Capital Concerns: Biotechnology Labeling: Where It's Going and What You Should Know
In January, the FDA proposed voluntary guidelines for biotech and non-biotech product labeling, unless a biotech product raises health or safety concerns. This U.S. position differs from many other countries that have instituted mandatory labeling of biotech products, even without clear scientific justification.
China, Thailand and other countries have passed laws or issued regulations requiring foods derived from biotechnology to be labeled. The European Union, Japan and South Korea already have such laws. Biotech labeling laws in Australia and New Zealand go into effect in December, 2001. Unfortunately, the rules all differ. For example, specified testing methodologies are different. Rules also vary on the thresholds allowed and on products exempted.
Current EU labeling regulations obligate companies to label all foods containing detectable amounts of biotech DNA or proteins. However, certain ingredients are exempted, such as soy lecithin and corn oil; these products contain no detectable biotech DNA or protein.
New regulations adopted in July require labeling all foods made with ingredients derived from biotechnology, even if there is no detectable level of protein or DNA. To accomplish this, the regulations require that each sector of the food chain test and certify the presence of or lack of biotech ingredients, and then pass the information along to the next link. Each recipient will have to keep records of its suppliers and customers for five years, in case the government must later recall a product. A small, unintentional, adventitious presence of biotech DNA or protein will be allowed in food products without triggering labeling.
Europeans claim that such an ambitious plan of farm-to-table tracking of biotech food and feed is both possible and feasible and will lead to greater consumer acceptance of biotechnology. U.S. industry and government believe otherwise. To date, many EU retailers have requested only non-biotech foods and food ingredients be supplied to meet consumer demand.
The broader category of foods that will need to carry biotech labels means that many current U.S. suppliers may lose their market for non-identity preserved ingredients possibly derived from biotech corn, soy, canola, or cotton. Even identity preserved ingredients may be too costly to export, if the European government and marketplace remain unwilling to pay a premium for the additional costs of segregation.
The Far EastIn June, China passed a law requiring all products derived from biotechnology to receive approvals at every level of development. Companies must maintain records indicating the place of production, genetic source and modification, and the products must be labeled. The final impact on U.S. exports will not be known until the impending rules are released, and that date has not been announced. Given the amount of public investment in biotechnology development in China and the country's need to import certain commodities—like soybeans—to meet domestic demand, it seems unlikely that China will implement rules as restrictive as the new European Union rules.
Both Thailand and Brazil continue to ponder the legal production of biotech crops, and both struggle with farmers using biotech seeds in violation of legal bans. Recently, both countries issued biotech labeling laws, which require companies to label foods if ingredients are more than 3 or 4% (respectively) biotech-derived. These regulations reflect the Japanese biotech labeling rules that fall between the “all or nothing” approach in the EU or U.S.
In the long run, as farmers worldwide adopt GMO crops, supplies of non-GMO soy, cotton, canola and corn—and their by-products—will decline and non-biotech foods may be unable to meet demand. Limited supplies of non-GMO ingredients will eventually cause a spike in world food prices, handicap global food processing, and threaten jobs. More countries should view strict biotech labeling requirements as barriers to their export trade.
Nancy Chapman is president of N. Chapman Associates Inc., a Washington, D.C.-based consulting firm specializing in food, labeling and nutrition policy, communications/marketing strategies and consumer trends.