Should Retailers be Required to Stock Conventional Eggs?

According to the Des Moines Register

The Iowa Senate gave final passage Monday to a controversial bill requiring Iowa grocers in a supplemental food program to offer conventional eggs if they sell eggs from chickens housed in a cage-free, free-range or enriched colony cage environment.

House File 2408 was approved 32-17, sending it to Republican Gov. Kim Reynolds for her consideration. It was approved in the House last week on an 81-17 vote.

Sen. Herman Quirmbach, D-Ames, opposed the bill, complaining that it’s clearly contrary to free enterprise, anti-regulation policies espoused by Republicans. “This is really direct interference in the marketplace,” he said.

But Sen. Dan Zumbach, R-Ryan, who farms in northeast Iowa, lauded the legislation for assuring that a low-cost choice for protein is available when many low-income Iowans head to the grocery store. Free-range or cage-free eggs are typically more expensive than conventional eggs from large farming operations.

The background context here is that many retailers have made pledges to only stock cage free eggs, and some states have passed laws banning the sale of eggs from hens in the most confined cages. 

As readers of this blog likely know, I'm a big fan of consumer choice, and have done a fair amount of research on the costliness of policies that would remove products from the marketplace.  I've also routinely pointed to the benefits of practices and technologies that increase agricultural productivity.  Thus, one might suspect I'd be a proponent of the new law.  While I'm not necessarily opposed to it, I'm less sanguine about the long-run potential benefits.   

I suspect the bill will largely be interpreted as a producer protectionist measure.  One concern with a bill like this is that it might raise an issue to the attention of consumers that wasn't previously on the radar screen and might create a PR problem for the industry and invite threat of future disadvantageous legislation.  A consumer who wasn't thinking about this issue now sees a bill supported by the egg industry requiring sellers to offer a certain option.  What is their reaction?  It could be: "What's the egg industry trying to do that retailers are forced to stock an option they don't want to stock?" Or, maybe even: "I now need a bill requiring that cage free is also provided."  If one is skeptical that issue like this might create PR problems, the failure of the question 777 "right to farm" initiative in Oklahoma is instructive.

I'm not sure there are many other parallels for policies that would force sellers to provide an option.  That is, shouldn't freedom work both ways? Freedom for consumer to choose from what is offered but also freedom for producers/retailers to decide what to produce and sell?

If consumers really won't bear the cost of retailer pledges to go cage free, there will be a pretty strong incentive for retailers to reverse course.  I view retailer pledges to go cage free in fundamentally different light than a law to ban conventional eggs; one is a market-based decision and the other is not.  If retailer A pledges to go cage free and most consumers aren't willing to pay the higher cost, then there will be an incentive for retailer B to offer a lower-cost conventional version for people who are more price sensitive.  No such option is available if there is a blanket ban.

The egg industry is surely trying to "fight fire with fire" by using the political process in a way that animal advocacy organizations have to advance their interests.  If animal advocacy organizations can convince voters or a legislature to ban conventional egg production, then the egg industry can use a similar process to require conventional egg sales.  In that sense, perhaps all is fair in love and war.  What I'd rather see both sides do, however, is to try to convince consumers (and the retailers who sell to them) of the the merits of their cause rather than to get to a desired end by fiat.