Won’t Cost a Dime? Average Family Food Bill Would Rise $490 a Year Under I-522, Says Opposition Report

As Genetic-Food Labeling Campaign Heats Up, Opponents Unleash Argument That Carried Day in California – Backers Claim Zero Cost

By Erik Smith
Washington State Wire

Scene from a yes-on-522 ad that debuted Monday.

Scene from a yes-on-522 ad that debuted Monday: ‘If it is genetically engineered it has to say so. It is that simple and it won’t cost you a dime.’

OLYMPIA, Sept. 17.—Advocates of Washington’s Initiative 522 say it won’t cost a dime, but a new opposition report says that if voters require warning labels on genetically modified food products, the typical family of four would pay an additional $490 a year for groceries.

That’s because I-522 would make Washington the first state to require labeling – meaning special packaging for the Washington market, and quite likely different products with different ingredients. And the hit to consumers would just be the start, opponents say – regulation also would cost state government tens of millions; farmers, manufacturers and grocery stores would have to spend hundreds of millions more to comply. There’s also the fact that third parties can sue to enforce the law. The sky might be the limit.

It is a voter-tested argument, unleashed in California last year when that state’s similar Prop. 37 made the ballot. Checkstand impact was one of the big reasons Golden State voters rejected the measure 51-49. And now that the same battle is being repeated in Washington state, the arguments certainly have a familiar ring. “Recycled from the California campaign,” says Elizabeth Larter, spokeswoman for Yes on 522.

Of course it’s recycled. Californians did think of it first. But does it make the argument any less valid? For anyone to make the claim that I-522 will cost nothing is absurd, says Kriss Sjoblom of the Washington Research Council. “The debate is not about whether there are going to be costs, but really about how big the costs are going to be.”

Won’t Cost a Dime

Former  Attorney General Ken Eikenberry is featured in opposition ad.

Former Attorney General Ken Eikenberry calls measure ‘the opposite of truth in labeling.’

Both sides of the big-spending campaign unleashed their first television ads Monday, and it has become clear that I-522 is the showcase campaign of an otherwise sleepy off-year election. The money is pouring in from national sources, from activists and bioengineering companies alike. So far the yes campaign has raised $3.6 million and the opposition has raised $11.1 million. Yet to this point most attention has gone toward the form of the campaign – the fund-raising and the similarities between Washington and California – and not the content of the argument.

I-522 would require front-of-the package labeling for most grocery products that contain genetically modified ingredients – affecting as much as 70 percent of the products on supermarket shelves today – as well as labeling on the seed stocks farmers use. Advocates call it a right-to-know issue, say they aren’t out to change shoppers’ behavior, and insist they are taking no position on the safety of common foodstuffs. That avoids an argument about science, perhaps a tough one to win, given the preponderance of scientific opinion that genetically modified food products are safe. But allegations of danger and harm lurk just below the surface of the campaign, and they even show up in the language of the initiative itself. It says warning labels are warranted because of “adverse health or environmental consequences,” “toxicants and health concerns,” “toxic herbicides” and “health risks.”

And what about the checkstand factor? No need to worry about that, says a campaign ad that made its debut Monday: “It won’t cost you a dime.”

Somewhere North of Zero

Washington Research Council report figures in no-on-522 ad.

Washington Research Council report figures in no-on-522 ad.

Certainly it won’t cost a dime, allows the Research Council’s Sjoblom – tens and hundreds of millions is more like it. The Research Council, a Washington-based business-oriented think tank, was commissioned by the no-on-522 campaign to produce a report summarizing all known cost impacts of the measure. At the same time the campaign commissioned an economic analysis by Northbridge Environmental Management Consultants, the same firm that estimated costs of the California initiative. Together the reports offer a rather convincing argument that the cost will be decidedly north of zero.

For one thing, the state says so. The Office of Financial Management, charged with estimating the impact of ballot measures on state agencies, concluded last month that the cost to taxpayers would be at least $3.4 million over six years. That is the cost of rulemaking by the state Department of Health, inspection and compliance, education and technical assistance, and for contracting with a private laboratory for product sampling and testing. The fiscal note says the cost of enforcement is “indeterminate” – meaning the $3.4 million might just be the start.

Of course it would be higher than that, Sjoblom says. “The OFM estimate of regulatory costs is really low,” he says. “It really contemplates a minimal regulatory apparatus. If you just take a look at the existing regulatory system we have for organic foods, and you blow that program up proportionally to the greater amount of sales that are subject to this requirement, you get a substantially higher regulatory cost.” The state organics program costs $2.5 million. Do the extrapolation and you get an annual budget of $22 million.

