In Perspective: Who influences GMO approvals?

Date:05-30-2012

An article from the Harvard Business School proposes a theory about what factors influence how genetically modified crops are approved by the U.S. Department of Agriculture.

The question is raised because many who are critical of the USDA’s GMO approval process have claimed for years that GM crops are approved because industry executives achieve power within government agencies that have the ability to make approval decisions.

The article, “Who Sways the USDA on GMO Approvals?” follows the investigation of Shon Hiatt, an assistant professor at Harvard Business School. Hiatt says, “Many corporations have gotten good at pulling the levers of government to tilt the odds in their favor, weakening regulations or securing perks, justified or not, to further their business interests. Economists use the term ‘regulatory capture’ to describe the phenomenon whereby regulatory agencies serving the public instead end up advancing the interests of the companies they regulate. The main way companies accomplish it, these economists theorize is through lobbying and campaign contributions that convince legislators to pass laws in their favor.”

However, Hiatt claims that traditional theories of regulatory capture don’t neatly apply to regulatory agencies, such as USDA and the Food and Drug Administration. In his investigation, he claims that lobbying and campaign contributions had little effect on whether a GMO crop was approved.

Instead, he found that third-party groups separate from Congress and industry had the most influence. His theory stems from the logic that these agencies do not exist to protect and serve the public, but to protect their own legitimacy. He says, “After all, it’s the perception of an agency’s effectiveness by Congress and the White House that will determine its budget and the career trajectory of its top officials.”

Hiatt found that USDA often looks to outside stakeholders to establish its legitimacy. These stakeholders include farmer associations because they have the ability to judge if the GM crops are performing as agribusiness companies claim.

"In cases where they supported a particular organism, there was an 84 percent increase in the likelihood of approval,” he wrote in his paper “Lords of the Harvest: Third-Party Signaling and Regulatory Approval of Genetically Modified Organisms.”

In addition, a positive endorsement from FDA also influenced USDA’s approval process.

If Hiatt’s theory is correct, is this the best way for approving biotech crops? The challenge with this approach is that USDA could rely too heavily on these groups and not enough on scientific procedures. This is not to say that scientific methods are not used. On the contrary, the U.S. land-grant system does a good job of testing these crops.

USDA’s reliance on third-party stakeholders, however, could bring greater scrutiny to the biotech crop approval process in the U.S., which has had the most scientific review process in the world for approving biotech crops. Several activists already claim the statutes that the U.S. uses to approve biotech crops are faulty and don’t adequately apply to these crops.

One of these activist groups is the Center for Food Safety, which claims the regulations used today to register biotech crops are weak. Yet the likelihood that laws and regulations will be rewritten is unlikely. Hopefully, the biotech crop approval process will relay on solid scientific evidence gathered by university researchers and industry organizations who have the real-world experience of testing these crops. Biotech crop approval in the U.S. needs to remain strong.