Lessons from Prop 37 and the future of genetic engineering in agriculture

I was a strong opponent of Proposition of 37 and I am quite satisfied that it did not pass; but its failure serves more than vindication. It has interesting implications for the attitude of California on environmental issues, the future of GMOs, and the future of technology in general.

The truth is that I was surprised at the result. I expected the Proposition to pass. Early polls showed that 80% in favor of the proposition, which then moved to 60%, but to have the result be 58% against it was quite a turnaround. Of course, many people blamed corporate interests and big investments in political campaigning against it for the failure of the proposition.

Obviously without the campaign, nothing would have happened, but the campaign had a message that was convincing to people and made many change their position. As a general rule, money alone does not buy votes. This is actually the main lesson of the last election. Mr. Adelson and other fat cats and Karl Rove threw hundreds of millions of dollars to advance several causes, and they fizzled out. To me the lesson is, if you have the right cause and you market it well, it works. However if the message is unappealing, putting money towards makes advertisement agencies rich.

There were several lines of argument that were for and against the proposition; some were more effective than others. The proponents of the proposition argued on the dangers of GMOs and how bad it is for human health and the environment. But this argument was countered by results from studies by the National Research Council and testimonials by many scientific academies and organizations that said that GMOs were as safe as conventional food. Furthermore, the recent study out of Stanford University that stated that the nutritional value of organic was not higher than conventional food, also contributed to the reduce the effectiveness of scare tactics. The opponents of the proposition tried to tote the value of GM. It increased yields, reduced the price of food, and saved lives in developing countries and for the most part, this argument didn’t work either but it did strengthen awareness that it has value and potential.

The most effective argument in favor of the proposition was the ‘right-to-know’ argument. This was partially countered by the fact that one can have voluntary labeling.

However, the knock-out argument in opposition to the proposition was that labeling would not be cheap for the consumer. Even though I’m sure that most voters did not buy the $400/family increase in food cost estimate, I suspect that for many people, even an increase of $50 would not be worth it.

I also learned that another argument that worked played into the stigma effect. GMO foods are not cigarettes and shouldn’t be treated as such. Furthermore, they may not have made big differences now but at least they have potential and we in California can take advantage of it: so why stigmatize it and kill a goose that may lay golden eggs.

In retrospect, the result of proposition should not have surprised me. About 20 years in 1990, there was a proposition called ‘The Big Green Initiative’, that aimed to ban pesticides in California. Again, it initially was leading in the polls but it fizzled as voters realized that while pesticides need regulation, eliminating them would pose substantial cost. The initial response of people that are asked for their opinion about something that seems to be risky, or unpleasant, is to get rid of it. But when they realize that this may come with a cost, they have second thoughts. People will develop measures to support policies that control risks if they perceive the reduction of the risk is worth the cost. The support for GHG emission control policies in California, AB32, is proof of this: that Californians support environmental policies that are worth supporting.

Obviously there will be many more attempts to label GMOs, restrict their use, and while the adoption of GMOs in crops that it is allowed for has been astonishing and indeed, increasing output of corn by 15-20% and of soybean by even more, still in many crops its introduction has stalled such as wheat and rice.

But slowly, there is realization that GMO has value. Even Proposition 37 did not proposed to label meats produced with GM crops. It is clear that GMO is acceptable for foods that people don’t eat directly and the controversy is limited to edible food. Even then, we have GM papaya and as food prices are continuing to rise, the resistance against GMO softens. Even environmental groups are having second thoughts about blanket resistance to GMO and introducing drought-tolerant varieties and other traits that are perceived to address major social needs, will allow for fast expansion of the technology to other crops that people consume directly.

To me, the bread and butter of GM will be control of plant diseases. Control of plant diseases are not as ‘sexy’ as addressing drought, but the big success of agriculture is in reducing pest damage via various improved varieties, chemical pesticides, IPM, and agricultural practices. Biotechnology provides improved arsenal to understand what we are doing, and to find precisely find mechanisms to address pest or other problems with minimal side effects. The more we know about genomes, and the more experience we have with biotechnology, the more effective they are. As in electronics, the more we understand the inner workings of the atom, the better we are able to utilize for the betterment of humankind.

As we grow more concerned about climatic change and the likely intensification in pest pressures, both by migration and increased vulnerability of plants and trees to pests, the value of effective response capability to such threats is increasing. Trees are especially vulnerable to ecological changes. There is a saying, ‘pests can move, but trees stay put’ and this applies to crops such as walnuts. Developing the capacity to address soil diseases by modifying the roots without affecting the fruits, would be easy to sell especially in the future as people slowly become more reasonable about GMO.

Our challenge as economists is to quantify the benefit and the cost and to assess the expected rate of return. We developed methods that can quantify pest damage and its implications under various conditions , and there is a rich literature on assessing the rate of return of research that can use this information, which may provide good foundations to assess investments towards this effort . Thus I believe that considering this new line of research is both timely and prudent and the result of proposition 37 suggests that the technology would not encounter as much resistance as we may previously thought.

1- Waterfield, G. M., & Zilberman, D. (2012). Pest Management in Food Systems: An Economic Perspective. Annual Review of Environment and Resources, 37(1).
2- Zilberman, D., Schmitz, A., Casterline, G., Lichtenberg, E., & Siebert, J. B. (1991). The economics of pesticide use and regulation. Science (New York, NY), 253(5019), 518.

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