Wednesday, October 2, 2013
Dueling TV ads now airing about Initiative 522 — the statewide ballot measure to require labeling of some genetically engineered foods — offer conflicting claims about cost impacts the measure would have, if approved.
A TV spot from the pro-labeling Yes on I-522 Committee opens with a woman named Deb in a grocery store, then goes on to include statements from a farmer, a fisherman, a naturopathic doctor and a seafood retailer all separately supporting the measure.
“It’s simple, and it won’t cost you a dime,” says Chris, a bearded Pike Place Market fishmonger, before tossing a salmon across a display case while his fish-throwing compatriots echo in unison, “Not a dime!”
A second ad features only Deb, who is played by an actress, walking the cereal aisle of a grocery store and reiterating the claim that I-522 “won’t cost you a dime.”
To counter the ads, the anti-labeling No on 522 Committee last week issued its own TV spot, which intones: “Have some doubts about claims that 522 won’t cost a dime? You should. It’s false.”
The ad goes on to claim, “Official estimates and a recent study show 522 would cost taxpayers millions for the added bureaucracy needed to enforce its complex regulations.”
Then, against the backdrop of a family doing its grocery shopping, the narrator says, “522 would increase food costs for Washington families by hundreds of dollars per year.” Red block text next to the imagery underscores the claim, contending: “Initiative 522 would cost a family of four over $450 per year.”
What we found:
Both ads are mostly false.
While the pro-labeling side’s “not a dime” claims don’t cite sources, Yes campaign spokeswoman Elizabeth Larter provided several studies and published statements at The Seattle Times’ request.
All of the information provided — including a consultant’s study for a pro-labeling interest group that examined how label changes affect grocery prices; a professor’s cost analysis of how label changes would impact costs under a nearly identical measure in California last year; and a 1997 transcript of a former public-health official’s statements after labeling was mandated in the European Union — indicate changing product labels doesn’t increase food costs.
But various other studies have found food costs can increase, particularly if food products are reformulated to eliminate genetically modified organisms (GMOs) to avoid labeling. Regulatory costs also have been borne elsewhere, in places such as Europe, because of labeling requirements.
In Washington, the state budget office found implementing a 522 labeling compliance program under the health department would cost about $3.4 million over six years.
Larter said the ads’ “not a dime” claims are intended only to mean there will be no extra costs for groceries — not regulatory costs.
“We’re talking about grocery costs,” she said. “And there’s just no concrete evidence that adding labels increases food prices.”
Still, the pro-labeling ads don’t make such a distinction, implying that I-522 would create no cost increases whatsoever.
Asked about the state’s cost estimates to regulate the measure, Larter said her campaign still feels comfortable making the “won’t cost a dime” assertion based on calculations that divide the average annual administrative cost ($561,333) by Washington’s census population counts (6.8 million). The result comes to roughly 8 cents per Washingtonian — still under a dime, she noted.
But not all residents pay taxes, and not all would directly shoulder 522’s regulatory costs. For instance, 23 percent of Washington’s population is under age 18, census figures show. Asked whether the campaign tried limiting calculations to include only taxpaying citizens, Larter said it did not.
The No campaign ad’s assertion that families would see grocery bills climb by several hundred dollars annually also misleads, because it hinges on a questionable assumption: that food producers will opt to reformulate products with costlier organic or non-genetically engineered ingredients rather than use the new labels.
The ad’s claim — based on separate studies conducted by Northbridge Environmental Management Consultants and the Washington Research Council, for which the No camp paid $12,500 apiece — assumes most food producers will change ingredients to avoid the potential stigma that could come with labels. According to Northbridge, most European producers did just that after the EU imposed mandatory labeling.
“That was the experience in other countries, and that’s what our producers say they’ll do,” said Dana Bieber, No on 522 spokeswoman.
But that would be a dramatic shift in the U.S. food industry. Europe’s food industry never depended on genetically modified crops, whereas such products are common in the American industry. While it was relatively easy for the European market to discard genetically engineered ingredients, about 90 percent or more of American-grown corn and soybeans — both key ingredients in vast numbers of processed foods — are genetically engineered, according to the U.S. Department of Agriculture.
University of Massachusetts Amherst Prof. Julie A. Caswell, an expert in food economics, told The Times she disagrees that product reformulation would be the likeliest scenario, should a labeling policy such as I-522 be enacted in the U.S.
“My own expectation would be that much of the market would remain unchanged, and you would see (producers) use the labels,” Caswell said. “I base my expectation on the fact that to do otherwise would be a huge change in the industry, especially on the grain side.”
The anti-labeling TV ad’s other contention — that regulation of 522 “would cost taxpayers millions” — also appears misleading.
For one, the TV spot cites both the state’s fiscal analysis and the No campaign’s commissioned study from the Washington Research Council as sources for the claim. But those studies offer drastically different cost estimates.
To inspect and monitor labeling, the state’s budget office estimates it would cost only $3.4 million over six years and require about 4.8 new employees, while the research council contends it would cost $22.5 million annually and require about 200 new employees.
The state analysis falls more in line with a 2012 fiscal note by California’s nonpartisan Legislative Analyst’s Office, which found regulating a nearly identical measure proposed in that much larger state “could range from a few hundred thousand dollars to over $1 million annually.”
The No campaign argues Washington has grossly underestimated regulatory costs. But even if it hasn’t, Bieber said, the No ad’s claim that 522 “would cost taxpayers millions” is accurate.
“Even under the (state) study, it’s like $1.5 million per biennium,” she said.
That’s true — but only over time. For the first two years, the state estimates costs at $178,000 and $218,000 annually. In year three, it puts costs at $749,000, with estimates of $741,000 annually for years four through six.
During no single year under the official state estimate would regulatory costs exceed $1 million. And that estimate doesn’t factor in any revenue the state also likely would receive from civil fines and other fees that would help reduce overall costs.
The bottom line: The TV ads for both campaigns rely on selective studies to make absolute claims that further their respective arguments, but ignore a glut of other academic and scientific conclusions.
The truth is, no one can say with any certainty how much the costs will be until such a measure is enacted.