Who Influences the USDA on GMO Approvals?

“Traditional the­o­ries of reg­u­la­tory cap­ture can­not be used the same on agen­cies,” con­tends Shon R. Hiatt, an assis­tant pro­fes­sor at Harvard Business School. “There are a lot of checks and bal­ances and fire­walls in place.”

So how are these agen­cies influenced?

Hiatt, who grew up on a dairy farm in Idaho, began ask­ing that ques­tion through research on the con­tro­ver­sial issue of genet­i­cally mod­i­fied organ­isms (GMOs), agri­cul­tural prod­ucts that are genet­i­cally altered to increase yield, incor­po­rate pes­ti­cide prop­er­ties, or exhibit other ben­e­fi­cial qual­i­ties. (Calgene’s Flavr Savr tomato was the first genet­i­cally mod­i­fied prod­uct to come to mar­ket, in 1992.) However, the organ­isms also poten­tially carry health and envi­ron­men­tal risks. After read­ing about these dan­gers, Hiatt won­dered how the US Department of Agriculture (USDA) decides which GMOs to approve—and how agribusi­ness influ­ences the process.

Traditional the­o­ries break down

As Hiatt began inves­ti­gat­ing, he found that tra­di­tional the­o­ries of cap­ture such as lob­by­ing and cam­paign con­tri­bu­tions had lit­tle effect on whether any par­tic­u­lar GMO was approved. Even more direct means of influ­ence such as sci­en­tific arti­cles funded by indus­try or let­ters writ­ten by industry-friendly con­gress­peo­ple were equally ineffective.

What did seem to affect the approval process, how­ever, was the influ­ence of third-party groups sep­a­rate from Congress and indus­try, to which the depart­ment looked to jus­tify its decisions.

We may think the pri­mary goal of agen­cies such as the USDA is to pro­tect pub­lic health and safety; based on pre­vi­ous eco­nomic the­ory, how­ever, Hiatt started with a dif­fer­ent assumption—the pri­mary goal of an agency is really to pro­tect its own legit­i­macy. 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. Of course, there is an over­lap between the appear­ance of doing a good job and actu­ally doing one. “If the USDA weren’t doing its job, it would have very lit­tle legit­i­macy,” says Hiatt. But that sub­tle dif­fer­ence in per­spec­tive also has the poten­tial to dis­tort the agency’s reliance on pure sci­ence in its approval of GMOs.

In his work­ing paper “Lords of the Harvest: Third-Party Signaling and Regulatory Approval of Genetically Modified Organisms, writ­ten with Sangchan Park, an assis­tant pro­fes­sor at the National University of Singapore, Hiatt iden­ti­fies two types of legit­i­macy impor­tant to the USDA. The first, “con­se­quen­tial” legit­i­macy, is the per­cep­tion that the process pro­duces effec­tive results; the sec­ond, “pro­ce­dural” legit­i­macy, is the per­cep­tion that it is fairly fol­low­ing the rules of the process.

In both cases, the researchers found that the depart­ment looked to out­side stake­hold­ers in order to estab­lish that legitimacy.

In the case of con­se­quen­tial legit­i­macy, Hiatt and Park found a strong influ­ence of farm­ers asso­ci­a­tions, such as the Iowa Soybean Association or the Kansas Corn Growers Association, which have the power to judge whether the GMOs are per­form­ing as intended with­out side effects. While these groups might have some indus­try mem­bers, they are sep­a­rate from the agribusi­ness com­pa­nies that are intro­duc­ing GMOs. In cases where they sup­ported a par­tic­u­lar organ­ism, there was an 84 per­cent increase in the like­li­hood of approval.

“If a com­pany can get enough farm­ers to sup­port the prod­uct and they write let­ters, then the USDA is going to lis­ten to that and say, ‘We have to keep our stake­hold­ers happy,’ ” says Hiatt.

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