A sound statistical reason to consider transitioning toward non-GMO crops

A new consumer analysis published by the Agricultural & Applied Economics Association shows that retail food consumers will pay almost exactly the same price premium for "Non-GMO Certified" apples as they will for "USDA Organic" apples. 

Nov. 7, 2017    By Jerry Carlson — That's just one highlight of the analysis of the study in which more than 1,100 people were asked what they'd pay for a pound of apples or a pack of granola bars. It documented that the surveyed consumers attach virtually the same health benefit to "Non-GMO" as they do "Organic."

A second key finding shows that the genetic engineering industry really knew what they were doing when they lobbied for a federal "GMO labeling" law which allowed food retailers to camouflage GMO content behind a QR code on the label. With only a QR ("Quick Response") code versus a clear written statement of GMO content,  a food shopper must scan the QR image with a smartphone, visit the manufacturer's website and read the manufacturer's disclosures about the product.

 

Quick Response code example

The researchers compared what price consumers would pay for apples or granola labeled clearly with a written statement such as "This product contains genetically engineered ingredients," versus the same products with only the QR code disclosure. Answer: For apples, buyers were willing to pay about 35 cents per pound more if the label displayed only a QR code, versus a clear written statement of GMO content. Put more bluntly, the designation "Contains genetically engineered ingredients" imposes a severe discount at the retail display. Certainly, the U.S. food industry already knew that. The national labeling law also prohibits the states from enacting their own GMO labeling requirements.

Another fascinating fact: The researchers who conducted and published this study are based at Purdue University and the University of Florida. Both institutions are powerful supporters of transgenic crop technology, and the support to those universities from biotech corporations is mutual. The authors are University of Florida assistant professor of food and resource economics Brandon McFadden, and Purdue University agricultural economics department head Jayson Lusk. A news release describes their effort as "research on the best ways to communicate whether a product has genetically modified ingredients."

I can't fathom why such a disclosure on a label should be so difficult that the sophisticated food industry needs research to make such a simple disclosure clear, instantly, without an online search. The authors reason, based on the severe price penalty imposed by a simple written GMO label, that the QR codes are seldom scanned before purchase. The QR escape hatch was highly effective and beneficial for the biotech industry.

The relevant fact for farmers is that consumers are catching on, fairly quickly, and finding ways to express their preferences for non-GMO foods. If you can grow for the certified non-GMO designation, that appears—at the retail level—to have almost the same value as organic. It could take a while for the volume of non-GMO labeled sales to accelerate, but there's a good chance that non-GMO premiums for commodities like corn and soybeans could widen again. Growers who are ready can tap those margins. Wider cost-price margins are more critical than ever at current commodity prices.

The online version of the publication, Produce Retailer, has a summary of the study at this link

An abstract of the study is available on the Oxford Academic presentation of the journal, "Applied Economic Perspectives and Policy." For $42, you can buy 24-hour online access to the paper at the link shown in this paragraph.