Voters in two states rejected ballot initiatives last week that would have required foods containing genetically modified organisms to carry labels identifying the presence of such ingredients, handing big wins to food manufacturers like General Mills (NYSE:GIS), Kraft Foods, and PepsiCo that oppose such laws and have donated large sums of money to combat them.
But the passage in Maui, Hawaii of a measure to ban companies like Monsanto (NYSE:MON) and Dow Chemical (NYSE:DOW) from planting GMO crops until the county analyzes the impact lab-engineered foods have on public health and the environment indicates the food manufacturers have only won the latest skirmishes in a much larger war that's still being fought.
Colorado voters resoundingly rejected by a better than 2-to-1 margin Proposition 105 that would have required any "prepackaged, processed food or raw agricultural commodity that has been produced using genetic modification" to be labeled as "Produced with genetic engineering." In a narrower win -- 51% to 49% -- Oregon voters also shot down Measure 92 that mandated GMO foods "produced with genetic engineering" be labeled "in a clear and conspicuous manner."
The failure of the initiatives follows similar defeats elsewhere around the country, and to date only three states have passed such measures. Vermont passed a GMO label law this spring, though an injunction on its implementation is in effect until court challenges to its legality are decided, while Connecticut and Maine have passed laws as well, but require other states to also pass GMO label laws before theirs can go into effect.
These statewide efforts are really a sub-optimal solution as they would impose an unreasonable burden on business in trying to meet the requirements of a patchwork of individual state laws. A single national policy such as one set by the FDA would be best, but the FDA maintains GMOs are safe for human consumption so there's no need to label them.
That's an arguable position to take since red food dye 40, for example, one of the most common food colorings used in the U.S., is also deemed safe to eat, but if you check the ingredients label on a box of General Mills' Lucky Charms cereal you'll still find it listed.
The Maui measure, though, may give a glimpse into how we see GMO opponents proceed in the future.
The ballot initiative marked the first time anyone in the U.S. had a chance to vote on GMO crops themselves and it squeaked by with a 1,077-vote win. By imposing a moratorium on crop cultivation and pesticide use until industry-funded and county-administered safety studies are conducted and reviewed, it brings to a screeching halt the farming Monsanto and Dow AgroSciences are performing on the island.
Monsanto owns or leases 3,100 acres on Maui and Molokai while Dow has about 400 acres on Molokai, which is part of Maui county and which counts seed corn production as its biggest industry.
Hawaii remains a particularly contentious state for GMOs. Earlier this year the island of Kaua'i passed similar legislation, only to have a judge declare it invalid and effectively blocked the county from enforcing the ordinance regulating GMO farming practices and pesticide usage. Dow, BASF, DuPont (NYSE:DD), and Syngenta (NYSE:SYT) all extensively use pesticides on their acreage there.
If the Hawaiian ordinances imposing a moratorium are ultimately approved -- and Monsanto has promised to challenge the Maui effort in court -- GMO opponents would be emboldened to go after states elsewhere in the country where GMO crops are grown. They'd likely view a ban on their production a more favorable outcome than simply labeling their presence.
That seems extreme. Individuals who believe in the benefits GMOs offer ought to be able to eat them, just as those who'd prefer not to ingest lab-altered genetic material should be able to know whether the foods they buy are GMO.
In the end, it's not labeling laws that Monsanto or food producers like General Mills need to fear, but rather bumper crops like those corn farmers experienced this year that have driven down prices to their lowest level in five years and caused the biotech to forecast disappointing earnings for the coming year. Until the labeling matter is settled nationally, they will continue to fight these rearguard battles on a state by state basis.
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