LESSONS FROM THE CALIFORNIA GM LABELING PROPOSITION ON THE STATE OF CROP BIOTECHNOLOGY David...
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LESSONS FROM THE CALIFORNIA GM LABELING PROPOSITION ON THE STATE OF CROP BIOTECHNOLOGY David Zilberman, Scott Kaplan, Eunice Kim, and Gina Waterfield Berkeley Bioeconomy Conference 2013
LESSONS FROM THE CALIFORNIA GM LABELING PROPOSITION ON THE STATE OF CROP BIOTECHNOLOGY David Zilberman, Scott Kaplan, Eunice Kim, and Gina Waterfield Berkeley
LESSONS FROM THE CALIFORNIA GM LABELING PROPOSITION ON THE
STATE OF CROP BIOTECHNOLOGY David Zilberman, Scott Kaplan, Eunice
Kim, and Gina Waterfield Berkeley Bioeconomy Conference 2013
Slide 2
A QUICK OVERVIEW Proposition 37 was introduced to require
mandatory labeling of food sold to consumers made from plants or
animals with genetic material changed in specified ways. Figure 1:
Demonstrates the change in voter preference for the proposition
from July 2012 to the November 6, 2012 election date
Slide 3
POLITICAL ECONOMY OF GM Interest groups have a large impact on
regulation and use political/economic capital to influence policy
making decisions. Stakeholders against GM Organic producers,
pesticide companies and distributors. Stakeholders for GM
Biotechnology companies (like Monsanto), the farming sector using
GM, technology startups, and universities and research institutions
engaging with GM
Slide 4
PUBLIC PERCEPTION OF GM Large difference between US and
European perceptions Negative prior beliefs about GM caused a
positive WTP for labeling However, price discounts can sway
consumers to purchase GM Attitudes towards GM reflect attitudes
towards food safety and environmental sustainability Framing of GM
plays a role in decision making regarding GM, but product discounts
have a bigger impact.
Slide 5
CONCEPTUAL FRAMEWORK OF VOTING FOR LABELING Features of
framework: Heterogeneity of voters Cost of labeling Comparison of
mandatory vs. voluntary labeling Comparison to Median Voter Model
Goal of campaigningincrease consumers WTP and reduce their
perceived change in price.
Slide 6
MANDATORY VS. VOLUNTARY LABELING Price effect: With mandatory
labeling, the additional cost is distributed among all consumers
With voluntary labeling, the additional cost is distributed among
consumers who choose to purchase these products Introduction of
mandatory labeling may have a negative surplus effect on the
population Voluntary labeling always has a positive surplus effect
on the population
Slide 7
IS THE PROPOSITION AN OPTIMAL MECHANISM TO ASSESS PUBLIC
PREFERENCE? Who will vote for the proposition? People whos WTP to
avoid GM is greater than the cost of labeling Who will vote against
it? People whos WTP to avoid GM is less than the cost of labeling
However, the majority may not be willing to pay for labeling and
the proposition will lose. Yet, if the total WTP to avoid GM is
greater than the cost of labeling, total welfare due to labeling
may be positive even if the majority of people do not support
it
Slide 8
BACKGROUND ON LABELING PROPOSITION Requires the labeling of
certain plant and animal products containing GM ingredients or
processed using GM technology Significant exceptions: Meats
produced from animals fed GM feed or injected with GM materials,
medicines, food in restaurants, alcoholic beverages, and raw foods
unintentionally produced with GM materials Monitoring and
enforcement costs From farm-level monitoring of crop treatment to
regulation of GM research facilities
Slide 9
EVOLUTION OF THE PUBLIC DEBATE Arguments for labeling 1.
Freedom of information 2. No benefit/enhanced risk of GM food 3.
Small farmers hurt by large biotechnology companies Arguments
against labeling 1. Response to freedom of informationthe market
will dictate the use of labeling 2. GM increases food availability
without jeopardizing safety 3. Benefits of GM foods in the billions
of dollars, distributed among producers, farmers, suppliers, and
industry
Slide 10
PROPOSITION 37 POLLING DATA Date of PollIn
favorOpposedUndecided September 17-23, 201261%25%14% October 7-9,
201239%30%31% October 7-10, 201248.3%40.2%11.5% October 21-28,
201239.1%50.5%10.5%
Slide 11
TOP SUPPORTERS AND OPPONENTS Supporters Organic Consumer
Association (850,000 members) Whole Foods Natures Path (a non-GMO
packaged food maker which raised over $650,000) California
Democratic Party Overall, the supporters of Proposition 37 raised
$8.7 million dollars Opponents Monsanto (raised $8.1 million,
nearly outnumbering Yes side alone) Food companies (Hershey,
Pepsico, Nestle, General Mills, Kellogg) Biotechnology companies
(DOW Agrosciences, Bayer Cropscience, BASF Plant Science) Major
newspapers such as the Los Angeles Times, the San Francisco
Chronicle, and the Sacramento Bee Overall, opponents of Proposition
37 raised $45.6 million
Slide 12
1 ST STAGE (MID SEPTEMBER THROUGH EARLY OCTOBER) Pro Argument
GMOs are risky to the environment and health Anti Argument GMO
makes a big difference and saves lives Outcome Support for the
proposition did not change much
Slide 13
2 ND STAGE (EARLY OCTOBER THROUGH LATE OCTOBER) Pro Argument
Freedom of informationpeople need to know what they are eating Anti
Argument Voluntary labeling works Outcome Support for proposition
decreased from 80% to 60%
Slide 14
3 RD STAGE (LATE OCTOBER THROUGH NOVEMBER 6, 2012) Pro Argument
Voluntary labeling is nice, but expensive. Anti Argument The
proposition will cost $400/family per year The proposition has a
lot of contradictions 70% of GM food will not be examined Outcome
The proposition was defeated
Slide 15
CAMPAIGN SPENDING DIFFERENCES Source: Cal-Access, California
Secretary of State Campaign Finance website
Slide 16
MOMENTUM AND ACCUSATIONS The pro side counted on strong initial
support The anti side spent money on examining the cost of the
proposition and as the poll shifted against the proposition, more
resources became available to enforce the anti proposition Money
matters The pro side accused everyone who supported the proposition
to be bought by large businesses The anti side realized that when
people suspected that labeling would be costly, they would not
support it
Slide 17
UPCOMING RESEARCH Web based survey of representative sample of
CA voting age population two weeks prior to election Elicited WTP
for GM-free product, willingness to vote for mandatory labeling,
and willingness to vote for a ban on the use of biotechnology in
food production Mean WTP for GM-free is16.7% of price of product,
but only 40% of respondents have positive WTP WTP correlated with
both support for mandatory labeling and support for banning, but
many supporters of labeling/ban have zero WTP
Slide 18
SUMMARY OF SURVEY RESULTS How do we explain the discrepancy
between consumer and voter behavior? Implications for welfare
effects of public referenda In Favor of Mandatory Labeling? In
Favor of Banning GMOs in Food? WTP as % of Product PriceNoYes NoYes
0207159 256110 6.251432 23 18.75739 1531 31.25427 1219 43.75434
1127 62.5128 623 87.5226 919 100516 813 Total244361 340265
Slide 19
GENERAL TAKEAWAYS When people are given sound reasoning as to
why certain regulation may be excessive, they tend to vote against
it.