A Sweet Deal for Genetically Engineered Sugar Products Sold in Stores

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Two AAEA Members find the effects of the GE labeling law in an AJAE article

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Vermont Act 120 generated an average premium for cane sugar of approximately 1% and a discount for beet sugar of around 13% nation-wide

In the 2014 FDA Health and Diet Survey, 77% of U.S. adults reported to always or most of the time use the Nutrition Facts label when purchasing food from the store. The Vermont Act 120, which took effect on July 1, 2016 stated that Genetically Engineered (GE) ingredients needed to be labeled on food packaging. Did the new law have any effect in sales?

AAEA Members Aleks Schaefer from Royal Veterinary College, University of London and Colin Carter from the University of California, Davis, use the U.S. refined sugar market as a case study to test the theory in the American Journal of Agricultural Economics (AJAE) article “Impacts of Mandatory GE Food Labeling: A Quasi-Natural Experiment.”

Schaefer says “The refined sugar market is pretty unique in that almost all beet sugar is produced from GE seed, whereas cane sugar is non-GE. At the same time, refined beet sugar and refined cane sugar are indistinguishable from one another. Vermont Act 120 caused a breakdown in the relationship between beet and cane sugar prices. Relative to what prices would have been in the absence of legislation---Vermont Act 120 generated an average premium for cane sugar of approximately 1% and a discount for beet sugar of around 13% nation-wide.”

He continues “In the 12-month period following the July 2016 legislation, mandatory GE labeling requirements generated a $40 million windfall for U.S. cane refiners and cost U.S. beet processors approximately $400 million.”

If you are interested in setting up an interview with Schaefer, please contact Allison Scheetz in the AAEA Business Office.

ABOUT AAEA: Established in 1910, the Agricultural & Applied Economics Association (AAEA) is the leading professional association for agricultural and applied economists, with 2,500 members in more than 60 countries. Members of the AAEA work in academic or government institutions as well as in industry and not-for-profit organizations, and engage in a variety of research, teaching, and outreach activities in the areas of agriculture, the environment, food, health, and international development. The AAEA publishes two journals, the American Journal of Agricultural Economics and Applied Economic Perspectives & Policy, as well as the online magazine Choices. To learn more, visit http://www.aaea.org.

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Allison Scheetz
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