NEW ECONOMIC STUDY: PROP. 37 WOULD INCREASE GROCERY BILLS FOR TYPICAL CALIFORNIA FAMILY BY HUNDREDS OF DOLLARS PER YEAR
August 29, 2012
Study finds Prop. 37 would increase the cost of food sold in California by up to $5.2 billion annually
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Sacramento – A new economic study released today finds that by requiring food producers to relabel, repackage or remake thousands of common grocery products with higher priced ingredients, Proposition 37 would increase the cost of food sold by as much as $5.2 billion per year.
These higher production costs would be passed on to California consumers in the form of higher food prices, increasing the typical family’s grocery bill by an average of $350 to $400 per year.
“Prop. 37 will drive up grocery costs for California families, while providing absolutely no benefits,” said Jamie Johansson, an Oroville farmer who grows olives to make olive oil. Mr. Johansson is also second vice president of the California Farm Bureau Federation. “It’s a hidden food tax and it comes at the worst possible time to add more financial burden on consumers and food producers, when we already face an economic downturn and a severe drought.”
For nearly 20 years, biotechnology, or “genetic engineering,” has been used to create modern varieties of corn, soybeans, canola and other crops that are more resistant to pests and diseases or have other beneficial properties such as drought resistance or faster growth. The majority of packaged food and beverage products contain GE ingredients. Most meat and dairy animals in the US are fed on GE grain or silage.
Prop. 37, on the California November 2012 statewide ballot, would create a complex labeling scheme that would require special labels on some food and beverage products that contain GE ingredients, but exempt others.
It would effectively ban the sale of tens of thousands of perfectly-safe, common grocery products in California unless they are specially repackaged, relabeled or remade with higher cost ingredients. Prop. 37 mandates that by 2019, products must contain zero percent GE, or they must be labeled. It also prohibits processed food products from being labeled as “natural” in California, even if they contain no GE ingredients and no additives of any kind. These labeling regulations and restrictions do not exist in any other state or country in the world.
According to an economic impact study of Prop. 37 by Northbridge Environmental Management Consultants, if Prop. 37 passes, food companies would face important decisions about the production of more than 100,000 food items. While it is impossible to predict what food companies would do to comply, they could take two approaches:
- One is to switch to higher-priced non-GE or organic ingredients to avoid having their products labeled “genetically engineered.” The Northbridge study estimates that remaking food and beverage products with non-GE or organic ingredients would increase the costs of food products sold in California by $4.5 – $5.2 billion annually. On average, this would increase food costs for a typical California family by about $350 to $400 per year.
- Another possibility is to create special labels for the food products sold in California, noting that the products contain or may contain “genetically engineered” ingredients, as required by Prop. 37. The Northbridge researchers estimate that if all of the 100,000 or more grocery products that contain some level of GE ingredients were segregated and relabeled just for California, it would cost food companies $300 to $800 million.
Opponents of Prop. 37, including family farmers, scientists, doctors, business, labor, taxpayers and consumers, say the measure makes no sense from a scientific or economic standpoint and provides no health or safety benefits to consumers. In fact, the complicated regulations, restrictions and exemptions created by Prop. 37 would confuse and mislead consumers and unnecessarily increase their food costs.
The overwhelming scientific evidence has shown that foods with genetically engineered ingredients are safe, and that requiring special labels is both unnecessary and misleading. In fact, the National Academy of Sciences, World Health Organization, the American Medical Association and many other venerable and independent scientific bodies have studied genetically engineered foods and found them to be safe. In June 2012, just two months ago, the American Medical Association adopted a policy position stating that, “There is no scientific justification for special labeling of bioengineered foods.” The FDA says labeling policies, such as Prop. 37, would “be inherently misleading.”
About Northridge Environmental Management Consultants
Northbridge is a financial, economic, and management consulting firm specializing in environmental issues. From offices in Westford, Massachusetts and Washington, DC, Northbridge serves clients in the federal government, state agencies, state and national trade associations, and corporations. Additional information about the firm is available at its web site, www.nbenvironmental.com.