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KSI TIME STOP

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I was recently invited by an organization called Intelligence Squared US to observe a debate on an important subject. The debate organizers put together four debaters in two teams of two who gave the audience the pros and cons of the statement "Long Live Walmart." Each of the debaters was a well-spoken academic who'd spent many hours studying Walmart and even writing books about it.

The pro-Walmart side included John Tierney, contributing Editor to City Journal and Contributing Science Columnist to The New York Times, and Richard Vedder, Professor of Economics Emeritus at Ohio University, Director of the Center for College Affordability and Productivity and author of The Walmart Revolution: How Big Box Stores Benefit Consumers. The opposition team was helmed by Nelson Liechtenstein, Professor of History, University of California Santa Barbara, Senior Faculty Member at the Center for the Study of Work, Labor, and Democracy, and author of The Retail Revolution: How Walmart Created a Brave New World of Business, and Amy Traub, Associate Director of Policy and Research at Demos.
The Points In Favor of Walmart
The audience seemed to be primed to side with Walmart. Unlike a typical American audience, this debate took place in New York City where there are no Walmarts. Only 46% of the audience had visited a Walmart store in the last 12 months. The pro-Walmart debaters pointed out that Walmart's done a lot of good, for example:

Walmart saves a typical American family of four about $2500 a year. That's about what a family of four gets from the government in food stamps. That makes Walmart a major antipoverty force in the United States.

Walmart is the single most important pipeline distributing wealth from rich countries to poor countries. Subsistence farmers earning about $1 a day can take a low- or no-skill job in a factory making products for Walmart and afford electricity and running water for the first time. Walmart not only affects their living standard but their longevity as well.

Since 1990, when Walmart became the world's largest retailer, the global rate of poverty has been cut by two-thirds. That's the sharpest decline in human poverty in all of history, more than one billion people have been lifted out of poverty during that period and Walmart is a major force in that effect.

The Points Opposed to Walmart
Then it was the anti-Walmart debaters turn. Their argument is mostly about how Walmart treats its workers. They say Walmart not only pays low wages but they also:

Focus on part-time workers. That causes the workers to have total wages that entitle them to Medicaid and SNAP (food stamps).

Cause society to subsidize Walmart and that enables Walmart to pay their workers poverty wages.

Cause their suppliers to cut corners. Four years ago, over 1100 people in Bangladesh were killed because of a fire in a substandard building making products for... Walmart.

The Conclusion
In the end, the audience was asked to vote electronically. More live audience members were won over by the arguments in favor of Walmart than those opposed to it. It's hard to argue that anyone forces 100 million consumers a week to go to the store, they do it because, as Walmart advertising has said so many times - they save money.

I think the debate misses the point, or maybe it just comes too late. Although sales have rising almost every year, in the last two years Walmart's profitability has been declining steadily. That bears focusing on - they're selling more stuff but they're making less money. Compared to 2014, they're selling $12 billion more products but they're making $2.5 billion less in profit. Walmart isn't in financial trouble and they have a strong balance sheet. But Walmart cannot afford for the trend to continue. Now is the time for Walmart to figure out new strategies to push back against the strength of online and the weakness in traditional retail. Even if it were true that Walmart was bad, management has to focus on increasing profitability no matter what. The forces pushing back against Walmart's historical strength are relentless and it's not clear that in 10 years from now Walmart can afford to look the way it does today.

I think Walmart's critics are looking backwards not forwards. In the future it is likely that there will be more online sales, more shop online/pick-up instore, more shop instore/ship to home. That will require more low-cost warehouse and shipping personnel. In-store personnel will have to be more skilled to make a sophisticated, knowledgeable sale than is currently required. When that happens, the pressure on low-skill wages will accelerate and the critics of Walmart today will have a larger segment of the population to worry about.

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Is Walmart Good Or Bad For America? The Question May Be Outdated

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Has Walmart added to our economy or is it just exploiting workers? Experts debate the pros and cons. But in light of the decline in earnings at traditional retailers, is the question still relevant? Does Walmart have to fight to survive? Will online retail be worse for workers?

