The truth will set you free?
There’s been a lot of discussion here about genetically modified foods and related issues. My view has been that the current state of scientific evidence does not support a general ban on GM foods but that consumers may reasonably want to be informed about whether the food they are consuming has been produced using technologies they may object to, either on ethical grounds, or because they are unconvinced about the safety of GM technology. In this respect, I’ve been very critical of Monsanto, which pushed hard to get GM foods onto the US market without any labelling requirement. Among other things, I thought this likely to be a counterproductive strategy, intensifying hostility to GM technology.
Some of my more free-market readers have argued against me on labelling suggesting that, if consumers want this information, market processes will ensure the emergence of a GM-free label. Thinking about it in the abstract, this will be true if the consumer preference for non-GM food is strong enough. And if consumers don’t care at all, then labelling won’t make any difference. There’s an intermediate zone where the choice of labelling regime might make a difference, and this has led me to support compulsory labelling.
These speculations can now be confronted with some real-world experience, with some very interesting results. As well as GM foods, Monsanto markets Posilac, a synthetic version of bovine growth hormone for cows that increases milk yields. Farmers producing milk without Posilac have advertised the fact, and have been very successful in capturing market share.
As a result, Monsanto, through a front group, Afact, is now lobbying legislatures to ban the advertising of non-BST milk. Their argument is that, since there is no scientifically demosntrable difference between the two products, advertising the way in which they are produced can only mislead consumers. So now it’s the pro-GM side who are arguing for intervention to suppress information they think consumers can’t handle.
It would be interesting to work through the consequences of requiring advertisements to exclude emotional appeals based on actual or implied differences that couldn’t be scientifically proven to matter to product quality. I’d say that ad breaks would get a whole lot shorter, and lots of ad agencies would be out of business.
Leaving such fantasies aside, the Posilac case certainly supports the pro-market side of the debate we’ve had here. A voluntary labelling system has produced a thriving market for the non-GM product, to the extent that some think Posilac-based producers will be driven out of business, at least in the fresh milk market. I don’t think that things will work so neatly, but I will certainly think a bit more about my position on this.
On the other hand, the case illustrates once again that those who put their faith in big business to support market processes are bound to be disappointed. Examples like this help to separate genuine believers in markets from backers of business interests. One commentator who definitely falls into the latter group is Alex Avery of the Center for Global Food Issues at the Hudson Institute (his father, Dennis Avery heads the Center). Here he is cheering on prohibition of advertisements of, among other things, claims that cows are not treated with rbST.