You also can expect the food industry to demand a higher level of regulation, Sjoblom says. That’s because the initiative allows third parties to sue if they believe laws are being broken. Strict state regulation might help insulate industry from litigation – lawyers may be the only thing it fears more than regulators. Meanwhile, paperwork record-keeping requirements impose a cost on businesses, as they track food ingredients from the field to the shelf and demonstrate their compliance. Northbridge estimates one-time implementation costs at $264 million — $28,273 for every retailer and $45,285 for each processor and other intermediaries. Annual paperwork costs would total $48 million a year.

Hit on the Pocketbook

Pike Place fishmonger Chris figures in yes-on-522 ad: "It's simple and it won't cost you a dime."

Pike Place fishmonger Chris in yes-on-522 ad: “It’s simple and it won’t cost you a dime.”

For voters the point that hits home is the wallop on the wallet. It was the game-changing argument in California, and it deserves particular attention here. The analysis depends on the year involved. Through July 1, 2019 the measure requires the labeling of all food products with 0.9 percent genetically modified content by weight; after that date the threshold is any genetically modified content at all. Northbridge estimates the cost for a family of four at $360 a year through 2019; after that point it is $490.

There is an important assumption involved – that the whole idea behind labeling is to discourage consumers from purchasing foods made with genetically modified ingredients, and that manufacturers would rather avoid the stigma of a warning label. Northbridge argues they would reformulate their products for the Washington market. “Companies would source different ingredients or manufacture their products in a way to avoid labeling them with a vague and frightening warning,” its analysis says.

There is some reason to believe that is true – it was the experience when labeling requirements were imposed on European Union countries in 2003. The few genetically modified products that were available at the time were largely withdrawn from the market. But it is a big problem here – some 90 percent of American corn and soybeans are grown from genetically engineered seed. So Northbridge envisions a scenario in which Washington food processors and manufacturers bid up the price of organic and non-genetically-engineered foodstuffs – hence higher food prices for Washington customers. The report goes through a lengthy analysis of food costs before arriving at its precise calculations.

One point about the Northbridge analysis, though — it assumes all manufacturers would substitute ingredients, and that none would settle for a genetically-modified label. That assumption might be suspect as well. But even if only 80 or 90 percent of them change their products to avoid labeling, one certainly can expect to see an effect, Sjoblom says. And the idea that labeling would impose no cost at all is absurd.

“The people who are saying that it won’t cost anything are assuming there will be no substitution of genetically engineered ingredients – that all that happens is that manufacturers are going to put labels on their existing products but the products offered for sale will not be changed,” he says. “Even if manufacturers follow that course, there is going to be some cost involved with the changing of labels. So it is not going to be zero.”

No Counter for Argument

Dan Newhouse, former director of the state Department of Agriculture is featured in opposition ad.

Dan Newhouse, former director of the state Department of Agriculture: ‘It is so badly written that pet food would be covered, but meat for human consumption would be exempt.’

Maybe the most surprising thing about the cost argument is that advocates for the initiative don’t appear to have an answer for it. The regulatory costs go unaddressed. Where consumer costs are concerned, it is precisely the same argument made in California, and more than a year has elapsed since it was sounded in the Prop. 37 campaign. And yet the reports and position papers issued here by advocates choose to argue other points, just as they did down south. For instance, a report posted last week on a grassroots organizing website called Just Label It focuses on the cost of redesigning packaging and concludes that it is trivial.

The closest thing to a direct response comes from the same website: A blog posting Tuesday about the Research Council report is headed, “Despite New Report, No Cost for Label Changes.” Yet the cost of changing labels is cited nowhere in the Research Council report. The blog posting says obliquely that the substitution of ingredients is a matter of speculation and assumes “significant changes in shoppers’ purchasing behavior” – which some might argue is the basic idea. But it doesn’t attempt to refute the argument.

Larter of the Yes-on-522 campaign argues that the cost argument is a scare tactic. It’s just a label. “Food manufacturers are constantly having to relabel. This is just adding a couple of words to the front of the package. That is not going to increase the cost to Washington grocery shoppers.”

She makes one other point about the Research Council report: “Your readers ought to know that the ‘no’ side paid them to do this. This wasn’t like some out-of-the-blue goodness-of-their-heart study. They were paid to do this by the ‘no’ side.”

Sjoblom bristles at that implication – it ducks the argument by casting aspersions. “We have been in business since 1932,” he says. “We stand behind every study we publish. And their claim in their statement we can’t be trusted is an insult.”