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Since food companies collectively spent over $45 million to stop Prop 37, California's GMO labeling law, it's hard to believe that they - and Walmart in particular - would turn around and push for a federal GMO labeling standard. But a trickle of reports, aspects of which we've now confirmed, suggests just such a turnabout.

Playing a state-by-state game of whack-a-mole with grassroots groups trying to pass laws across the country (as is occurring in Washington state, Vermont, New Mexico, and Connecticut) may simply have become too exhausting and costly for these companies. If so, such an about-face would vindicate GMO opponents' strategy of a direct appeal to consumers. GMO-labeling advocates may have succeeded in beginning to drive a wedge between biotechnology seed companies, like Monsanto and Syngenta, and the food companies that have to sell what's produced with their wares.

That's because GMOs, for all the claims made on their behalf, actually provide very little benefit to consumers - one of the strongest arguments against them. GMO innovations to date have simply allowed farmers to plant vast acreages of commodity crops like corn, soy, and cotton with less labor ( but not, despite industry claims, with fewer chemicals). It's on this basis, perhaps, that food companies felt like the fight wasn't really theirs.

I first learned of this possible labeling sea change through an article by Ronnie Cummins, head of the Organic Consumers Association, who caught wind of news that a group of food companies went into the FDA earlier this month to "lobby for a mandatory federal GMO labeling law."

Cummins went on to speculate the following:

Is it possible that the threat posed by the growing grassroots GMO labeling movement has prompted a number of Fortune 500 corporations to abandon Monsanto and the biotech industry, and rethink the PR and bottom-line costs of clinging to their anti-right-to-know positions? After all, it's not as if these companies are incapable of making GMO-free products. Though many Americans don't know it, Walmart, General Mills, Coca-Cola, Pepsi, Nestle, Unilever, Kellogg's, Starbucks - even McDonald's - are GMO-free in Europe, thanks to strict GMO labeling laws.

I have been able to confirm through sources close to attendees that such a meeting did occur on Jan. 11. It did not take place at the FDA, however, though FDA representatives did reportedly attend. The meeting was "sponsored" by the AGree Foundation, which is a coalition of foundations active in agriculture and co-chaired by former Clinton Agriculture Secretary Dan Glickman and Gary Hirshberg, CEO of Stonyfield Farm Organics.

I was also able to confirm that, as Cummins claimed, a Walmart vice president did announce that the company would no longer take a lead in opposing GMO labeling efforts. Other food company executives agreed, saying that the fight had become too expensive, especially given the prospect of more state-level initiatives. And if Walmart moves to support, or rather to no longer oppose, GMO labels, others will certainly follow. (Walmart did not respond to my requests for comment.)

Of course, supporters of GMOs will likely cluck disapprovingly at the idea that food companies might turn on Monsanto. They are, after all, forever pointing to the potential genetically modified crops have to solve the various problems we face. But to paraphrase Donald Rumsfeld, you plant with the GMOs you have, not the GMOs you might want or wish to have. And the ones we have don't do any of the things proponents argue that we need, such as significantly boost yields, disease resistance, or nutrition.

In fact, existing GMO seeds do little more than enable chemical-based, fossil-fueled monocrops - the kind of farming that is least sustainable and most subject to climate shocks and resource limits. Nor do the products currently in the pipeline hold much promise. The much-heralded drought-tolerant seeds Monsanto released last year aren't particularly drought tolerant. The big new GMO seed from DuPont currently awaiting USDA approval would simply allow farmers to douse it with a super-toxic Agent Orange ingredient.

The best you can say about GMOs' consumer benefit is that by "simplifying" commodity agriculture, they keep commodity prices lower. But food companies will tell you that commodity costs are a small part of the retail price ( most of which is actually marketing costs). So why on Earth should Walmart, Cargill, and General Mills keep spending hundreds of millions fighting Monsanto's battles?

Still, it's unknown whether anything will come of this "secret" meeting or if an industry-supported GMO label would be a weak, sheep-in-wolf's-clothing version. For what it's worth, Cummins did invoke the cautionary example of Japan, which enacted industry-sponsored GMO labeling that he considers chock full of loopholes.

But it may be that food companies realize that GMO labeling is an inevitability. After all, 61 countries already require it, and the World Health Organization's food safety standards group has official, internationally approved guidelines for any country wishing to label GMOs. We're the laggards on this issue, not the pioneers.

