Impact of Process Labeling

The Council for Agricultural Science and Technology (CAST) just released a new paper on the impact of process food labeling.  The paper was written by a number of top-notch ag economists including Kent Messer, Marco Costanigro,  and Harry Kaiser.  It's a nice summary of the issues involved in the labeling of food processes (like organic or non-GMO or rbST free) as opposed to labeling food outcomes (like calories).

The summarize five points after reviewing the literature:

1. Consumers want to have a sense of control over the foods their families eat.
2. Food markets are characterized by asymmetric information. Producers know more about the quality of the products than consumers. Many important quality traits are unknown until after consumption, or they are never revealed.
3. Consumers are not well informed about the various technologies used in the agricultural and food sector of the United States; however, they have greatly benefited from the tremendous technological progress that has occurred over the past century.
4. Consumers use process labels as cues to infer quality traits that are important to them, such as taste, food safety, and the environmental and societal impacts.
5. There is strong evidence that consumers consider process labels, frequently adjust their behavior in response to them, and, when these labels imply a negative aspect of a food, can shun that product.

They also present a number of challenges presented by these sorts of labels, such as

Process labels can be used by marketers to stigmatize rival conventionally produced products, even when there is no scientific evidence that food produced in this manner
causes harm.

The authors end with some policy recommendations.  Here's the first one:

Mandatory labeling should only occur in situations in which the product has been scientifically demonstrated to harm human health.