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  • 4theisland

    Sjoblom is insulted? Cry me a river.

    • Erik Smith

      For the sake of clarity, 4theisland — Washington State Wire is not financed by “right wing think tanks.” Thanks for your concern. — Erik Smith

      • Jane Wenemeg

        So just you then, Erik? Congratulations, your blog entry is a featured “article” from the Washington State Wire on the No to 522 website. The right people must be very pleased with you.

        • Eddie

          Jane … I have, for many years considered Erik one of the best old school, in depth, reporters we have in Washington. We are very lucky to have him. Your thinly veiled accusations that his work is somehow disingenuous, because his report didn’t come out how you would like, reeks of sour grapes. Frankly it’s become all to common for the left and the right to resort to personal attacks. I tire of it. When someone digs out the facts and presents some alternative reasoning we all benefit.

          Erik – thank you for the facts and the in depth story. I’ll be voting yes in any event- out of my own deep personal disdain for Monsanto.

          Eddie

  • Allen

    Those who do not want to buy GMO foods. A suggestion. Don’t. If a food label does not say on the package NO GMO, assume that it is. No law needed. If the market place does not provide enough choices of foods so labeled that is a free market choice, not a legal problem.

    • 4theisland

      Stop your nonsense. There’s no such thing as a “free market” in food and has been since 1906. Have you never heard of the Pure Food and Drug Act, which saved millions of people from being poisoned by “free market” advocates? That was 107 years ago.

      http://en.wikipedia.org/wiki/Pure_Food_and_Drug_Act

      Initiative 522 is an extension of this at the state level. It was determined 107 years ago that people have the right to know what’s in their food, that is has to be labeled, specifically, and that the government can and should enforce accurate labeling. So much for your “free market.” If we did as you suggest, people’s food budgets would REALLY take a hit.

      • Allen

        Well here is an idea. One that I already mentioned. If a food is not labeled as NO GMO, then buyers should assume that it is. How tough is that? No law needed. If there is really this huge demand for NO GMO, some big companies are going to go out of businesses. As they should, if that is what the market wants.

        • Jane Wenemeg

          Interesting argument, since every GMO proponent seems to be absolutely sure that if companies are required to label whether or not their food is GMO, that they’ll expend vast sums of money to replace ingredients with “specially handled, higher priced ingredients” aka “Not Genetically Modified.” If it’s so simple that everyone should just assume if a food isn’t labeled non-gmo that it is gmo, then why should any company worry at all?

          Companies have to print packaging regardless. It will require very little to add an icon which reflects whether they use GMO foods or not. No company is required to change any of their ingredients. If they elect to do that because consumers want GMO foods, then fine. They’re responding to the market. That Monsanto is terrified the general public will become more aware of how much their food supply is being replaced by genetically modified crops alone is reason to support this bill.

          The market works best when there is healthy regulation to protect consumers, ensure honesty, and work against monopolies. If this law fails, it won’t be because it would have hurt consumers, it will be because Monsanto pumped millions of dollars into a website and ad campaign to distort, mislead and otherwise cloud the issue, which in the end, is very simple.

          Monsanto is not a good company. They are litigious, wreckless, and recently voted least ethical company out of several hundred big name companies. They are interested in controlling food through patents in any way possible. They are a near monopoly and have locked almost all American Farmer’s into ironclad agreements which are nearly inescapable. That’s the opposition, and there is reason to fight them.

  • ProgressiveNW

    I-522…. really I could not care less one way or the other. I already shop GMO free, by buying certified organic. They are GMO free. It’s easily done these days. Has anyone else noticed the number of Organic foods available at Safeway now as compared to say 3-4 years ago. Amazing. Organic costs more that is for sure, but it’s worth it to know my children are not ingesting pesticide residues. I expect I already spend more then $490/yr extra.

    • lgpw

      ProgressiveNW – Its obvious you are a shill for the NO on 522.

      • ProgressiveNW

        If my common sense life experiences are that threatening to the 522 campaign then for sure they are in trouble. Too bad. Monsanto is an evil corporation and they could be taken down a notch. I can root for yes to win for that reason alone. The canola lawsuits in Canada alone are reason to want Monsanto to go down.

        But as far as my food and my family’s groceries…doesn’t matter. We are Organic already.

        • Frankenberry

          And you do not care about the families and kids that cannot afford organic foods…

          and you do not eat out where you can get plenty of Frankenfoods. Many restaurant support 522 because they do not want to serve GMO’s but think customers will not pay for organic foods.

