Creating A More Coordinated Agro-Food System for Non-GM Grains - A Case Study of Japanese Mandatory Labeling System

n August 1999, the Japanese government decided to introduce mandatory labeling for genetically modified (GM) food starting from April 2001. Under the labeling system, certain types of processed food such as oil and sweeteners from corn are exempted from labeling, since scientific verification tests detecting GMO ingredient cannot be applied persuasively. The result of the introduction of labeling system was contrary to the initial expectation of the Japanese government. That is, the shift from conventional grain, which might contain GMO, to Non-GMO has been observed very rapidly among various actors consisting of the US-Japanese agro-food system. Those actors made a major effort to create an identity preserved (IP) handling system to procure Non-GM grains from the US. The establishment of IP handling system, however, has raised various socio-economic issues, such as the distribution of additional costs among actors, further coordination among trading partners, liability issues for certification, and so on. In this paper, we would like to focus on two major crops, soybean and corn, which represent strong relationships between the US-Japanese agro-food system and, try to understand what kind of outcomes are observed from the major shift to Non-GMO and what kind of factors are working behind those outcomes. The shift to Non-GMO forces all actors of the agro-food system to engage in IP handling, and vertical coordination will be much more typical among them as they move to procure Non-GM grains. This means that the US-Japanese agro-food system becomes a more coordinated one than before.