USDA Evaluates the Impact of Food Labels

A new report from the USDA’s Economic Research Service, Beyond Nutrition and Organic Labels—30 Years of Experience With Intervening in Food Labels, evaluates the impact of federal organic and nutrition labels, as well as several other other food labels that have emerged in recent decades.

Case studies of five food labels for which the federal government has played different roles were examined to show the economic effects and tradeoffs involved in setting product standards, verifying claims and enforcing truthfulness. 

According to the report, "Where there is no single, national standard for a food attribute, and food suppliers develop product definitions and standards, label information may not be consistent and may mislead consumers. These labels may not be truthful or understandable." 

The report looked at comparisons of five food labels: nutrition labeling, USDA Organic seal, raised without antibiotics, nongenetically engineered, and country-of-origin label for beef and pork. They discovered that many consumers find the information too complex to use, and that consumers may be confused. 

"Mandatory labels may include negative aspects of foods, but voluntary labels will not," the report says. "Thus, voluntary labels rely on consumers to infer negative characteristics from the absence of a label claim on some products (when it is present on other similar products)." For this reason, they say, left to their own devices, food suppliers will offer only positive—and positively perceived—information. 

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Without government involvement, the same label can be based on different standards—and private labels are often not verified.   

The report concludes with a discussion about technology solutions, but notes the potential drawbacks as well: "Although apps can include much more information than food labels can, apps (just like labels) must come from sources consumers trust. Apps are largely un-certified and un-policed, which means they are of dubious quality." 

If we are to gain consumer trust, now, more than ever, transparency is a must-have.