          • ProgressiveNW

            Nutrition classes and food stamps are available. A lifestyle of poverty, does not preclude one from buying organic, starting a food garden, joining the Oly Co-Op where they can trade hours for organic food. BTW on the rare occasion we eat out at a restaurant we still eat organic.

            We already have food labels that allow for choices to be GMO free … these choice are available to EVERYone.

            .

          • Jane McCabe

            Please don’t drag the co-op into your anti 522 drivel, especially since they clearly support it.

          • ProgressiveNW

            Last time I checked co-op was made of individual members with individual points of view.

          • Allen

            Truth at last. The goal is not labeling food, a mere label will not make organic foods less expensive. Anyone who wants to buy only organic foods may do that. If they can afford it.

            The goal is to eliminate GMO and force everyone to make the same choice you make. Consumer freedom is an evil thing if one is a true believer. :-)

          • littlepig117

            You make no sense. Since GMOs are an added ingredient it should be labeled. Just like when water or salt or red 9 is added to a label. Genetic engineering is not natural therefore should be labeled. If the food is labeled gmo how is that forcing people to eat like you? People can choose whether to continue to eat GMO food that is properly labeled as such.

          • AlreadyOrganic

            Added ingredient? Ah, yeh, corn and soybeans are added ingredients as is milk and beef which aren’t covered in this issue. As for the ‘natural’ argument about GMO…. Bees have been genetically modifying flowers (and the resulting seeds) for years. I find most fault with the label of GMO… should be Humanly Altered Organisms about which I think people are offended.

            I do like how people tend to jump over the fact that the tracking from grower, to producer, to distributor, to consumer will cost money. And more money to check the compliance of the issue. Great even bigger government now.

    • AlreadyHaveIt

      I agree. There already are rules and regulation regarding organic foods and many stores carry these. Why add cost to the system for an ‘idiot’ system for people who cannot read labels with any intelligence? Yes, it does make it easier for ‘at the glance’ type of shopper, but most of the arguments to the ‘Yes’ crowd seem to be about being informed shoppers. How can you be informed if you don’t read the ingredients or the labeling?

      Idiot proofing everything doesn’t work and never will.

  • ChronicKindness

    I will vote yes. But, I find the YES522 camp to be more than a little disingenuous. They say this is simply about labeling. Just to give consumers a choice. Then they make a ton of arguments about eliminating GMO from the planet.

    We, as previously commented here, already have these healthy choices. Both organic and voluntary “GMO free” labels are plentiful in my grocery stores. This change was driven by the consumers. I remember five years ago there was NO organic food at the mainstream grocery store. But we consumers changed that with our dollars and the industry responded. I think the same will be true of GMO.

    We don’t need 522 … but I’ll vote for it anyway… not to give consumers a choice as the YES camp likes to say …. but to eliminate GMO from the planet. That is the real agenda of the YES 522 camp, and one I can actually get on board with.

    • Jane Wenemeg

      How about this argument: because the opponent is Monsanto, and Monsanto is, in a word, evil. I don’t throw that word around much. I’m also not someone people would call a Luddite. I’m in the scientific and tech communities. GMO is a tough one for me. I tend to be very big on peer-reviewed sort of studies and the fact is, there isn’t any conclusive, studied evidence that GMO food is bad for you.

      To me, one problem is that GMO is inherently dangerous. When you start tinkering with the genetic structure of crops which the entire planet relies upon… what happens if you get it wrong in a way you can’t fix? What happens if you change some genes which start to cause some part of the population to begin rejecting that food almost as an allergy? What happens if you tweak something which seems like junk DNA, but actually has long term, reproductive genetic consequences? What happens if one of your crazy crop tests – which was ordered destroyed – starts popping up elsewhere? (which is even more a danger since the “Monsanto Protection Act” was passed into law.. Yet another shady example of this company at work behind the scenes.) And for what? So crops can survive the poisons that Monsanto sells to kill the bugs that attack crops? There has to be a better way, especially when this way puts the futures of all farmers – and the health of nearly every human in the country – into the loving, litigious, scary hands of Monsanto?

      Wanna read some sad stuff? Head on over to Wikipedia and read through the controversies section of Monsanto. These are not good people.

      • ChronicKindness

        Should have quit while you where ahead. In rejecting the hysteria presented in your comment i am finding it difficult to vote with you.

        • littlepig117

          Please don’t vote based on a comment section on the internet.

