Academic journal article Journal of Agricultural and Applied Economics

Analysis of Consumer Preferences for Biotech Labeling Formats

Academic journal article Journal of Agricultural and Applied Economics

Analysis of Consumer Preferences for Biotech Labeling Formats

Article excerpt

Conjoint analysis is used to measure the preferences of United States consumers for labeling of biotech foods. The study found that consumers in the sample support mandatory labeling of biotech foods. This suggests that U.S. consumers would support revisions to the present voluntary labeling policy of the U.S. Food and Drug Administration and the U.S. Department of Agriculture. Results also showed that the preferred labeling format is a text disclosure that describes the benefits of biotechnology in combination with a biotech logo.

Key Words: Agricultural Biotechnology, Labeling, Conjoint Analysis

JEL Classifications: Q 18,Q13

Agricultural biotechnology (AB) is broadly defined as a collection of scientific techniques that involves taking the genes from one plant or animal species and inserting them into another species to transfer a desired trait or characteristic.1 For farmers, AB has led to reduced production costs, enhanced yields, and the potential for increased profits. Other potential benefits include reductions in pesticide and herbicide use, as well as the potential for enhanced nutritional value, flavor, and shelf life of some foods.

Despite the benefits of biotechnology, consumer acceptance has been mixed-some interest groups have expressed concerns over safety and harmful environmental effects of biotech foods (U.S. Department of Agriculture, Environmental Resource Service 1991). These concerns are due to the public's perception that biotech foods may have some long-term or unforeseen health risks, as well as unforeseen negative effects on wildlife and the environment. Environmental concerns include the potential for biotech crops to interact with nonbiotech plants, leading to the contamination of organic crops and/or herbicide-resistant weeds. The development of Bt-resistant insects and other unanticipated harmful effects on nontargeted organisms in the ecosystem are also frequently cited drawbacks of biotechnology (U.S. Department of Agriculture, Environmental Resource Service 2000). There are also concerns that biotech foods with transplanted genes may cause allergic reactions in some consumers. Health and environmental concerns are particularly strong among European, Japanese, Australian, and New Zealand consumers and have led to mandatory labeling of all biotech foods in these trading regions.

Food labeling has been an important issue in the United States since the Nutrition Labeling and Education Act (NLEA) of 1990 replaced the voluntary labeling system established by the U.S. Food and Drug Administration (FDA) in 1973. The act requires mandatory nutrition labeling for all packaged foods and strict regulations regarding nutritional content and health claims. However, the FDA and the U.S. Department of Agriculture have adopted voluntary labeling policies for biotech foods, unless they are materially different from their conventional counterparts. Mandatory labeling is necessary if a biotech product is proved to be materially different from the non-biotech counterpart. Material differences include circumstances in which the common or usual name no longer adequately describes the biotech food, where a biotech food or ingredient changes how the food is used or consequences of its use, if a biotech food has significantly different nutritional properties from the conventional food, or if a biotech food includes an allergen that consumers would not expect to be present based on the name of the food. The U.S. policy also provides for a "GMO-Free" label if foods contain no biotech ingredients (Caswell 1998).

Critics of the PDA's voluntary labeling policy argue that all food produced through biotechnology should be labeled, even if the material aspects of the food have not been altered. They argue that consumers have a right to know when biotech ingredients are present in their food. Proponents of the current policy argue that mandatory labeling of all biotech foods would unnecessarily raise health concerns of consumers, increase the costs of marketing food products, and ultimately lead to higher food prices. …

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