GM Alfalfa: A case of procyclical regulatory policy?

Washington appears about to do it again–impose a new set of rules on an innovative industry, in a bout of procyclical regulatory policy.  The Department of Agriculture is considering imposing new regulations on genetically engineered crops:

 Last year 93% of cotton and soya acres contained genetically engineered crops, as did 86% of corn acres. In the past the Agriculture Department (USDA) has placed relatively meagre limits on this expansion. This month, however, that may change.

One set of rules under consideration would

approve planting with rules to prevent the contamination of non-GM crops. For example, five miles (8km) would have to separate GM alfalfa from conventional or organic alfalfa fields. The USDA will receive comments on the plan until January 24th. A decision is expected soon after, so that farmers can prepare for spring planting.

To me, this is a clearcut example of what I call  procyclical regulatory policy — adding rules and regulations during periods of economic weakness. Procyclical regulatory policy is a bad idea, in the same macroeconomic sense that procyclical monetary or fiscal policy is a bad idea–adding more rules in a downturn is like kicking an economy when it’s down.

That’s especially true when the new rules are being applied to a growing and innovative industry.  Ultimately biosciences is our best hope for a long-term economic recovery, and that includes agricultural biotechnology.* We should be doing everything we can to stimulate and encourage innovative sectors, not trying to restrict them.

*This theme is developed in my forthcoming paper, “Biosciences and the Long-term Economic Recovery.”



  1. […] contaminate non-genetically-modified crops even if the economy is weak. So there either need to be standards for how to handle that problem or GMO producers will be laden with legal threats and uncertainty […]

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