Identity Preservation and False Labeling in the Food Supply Chain
Alexander E. Saak
February 2002 [02-WP 295]
Saak, A.E. 2002. "Identity Preservation and False Labeling in the Food Supply Chain." Working paper 02-WP 295. Center for Agricultural and Rural Development, Iowa State University.
In this paper I address two issues pertaining to the market differentiation between non-genetically modified (non-GM) and genetically modified (GM) food varieties. First, I provide a cost-efficiency explanation of the discrepancy between the observed shares of identity preserved non-GM variety and the total supply of the variety. Second, I show that when products can be falsely labeled as non-GM, the share of false labeling depends on the level of identity preservation. In this context, I demonstrate that the share of falsely labeled supply can increase in response to harsher fines.