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Unformatted text preview: REVIEW OF AGRICULTURE Economic & Political Weekly EPW June 26, 2010 vol xlv nos 26 & 27 167 Labels for GM Foods: What Can They Do? Sangeeta Bansal, Bharat Ramaswami Labelling of genetically modified foods is a contentious issue and internationally there is sharp division on whether such labels ought to be mandatory. This debate has reached India where the government has proposed mandatory labels. Mandatory labelling aims to provide greater information and correspondingly more informed consumer choice. However, even without such laws, markets have incentives to supply labels. So can mandatory labelling achieve outcomes different from the voluntary type? The paper argues that this is not the case in most situations. It goes on to explore the special set of circumstances, where mandatory labels make a difference to outcomes. If these outcomes are intended, mandatory labelling is justified; otherwise not. Although the Indian context provides the motivation, the core arguments given are general and applicable to other country contexts as well. This work has gained from comments and conversations with Guillaume Gruere, S R Rao and participants at a policy dialogue on Economic Consideration of Biosafety and Biotechnology Regulations in India in New Delhi. We alone are, however, responsible for the views in this paper and any errors of fact. We gratefully acknowledge funding support from the South Asia Biosafety Programme of the International Food Policy Research Institute. Sangeeta Bansal ( firstname.lastname@example.org ) is at Jawaharlal Nehru University. Bharat Ramaswami ( email@example.com ) is at the Indian Statistical Institute. P olicies towards labelling of genetically modified (or GM ) foods have varied between countries. The great divide is between the European Union ( EU ) that has favoured man- datory labelling and the United States ( US ), which has chosen not to impose such requirements. Developing countries have also been confronted with this issue. While Brazil and China have adopted mandatory labelling laws, Philippines and South Africa have pursued approaches based on voluntary labelling. In India, a recommendation from the ministry of health proposed manda- tory labelling of all GM foods in 2006 at a time when no GM food crops had been permitted by regulators. Mandatory labelling be- came more topical when Bt brinjal, a GM plant that was approved by regulators, came up for political clearance. Two kinds of justifications are commonly offered in favour of mandatory labelling: first, that it is necessary to warn consumers about potential health impacts and second, that such labelling is a response to a consumer’s right to know and would result in greater consumer choice. We evaluate these arguments in a pol- icy context where governments have other policy instruments as well besides mandatory labelling – namely, the specification of quality standards and laws that facilitate voluntary labelling. We will argue that labelling is not the appropriate response to con-...
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