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.

Consumer Uncertainty about GMOs and Climate Change

A lot of the debate and discussion surrounding public policies toward controversial food and agricultural issues like GMOs or climate change revolves around public sentiment.  We ask people survey questions like "Do you support mandatory labeling of GMOs?"  However, as I've pointed out, consumers may not even want to have to make this sort of decision; they would prefer to defer to experts.  Thus, we're presuming a level of understanding and interest that consumers may not actually have.  This is related to the recent discussion started by Tamar Haspel in the Washington Post about whether the so-called food movement is large or small.  Are "regular" people actually paying much attention to this food stuff that occupies the attention of so many journalists, researchers, writers, and non-profits?

I had these thoughts in mind as I went back and looked at this post by Dan Kahan who took issue with Pew's survey on public opinions about GMOs (this was the survey that attracted a lot of attention because it showed a large gap in public and scientific opinion on GMOs).  Kahan wrote:

“the misimpression that GM foods are a matter of general public concern exists mainly among people who inhabit these domains, & is fueled both by the vulnerability of those inside them to generalize inappropriately from their own limited experience and by the echo-chamber quality of these enclaves of thought.”

and

“That people are answering questions in a manner that doesn’t correspond to reality shows that the survey questions themselves are invalid. They are not measuring what people in the world think—b/c people in the world (i.e., United States) aren’t thinking anything at all about GM foods; they are just eating them.

The only things the questions are measuring—the only thing they are modeling—is how people react to being asked questions they don’t understand. ”

This let me to think: what if we asked people whether they even wanted to express an opinion about GMOs?  So, in the latest issue of my Food Demand Survey (FooDS) that went out last week, I did just that.  I took my sample of over 1,000 respondents and split them in half.  For half of the sample, I first asked, "Do you have an opinion about the safety of eating genetically modified food?"  Then, only for people who said "yes", I posed the following: "Do you think it is generally safe or unsafe to eat genetically modified foods?" For the other half of the sample, I just asked the latter question about safety beliefs and added the option of "I don't know".  This question, by the way, is the same one Pew asked in their survey, and they didn't even offer a "don't know" option - it had to be volunteered by the respondent.  So, what happens when you allow for "I don't know" in these three different ways? 

When "don't know" is asked 1st in sequence before the safety question, a whopping 43% say they don't have an opinion!  By contrast, only 28% say "don't know" when it is offered simultaneously with the safety question.  And, as the bottom pie graph shows, only about 6% of respondents in the Pew survey voluntarily offer "don't know".  Thus, I think Kahan's critique has a lot of merit: a large fraction of consumers gave an opinion in the Pew survey, when in fact, they probably didn't have one when this option was allowed in a more explicitly matter.  

Moreover, allowing (or not allowing) for "don't know" in these different ways generates very different conclusions about consumers' beliefs about the safety of GMOs.  Conditional on having an opinion, the percent saying "generally safe" varies from 40% in the sequential question to 50% in the simultaneous question to 39% in the Pew format which didn't offer "don't know."  That support can vary so widely depending on how "don't know" is asked is hardly indicative of stable, firm, beliefs about GMOs among the general public. 

In last week's survey I also carried out the same exercise regarding Pew's questions on climate change.  For half of my sample, I first asked whether people had an opinion about the causes of changes in the earth's temperature; for the other half, I included "don't know" as an option simultaneous with the question itself.   Here are the results compared to Pew's, which again did not explicitly offer a "don't know."  

Again, we see big differences in the extent to which "don't know" is expressed depending on question format, varying from 37% in the sequential version to only 2% in Pew's survey.  In this case, it appears that people who would have said "don't know" in the sequential question format are more likely to pick response categories that disagree with scientists, when they are given questions where "don't know" isn't so explicitly allowed.  

What can we learn from all this?  Just because people express an opinion on surveys doesn't mean they actually have one (or at least not a very firmly held one).  

11 things to know about GMOs

Over the past year, I'd received a large number of inquiries about GMOs.  Some of the questions were from moms, others from farmers, and sometimes from the media.  It seems a common set of questions continued to come up, so I got together with my colleagues Eric and Cheryl Devuyst to put to together this University Fact Sheet to provide some succinct answers.

We answer the following 11 questions as best we can in a mere two pages.

• What is a GMO?
• Why are crops genetically modified?
• Are GMOs safe to eat?
• What crops in the U.S. are genetically modified?
• What are the environmental effects of GMOs?
• Do farmers need to use more pesticides with GMOs?
• How are GMOs regulated?
• Are GMOs banned in Europe?
• Should food companies be required to label foods with GMOs?
• What are the economic effects of farmers using GMOs?
• What are the potential downsides of GMOs?

You can find our answers here.

Food Company Voluntarily Adds GMO Labels

This is a potential game changer (from the NYT):

“Breaking from its industry rivals, Campbell Soup will become the first major food company to begin disclosing the presence of genetically engineered ingredients like corn, soy and sugar beets in its products.”

A while back when writing about the duplicity of a many food companies on the issue of GMO labeling, I wrote

“For now, food companies are not required to add labels indicating the presence of genetically engineered ingredients. But, it might ultimately be in their best interest to do it voluntarily, and in a way that avoids the negative connotations implied by the labels that would have been mandated in state ballot initiatives.

Some day in the near future, after concerted efforts to educate the public and create consumer-oriented biotechnologies, we may see food companies clamoring to voluntarily add a label that proclaims: proudly made with biotechnology.”

Campbell's isn't going that far (and in fact they're supporting nationwide mandatory labels on foods with genetically engineered ingredients).  Nonetheless, this is an interesting move, and it will be fascinating to see how it plays out.