CHICAGO — Use of genetically modified crops in the food system will probably increase handling and processing costs and retail food prices to some extent, a Federal Reserve Bank economist said Monday.
In a quarterly letter on the farm economy, Chicago Fed agricultural economist Mike Singer said biotechnology and genetically modified organisms, or GMOs, hold great promise to improve the environment and better human health.
"However, concerns over the safety of these foods and the environmental impact of genetically enhanced crops have risen dramatically in recent months," Singer said.
"Though it seems highly unlikely that the continued development and use of these products will be banned, labeling and perhaps additional regulation may increase costs in the food system and, ultimately, affect retail food prices."
GMO crops, which in recent years caught on widely with U.S. farmers, usually contain genes inserted into seeds to help the plant withstand herbicide applications, diseases or pests. More than a third of U.S. corn and more than half of U.S. soybeans were planted with GMO seeds this year, before a firestorm of consumer protests led many food processors and distributors in Europe and Asia to call for GMO segregation, further testing and labeling.
Disputes over the safety and evaluation of GMO crops contributed to the breakdown of the latest World Trade Organization talks in Seattle earlier this month.
Singer said that by next year's harvest, testing procedures and standards must be developed, "perhaps similar to standards already in existence for levels of foreign matter allowed in various commodities."
Singer said it would be no surprise to see a reduction in plantings of GMO crops next year.