    • littlepig117

      But you have no problem with the camp that doesn’t want you to support the bill destroying the lives of small farmers and who’s ultimate goal according to a former employee is to control the worlds food supply with GMO food. The reason people want to elimate GMO’s is because the crops are invasive.

      Meaning you can have a farm and your neighbors GMO crops land in your farm and take over your crops. Monsanto finds out and sues you because you are growing their crops in your field. Then they force you to buy their roundup chemical supplies. I beg you to look at the big picture. Please watch “the world according to Monsanto” and “genetic Roulette”

      http://www.bloomberg.com/news/2013-05-29/monsanto-modified-wheat-unapproved-by-usda-found-in-oregon-field.html

  • Kim Knerl

    http://youtu.be/QtJJ1muz-s4

    Those who will tell you to vote against I-522 are large chemical corporations with home offices outside of Washington, while those who support a YES vote on I-522 are your family members, friends and neighbors, people who live and work and raise their children in Washington. The question you have to ask yourself before casting your vote is, “Who do Itrust?” The truth is these large corporations are only concerned about their profits, while your family and friends have a genuine interest in your wellbeing.

    Take a look at the few supporters who are paying millions of dollars and hiring top public relations professionals in an effort to deceive the citizens of Washington and influence you to vote their way. The list includes Monsanto, DuPont Pioneer, Bayer Cropscience, Dow Agoscience, and the Grocery Manufacturers Association. Do you feel these corporations actually have any interest in your family’s personal life or security? The truth is, these large corporations are only concerned that Washington residents will choose to purchase products that don’t support their business.

    Don’t let their millions of dollars control the way you think. Join the real people of Washington and vote YES on I-522.

    • Organic Eater

      And the Yes supporters don’t produce organics which should get a big boost in sales due to this issue?

  • Alvin Monero

    So the writer of this article has already received his cash envelope from Monsanto huh? I hope the Grassroots yes-i522 groups of WA campaign door to door hard and heavy because Monsanto is about bring down a world of electoral fraud and deception upon your citizens through the media outlets they will buy off.
    Trust me they will. Just as what happened last year in California here.`

  • Todd Bailey

    This bill as is stands is reckless. I’m ok with forcing the food chain to label their products, but not at the state level. I’m voting NO because this bill needs to be presented at the federal level. Wa state has no business regulating food products and labelling the contents.

  • Jane McCabe

    I don’t understand how this is an issue that would cost consumers. Labels are changed for marketing purposes all the time, and labels already vary from region to region. I sincerely hope these false arguments against labeling our foods don’t sway any voters.

    • Gary Val Tenuta

      Jane – No one knows what the costs to consumers will be. The Pro-522 don’t know and the Anti-522 don’t know. Here’s why: http://www.inlander.com/Bloglander/archives/2013/10/29/what-we-know-about-whether-i-522-will-cost-us-money

      • Jane McCabe

        Nothing in that blog makes sense. Labels change by season and are already different from region to region. GMO crops do not yield more food. So saying changing labels would increase cost is false and saying that it’s more expensive for farmers to grow non gmo foods is partially false. I imagine switching from gmo crops to non gmo may come with growing pains, but if that’s what the consumers want then it should be worth doing.

        • Organic Already

          Certifying anything costs money due to the process and enforcement of the labeling. Yeh, printing a label doesn’t cost much but if you want the label to stand for anything, it needs to be trustworthy. Where will all these free workers come from which track and police the truth in the labels? Are you volunteering? Bigger government is not cheaper government and bureaucrats cost big bucks.

    • Organic Eater

      If only it were just labeling. The end product supplier (i.e. grocery store or restaurant supply house) could get in ‘trouble’ if there is any mistake in the paperwork which tracks the product from field to table. Now the end product supplier has to read and analyze the paperwork involved, which costs employee time, which costs money. You now have a larger government to track, document and fine people/corporations/businesses which don’t comply and government costs money. etc,..

  • Lulu

    “Change of Ingredients” Why change ingredients? Adding (GMO) to a label is not costly as I’m sure by the time they would have to start doing it they would run out of old labels and can re-order new ones with those 5 extra characters. Dr. Bronners changed their label for the campaign and it didn’t cost them anything besides what they would pay to re-order labels anytime. Assuming that Organic or non-gmo suppliers would increase their prices for no reason also makes no sense. They would profit just from the increase in sales if manufacturers do indeed change ingredients. Why change them? if so many people don’t care why wold they stop buying them because it says (not warns) that the product is made with gmo’s?

    As for the exceptions those don’t make any sense whatsoever.