Several issues have been developing over the past few months that illustrate time and again the complexity of policy development, and the role science, economics and politics play in the process. For the economist, the old adage readily holds that politics always trumps economics. When it appears that politics also trumps science, you are left with a system where little is certain and consistency is a challenge.

Biotech labeling

BIOTECH LABELING: The outcome of the GM labeling debate is far from settled at this point. With some companies already adopting on-the-label information and some consumer groups fighting against anything but mandatory labeling rules, it may be that full disclosure is the ultimate outcome. (Copyright Michael Bradley, Getty Images)

Biotech labeling, or more specifically, labeling of products containing or produced with genetically modified (GM) ingredients, is one of those issues. As of the end of June, U.S. senators had forged a compromise agreement on a federal biotech labeling and disclosure rule that would supersede the mandatory labeling regime being implemented by Vermont. But, the compromise was awaiting a vote in the Senate and a vote in the House of Representatives, or a compromise with earlier House legislation to move forward to the White House for President Barack Obama's signature. That may have happened in the short July timetable in Congress before it recessed for party conventions, but it will not have happened before the Vermont language takes effect, meaning the Vermont GM labeling rules could go into effect before quickly being pre-empted by federal GM disclosure rules.

LIVESTOCK DEVELOPMENT: As a result of legislative action this past spring in Nebraska, the state Department of Agriculture worked with a committee of experts to create a proposed assessment matrix for livestock development.

Dissecting the science, economics and politics of the issues is interesting, but difficult. Opponents and even most proponents of labeling agree that the science says GM technology is safe and that the labeling issue is not about food safety. A review of the science concludes there is no inherent difference in GM and non-GM products. In fact, for some products, there is no scientifically identifiable way to discern the GM vs. non-GM product. Soybean oil and sugar molecules don't contain the protein where genes reside. Yet, the debate could demand a label on soybean oil derived from GM soybeans, and some food manufacturers are moving from beet sugar to cane sugar to avoid the perceived negative image of a GM label on their products. Some other food manufacturers have gradually implemented a labeling protocol for their products in advance of the Vermont labeling requirements.

The economics of labeling generally shows a voluntary labeling regime as the optimal strategy for society, although the same analysis can show why different groups of consumers and producers have very different policy preferences. For some consumers, the GM-free attribute is very important. A voluntary labeling regime can serve those consumers' preferences for consumption; but if their preferences are not just for their own consumption, but also for the consumption of all others, then voluntary rules can't completely satisfy their demands. Issues like GM, animal welfare or local foods that transcend personal consumption into debates about the entire food system or ag industry are exactly the kind of issues that are hard to resolve with market-driven voluntary measures.

But, if the answer is mandatory labeling, the impact can be significant for those consumers who have no preference or aversion to GM, as well as those who may suffer from higher food prices — due either to constraints in production technology or through costs of labeling and supply chain logistics required of all production.

The outcome of the GM labeling debate is far from settled at this point. With some companies already adopting on-the-label information, and some consumer groups fighting against anything but mandatory labeling rules, it may be that full disclosure is the ultimate outcome regardless of whether it is mandatory or voluntary. At this point, a federal rule may only serve to prevent further proliferation of competing rules and consumer confusion.

Organic labeling

Another related federal labeling issue involves the organic production sector, where federal labeling rules explicitly define the allowed production methods for products to be marketed and sold to consumers as organic. The organic sector has recently pushed USDA to develop a labeling protocol for operations transitioning to organic. With growth in consumer interest and purchases of organic food, there is increased interest in new operations and acreage coming into organic production.

However, one of the economic barriers to becoming organic is the three years of transition where the producer must use organic methods of production, but cannot sell production as "certified organic." The organic transition label could be a way for producers to signal to consumers that an operation is following preferred production methods and garner any potential price premiums, offsetting some of the costs of transition.

Of course, such a label implicitly signals to the consumer that a premium should be earned for the intent, not for the actual product. While scientific analysis may generally find no substantive differences in organic vs. conventional products, establishing a label for organic transition effectively says that it is the effort, not the product that matters anyway.

Other debates in the organic community over allowed production methods, particularly in relation to animal care, further demonstrate that the organic labeling rules are not explicitly about the scientific makeup of the product, but about the system of production. Again, a mix of science, economics and politics continues to drive the debate

Animal operation regulations

Sometimes, policy development actually does provide clarity and scientific rationale. Such is the case with the recently proposed livestock siting assessment matrix in Nebraska. As a result of legislative action this past spring in Nebraska, the state Department of Agriculture worked with a committee of experts to create a proposed assessment matrix for livestock development.

The matrix, which is open for comment through July, includes objective, empirical measures for a long list of various elements and proposed practices of a potential livestock operation, including size, environmental protection plans, siting, compliance record, water quality protection, odor and dust control, manure application practices and separation (from dwellings and environmentally sensitive areas), additional environmental protection, traffic, management, communications, economic impact and appearance.

The matrix offers an objective, scientific and economic approach to assessing the acceptability of a potential livestock operation. Various factors may still be subjective in the points allocation matrix, but their measurement is straightforward and provides a guide for what may or may not be acceptable in a given location. The matrix will not replace the local policy process and siting decisions. In fact, the matrix was developed as a voluntary guide, given political pressure to not pre-empt local control. But the matrix does represent a guide for more objective, empirical consideration of any proposed operations, perhaps defusing the potential for contentious, politicized decisions on a case-by-case basis.

Conclusion

From these examples and many more, one can observe the continuing influence of science, economics and politics in the policy development process. For any and all stakeholders in the process, it is important to recognize and reconcile all of the factors at play. Not everything (maybe less and less going forward) will be solved with just science or economics. Politics also matters. Hopefully, science and economics won't be completely ignored in the process.

Lubben is an Extension policy specialist at the University of Nebraska-Lincoln.