around the restrictions on what they buy by rearranging what they buy with SNAP and what they buy with non-SNAP dollars (see my explanation of that phenomenon here).  

One might reasonably ask whether SNAP spending is too low or too high, and alternative variations on the program might be worth considering.  Either way, decisions about SNAP's future should be ideally based our our best understanding of the program's impacts rather than false beliefs.