The Free Market is Solving the GMO Problem

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When Justin Dammann enters his south­west­ern Iowa corn­field this month, the 35-year-old farmer will sow some­thing these 2,400 acres have not seen in more than a decade — plants grown with­out genet­i­cal­ly mod­i­fied seeds.

The corn, which will head to a proces­sor 20 miles down the road this fall, will like­ly make its way into tor­tilla shells, corn chips and oth­er con­sum­able prod­ucts made by com­pa­nies tak­ing advan­tage of grow­ing con­sumer demand for food with­out biotech ingre­di­ents.

For Dammann and oth­er Mid­west farm­ers, the bur­geon­ing inter­est in non-GMO foods has increased how much they get paid to grow crops in fields once pop­u­lat­ed exclu­sive­ly with genet­i­cal­ly mod­i­fied corns and soy­beans. The rev­enue hike is a wel­come ben­e­fit at a time when low­er com­mod­i­ty prices are push­ing farm income down to what’s expect­ed to be the low­est lev­el in six years.

We nev­er real­ly thought we would go back to (non-GMO). But the con­sumer, in my opin­ion, has sent a clear mes­sage that a cer­tain per­cent­age of our cus­tomers are will­ing to pay more for the non-GMO lines,” Dammann said. “This non-GMO thing has seemed to take hold and gain a lot of trac­tion.” – Des Moines Reg­is­ter, April 18, 2015

This sto­ry is a mar­velous exam­ple of con­sumer pref­er­ences encour­ag­ing pro­duc­ers to change their behav­ior, with­out any gov­ern­ment inter­ven­tion. Mar­kets work – when we let them.

Mon­san­to and the oth­er genet­i­cal­ly mod­i­fied seed com­pa­nies insist their prod­ucts are safe. A sub­stan­tial num­ber of con­sumers have their doubts. The num­ber is large enough to have enticed GMO-free food com­pa­nies to step up their offer­ings. Alter­na­tives are often more expen­sive than the GMO ver­sions, but they’re avail­able.

Con­sumers in some states have tried to force label­ing require­ments on GMO prod­ucts. As we wrote a few weeks ago, the effort is fac­ing fierce indus­try and polit­i­cal resis­tance. If the trends in this arti­cle con­tin­ue, it won’t mat­ter. Con­sumers will even­tu­al­ly get what they want.

Manda­to­ry label­ing would have been a blunt instru­ment. If it had solved the prob­lem, there would still have been oth­er harm­ful side effects. This is how gov­ern­ment inter­ven­tions usu­al­ly work, how­ev­er well-inten­tioned they are.

The mar­ket may move slow­ly but it is far more pre­cise. Look what is hap­pen­ing. A sig­nif­i­cant num­ber of con­sumers want foods made from GMO-free grains. Food com­pa­nies pro­vid­ed them.

The arti­cle men­tions some exam­ples. Gen­er­al Mills will no longer use GMO corn­starch in Chee­rios. Chipo­tle Mex­i­can Grill wants to elim­i­nate GMOs from all its ingre­di­ents. Whole Foods will require GMO label­ing by 2018.

All this is hap­pen­ing with­out any state inter­ven­tion. The busi­ness­es are respond­ing to their cus­tomers.

With demand grow­ing but the sup­ply of non-GMO grains rel­a­tive­ly tight, prices for those grains have gone up. The high­er prices enticed farm­ers like the one quot­ed in the Des Moines Reg­is­ter. His con­clud­ing com­ment ought to send a chill up Mon­san­to spines.

Hope­ful­ly we deliv­er the right prod­uct and peo­ple are pas­sion­ate to buy (GMO free) — because that is the direc­tion we are mov­ing,” he said.

Odd­ly, the GMO indus­try does not seem to be get­ting the market’s mes­sage, still spend­ing enor­mous amounts of mon­ey on cam­paigns to con­vince the pub­lic GMO crops are safe.

They are miss­ing the point. In mar­ket­ing, per­cep­tion is far more impor­tant than truth. Whether the bio­engi­neered prod­ucts are safe is irrel­e­vant. Con­sumers rule. If they decide they don’t want your seeds in their Chee­rios, it does not mat­ter if sci­ence is on your side.

Time will tell how the bat­tle turns out. Maybe GMO and non-GMO prod­ucts can coex­ist peace­ful­ly and each serve their own con­sumers. The com­pa­nies and con­sumers will find out quick­ly — if they let the mar­ket show them.