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The Costly Consequences of I-522

September 26, 2013
Washington Research Council Reveals the Whole Story Behind Washington State’s Initiative 522, and Yes it Will Cost You a Dime

Many Washington state residents know that on November 5, 2013, they will have to vote on whether or not to pass state Initiative 522, which will require special labels on certain foods made with genetically engineered (GE) ingredients.  What many residents don’t know is that a “yes” vote can lead to many costly consequences for families, state residents and farmers.

Proponents of the bill have made several arguments in favor of passage, including that consumers have the right-to-know what is in their food and that the initiative will not accrue extra costs for the average taxpayer.  Arguments that the Washington Research Council recently invalidated in its September 2013 Report titled Initiative 522: Costly, Flawed and Ill-Conceived.  The study closely examined the proposed legislation and presented several key truths regarding the initiative:
“While I-522 supporters say the measure simply provides consumers with necessary information, there are so many exemptions in the initiative’s regulations that it would not provide consumers with meaningful or complete information about the presence or absence of GE content. Given all of the exemptions, we estimate that only about one-third of the food Washington consumers regularly purchase would be subject to the labeling provisions in I-522—even though the remaining two-thirds of foods may contain GE ingredients.

“We estimate that the initial start-up costs to comply with I-522’s Washington-only regulations for farmers and food manufacturers would be $264 million. (For reference, we estimate that retail expenditures on groceries in Washington in 2012 were $16.4 billion.)

“We estimate that, for the 2015–19 period, the increase in food costs that I-522 would impose for a household of four would be between $200 and $520 per year. For 2019 and onward, the increase in food costs for such a family would be more than $450 per year. The increase in food prices caused by the initiative would disproportionately affect households with lower incomes.”

This is just a sample of the findings that Washington Research Council reported. In addition, the study outlined the law’s potential impact on international standards, federal policy and consumer choice.  As for the validity of the report, reporter Erik Smith, of the Washington State Wire, had this to say:
“Certainly it won’t cost a dime, allows the Research Council’s Kriss Sjoblom – tens and hundreds of millions is more like it. The Research Council, a Washington-based business-oriented think tank, was commissioned by the no-on-522 campaign to produce a report summarizing all known cost impacts of the measure. At the same time the campaign commissioned an economic analysis by Northbridge Environmental Management Consultants, the same firm that estimated costs of the California initiative. Together the reports offer a rather convincing argument that the cost will be decidedly north of zero.

For one thing, the state says so. The Office of Financial Management, charged with estimating the impact of ballot measures on state agencies, concluded last month that the cost to taxpayers would be at least $3.4 million over six years. That is the cost of rulemaking by the state Department of Health, inspection and compliance, education and technical assistance, and for contracting with a private laboratory for product sampling and testing. The fiscal note says the cost of enforcement is “indeterminate” – meaning the $3.4 million might just be the start.

Of course it would be higher than that, Sjoblom says. ‘The OFM estimate of regulatory costs is really low,’ he says. “It really contemplates a minimal regulatory apparatus. If you just take a look at the existing regulatory system we have for organic foods, and you blow that program up proportionally to the greater amount of sales that are subject to this requirement, you get a substantially higher regulatory cost.” The state organics program costs $2.5 million. Do the extrapolation and you get an annual budget of $22 million.”

Erik Smith’s article, “As Genetic-Food Labeling Campaign Heats Up, Opponents Unleash Argument That Carried Day in California – Backers Claim Zero Cost,” continues to lay out a noteworthy presentation on how advocates for I-522 have a weak case in convincing Washington state citizens to vote for the bill.

BIO urges Washington state residents to read the Washington Research Council’s report, so that they have all the facts before they hit the voting polls on November 5th.  To learn more about I-522 and how it will affect you, visit NO on 522 Coalition.