Examining Proposition 37 and the Impact of a California Regulation on the Banking Industry

Proposition 37 from the standpoint of its impact on California businesses. Is it pro-business or anti-business? What specific advantages does it have? what, if any important benefits does it provide for California? Do they outweigh the costs or inconveniences that they may create?

California is the largest food producer in the United State, and therefore the world. The farmers in the central valley grow mostly vegetable crops, but there is a fair amount grain grown also. Because California farmers grow in an area which is arid and has a propensity for attracting a large number of pests, they have used foods that are sometimes genetically altered to ensure a crop that will produce a fair yield. These genetically altered crops may have adverse health effects which are not apparent in advertising by manufacturers.

The proposition, as it is written, would seem to be anti-business because it takes a significant advantage away from farmers who have used these types of products to enhance their yields. However, there are other ways to look at it. Opponents of proposition 37 point to the fact that the majority of consumers (as many as 65% of the population surveyed (Baertlein & Gillam, 2012)) support the proposition. Whether it is true or not people have been led to believe that many of the foods that have been genetically altered can cause harm to them. This means that people are less likely to purchase products they believe contain genetically modified organisms (GMOs) right now. The labeling will allow people to make intelligent choices, but it could also increase sales of food producers who are willing to use non-GMO techniques to increase yields. The argument from GMO users is that these types of foods have been safely used in the food supply for decades and cause no more harm than non-GMO foods. This may be true also, but the perception is that it is not, so it may be better business for the food producers if they are forced to label their foods.

The primary advantage of labeling is that people will be better informed about the foods they are consuming. The advocates of the proposition offer poor arguments regarding the need to label foods except for that one. There have been no conclusive studies done regarding any harms that GMOs cause, and there is no evidence that genetic modification of foods will alter the foods in any great way (Huff, 2012). Unfortunately, people seem to believe that these GMOs are going to lead to damage and that is the what the advocates of prop. 37 have been pushing. Anytime people are more informed about what they are consuming the better off they are.

The reason that this is being tried first in California is that the state leads the other 49 when it comes to environmental law and safety labeling. It can be, and has been, said that what is good for California is good for the rest of the country. The most important benefit for California is that further establishes the state as a leader in safety among the other 49, and that it provides the citizens of the state a better understanding of what is going into their food.

Of course the primary argument either for or against the measure is going to be the costs. The large food producers say that it will cost them billions to stop using the GMO crops, and that this cost will be passed on to consumers (Baerlein & Gillam, 2012). The advocates of prop. 37 indicate that these types of measures have been used in Europe for more than a decade and they have not cause the food producers any more money than they would have incurred otherwise (Huff, 2012). The fact is that no one knows how much it will cost except for one thing. The manufacturers of GMO crops are not able to make money unless they find farmers willing to plant their seed. Since people are more concerned about this type of product now, it has become less profitable to grow crops that use GMOs. This means that the food producers may actually gain from this type of legislation because it will force them to use different methods to produce greater yields which will bring customers to them. Proposition 37 could actually have the effect of benefitting food producers because people who are against the use of GMOs will be more likely to purchase products that are not using them.

2. Explain the effects of specific California regulations as they impact the banking industry.

The state of California has tried to be forward thinking as far as regulations are concerned in all areas of commerce. This is supposedly a means by which the state legislators can protect the people of the state against corporations and others who wish to make money at the expense of the citizenry. Recently, with the financial crisis of 2008/2009, this has led to regulations concerning the banking industry.