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Prop 37 will cost California agriculture $1.2 billionProp 37 will cost California agriculture $1.2 billion

New study demonstrates $1.2 billion cost of Prop 37 to California farmers and food processors.Prop 37 a crush of costly regulations with no benefits.

September 10, 2012

3 Min Read
<p> <strong>There are an estimated 71,000 acres of marijuana under cultivation each year in California. That represents 121 square miles or an area equivalent to the size of Sacramento.</strong></p>

Proposition 37 would result in $1.2 billion in higher costs for farmers and food processors, higher prices for consumers and a crush of costly regulations with no benefits, according to a new study by two University of California, Davis, agricultural economics professors.

“The proposed regulations have no basis in science and impose rules that would have significant costs for food producers, processors and marketers, and ultimately for consumers, while providing misinformation and no demonstrable benefits,” University of California, Davis, Agricultural and Resource Economics professors Julian Alston and Daniel Sumner conclude in a study released today.

Proposition 37 is a food labeling measure that would ban the sale of tens of thousands of safe, common grocery products only in California unless they are specially repackaged, relabeled or made with higher cost ingredients. This new, 48-page report from researchers at one of the world’s top agricultural universities conclusively reveals that Proposition 37 threatens California's economy and ability to compete with other states, and would impose costs directly on shoppers, farmers, manufacturers, seed companies, grocers and workers.

According to the study, Proposition 37 would:

• Impose about $1.2 billion in additional costs on California food processors to meet its burdensome requirements.

• Impose higher costs on farmers, including those who do not produce any genetically engineered (GE) crops, because their products are often used as ingredients in foods that also contain ingredients from GE crops.

• Place California farmers and researchers at a competitive disadvantage with the rest of the nation.

• Result in higher price tags on many of the foods Californians eat, because food manufacturers and retailers could be forced to change the methods used to produce them, either by switching to non-GE products for certain crops or by forcing separate processing, labeling, packaging, recordkeeping, and distribution channels just for California.

• Place an increased burden of higher grocery costs on consumers, especially the poor who spend a larger share of their income on food.

• Adversely affect the environment if food companies and farmers switch to non-GE crops for certain varieties, which consume more acreage and use more pesticides than is needed for pesticide-resistant GE crops.

• Hamper progress and innovations in developing crops that are resistant to disease, pests, frost and drought. “Foreclosing the local market for GE products will provide a competitive advantage to researchers in other states and nations to the disadvantage of the California economy,” the study finds.

Benefit failure

• Fail to provide any meaningful benefits, in the form of improved information, improved product safety, or an expanded range of choices for consumers. “In fact, Proposition 37 would reduce choices by potentially driving some food products containing GE ingredients from the market,”states the report.

• Impose restrictions on the use of the word “natural” on food labels.  According to the report: “Imposing ‘unnatural’ restrictions on the use of the word ‘natural’ on food labels would mislead and confuse consumers because producers of farm commodities such as fruits, vegetables and tree nuts that are simply dried, roasted, juiced o r otherwise lightly processed, in many instances on the farm, would be precluded from using the term “natural” on the product label.”

• Offer far smaller benefits to the organic industry than advertised, and instead will impose higher costs and demands on organic producers. “The food industry would more likely shift to ingredients that are non-GE, but also not certified organic,” the study finds.

• Fly in the face of more than 400 studies that have determined genetically engineered foods are perfectly safe. The National Academy of Sciences, the World Health Organization, more than twenty-five Nobel Prize winning scientists, and other respected academics and doctors have endorsed the safety of biotech foods.

The new University of California, Davis study concludes: “If passed, Proposition 37 would imply that necessarily ill-informed popular opinion should dominate accepted scientific consensus in deter m ining government-set mandates on food,” conclude Alston and Sumner.

About the study’s authors:

Julian Alston, PhD, is a professor in the Department of Agricultural and Resource Economics, University of California, Davis.

Dan Sumner, PhD, is Frank H. Buck Jr. professor in the Department of Agricultural and Resource Economics , University of California, Davis, and director of the University of California Agricultural Issues Center.

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