What is the economic impact of mandatory labeling?
The cost of labeling involves more than the paper and ink to print an actual label. Costs arise from establishing and maintaining a system to track ingredients, from monitoring and enforcement or compliance with the law, from trade impacts, and from other factors. However, the impacts on producers, retailers, and consumers are likely to be varied, resulting in a net benefit to some while imposing a net cost on others.
Impacts along the value chain: Full and accurate labeling of specific ingredients may require an extensive identity preservation (IP) system from farmer, to elevator, to grain processor, to food manufacturer, to retailer (Maltsbarger and Kalaitzandonakes, 2000; Auer, 2003). Either testing or detailed record-keeping needs to be done at steps all along the value chain, or it would not be possible to know what specific ingredients are contained in a final food product. Other options could be less costly, such as using more general labeling language that does not require an extensive IP system.
In addition to these direct costs, there are also indirect costs. Food manufacturers and retailers may choose to avoid foods containing GM ingredients, requiring new formulations and sourcing arrangements. With a significant shift in demand away from GM crops, farmers would have to shift to potentially higher cost production and pest control methods.
Public costs for monitoring and enforcement: Costs would be borne by taxpayers to pay for agricultural and food authorities to monitor and enforce compliance with labeling requirements. These could vary significantly depending upon the terms and conditions of the requirements that are imposed.
Trade impacts: Another form of impact would be on trade in agricultural products. Imported products would have to comply with labeling requirements. This might effectively prevent some products from being imported and sold if the supplier of the product is unable to verify the origin of all of their contents. On the other hand, producers with verifiable labeled non-GM food products might find new export options to those countries that have comparable requirements.
Impacts on consumers: It is almost certain that food prices would increase to some extent as costs increase due to a labeling requirement. Estimates of the costs of mandatory labeling vary from a few dollars per person per year up to $400 per year or 10 percent of a consumer’s food bill (Gruere and Rao, 2007; Alston and Sumner, 2012; Lesser, 2014). These higher prices would be borne by all consumers, but especially by lower-income consumers, who devote a higher share of household income to food purchases.
No one understands those CA compliant MEK stickers and they don't stop anyone from bathing in the stuff.
