Thomas J. Venus

The Interaction Among the Regulation of New Plant Breeding Techniques, GMO Labeling, and Coexistence and Segregation Costs: The Case of Rapeseed in the EU

We analyze the market and welfare effects of regulating crops derived by New Plant Breeding Techniques (NPBTs) as genetically modified (GM) or conventional products. We consider the EU mandatory scheme for labeling GM products and a voluntary non-GM scheme for labeling livestock products derived from non-GM feed. We develop a partial equilbrium model that explicitly takes into account both the coexistence costs at farm-level and the segregation and identity preservation costs at downstream level. By applying the model to EU rapeseed, we find that regulating NPBTs as GM (as compared to non-GM) in combination with mandatory and voluntary labeling increases prices and makes consumers overall worse off and producers better off. We also show that higher coexistence costs make the price increasing effect even stronger. Voluntary non-GM labeling applied to feed makes consumers in this sector overall worse off but benefits farmers and rapeseed oil consumers overall as long as segregation costs are low. Consumers of biodiesel and industrial products such as lubricants produced from GM rapeseed benefit from high segregation costs. We show that the effects of farm-level coexistence costs largely differ from the effects of downstream market segregation costs.

Lessons from EU Voluntary Labeling Schemes for GM-Free Processed Food Products

In the European Union, a mandatory GMO labeling law for food and feed products that contain more than 0.9 % EU-approved GMOs has been in place since the early 2000s. This law does not include animal products derived from animals that were fed with GM feed. To enable consumers to also choose animal products derived from animals that were fed with non-GM feed only, some EU Member States have chosen to adopt national GM-free schemes. The labeling scheme in the EU results in three potential product categories: products labeled as GM following the mandatory labeling standard; products labeled as GM-free, following voluntary labeling standards; and non-labeled food products. In this chapter, we provide a short overview how the volunary GM-free standard for animal products in the European Union evolved since the introduction of GM foods.