If I'm hopeful, it's also because past history suggests the FDA will regulate upon request - if the right folks ask.

For example, in March 2012, the FDA rejected a petition from the Natural Resources Defense Council to ban the use of the endocrine-disrupting chemical bipshenol-A in plastic. The agency stated at the time that it didn't have the scientific data to support a ban (despite calls for a ban from many experts, including leading endocrinologists). This decision wasn't entirely a surprise, however. Two years earlier, the FDA claimed it didn't have the authority to ban bisphenol-A, even if it wanted to. Which it didn't.

But then a funny thing happened. It turned out that the industry group the American Chemistry Council, with support from food companies - all presumably sick of the bad publicity and boycotts related to BPA - had filed its own petition to ban BPA in baby bottles and other children's products. And while the FDA rejected the NRDC petition, in July of 2012 it accepted the industry petition for a partial ban. It was a classic case of "You say, 'jump,' I say, 'how high?'"

Of course, even if the FDA doesn't immediately start a process to label GMOs, it's good news that food companies are ready to opt out of the political battle. With battles over GMO labeling gearing up in states across the country, we'll soon find out if food companies will make good on this threat to biotech interests.

Advocates, meanwhile, can clearly smell Monsanto's fear. Dave Murphy, of Food Democracy Now and one of the main architects of the GMO labeling movement, promised in an email that "come hell or high water, we will have labeling by the end of 2014."

Labeling may come even sooner than that, however. With the prospect of final FDA approval for the first genetically modified fish designed for human consumption, AquaBounty's AquAdvantage salmon, some states are moving quickly. Missouri has introduced a bill that would require labels for any genetically engineered meat or fish. The FDA itself may feel compelled to require a label as the "price" for approving the salmon. And once one kind of GMO food is labeled, how long can it be before others are?

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Are Walmart and Big Food pushing for GMO labeling?

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Since food companies collectively spent over $45 million to stop Prop 37, California's GMO labeling law, it's hard to believe that they - and Walmart in particular - would turn around and push for a federal GMO labeling standard. But a trickle of reports, aspects of which we've now confirmed, suggests just such a turnabout.

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Everything Wal-Mart does is closely watched. Any action taken by the world's largest retailer can cause ripples up and down the supply chain. Its size and influence are well known throughout the industry.

So, what to make of the company's decision to sell genetically modified sweet corn? At a time when consumer groups have successfully raised public awareness of GM foods and are leading a movement to have products made with genetically modified ingredients labeled, Wal-Mart's actions have done more than any march, protest or petition could do to bring the issue to the forefront.

"After closely looking at both sides of the debate and collaborating with a number of respected food safety experts, we see no scientifically validated safety reasons to implement restrictions on this product," the company told the Chicago Tribune, which first reported the story.

The corn Wal-Mart will be selling - the first crops are presently being harvested - comes from Monsanto, the giant agricultural biotech company.

Ever since the spring planting season, critics of GM methods have been calling on Wal-Mart to not carry the corn. Other retailers, including Whole Foods Market and Trader Joe's, stated earlier this year that they wouldn't carry genetically modified corn this season. Food and Water Watch, which advocates for clean water and a safe food supply, went so far as to submit a customer-signed petition to Wal-Mart in an effort to convince it not to carry the modified corn.

The announcement comes as debate over labeling GM products heats up prior to a November vote on California's Proposition 37, which will determine whether labeling of GM products should be required in the state. Opponents and supporters of the initiative have raised millions dollars to back their individual positions. Recent filings with the state of California show that many of the nation's food producers and marketers have donated funds in opposition the ballot question, including PepsiCo, Coca-Cola, Kellogg, ConAgra, and the Grocery Manufacturers Association.

That food manufacturers are leery about GM labeling is no surprise, since an estimated 86% of all corn and 93% of soy crops grown in the U.S. are genetically modified, according to statistics quoted in the Tribune article. A "yes" vote on the ballot initiative would mean spending millions of dollars labeling packages of products for sale in the state, and millions more spent on explaining why GM ingredients were used.

Indeed, the corn Wal-Mart is selling will not be labeled.

Monsanto made a point of saying its GM sweet corn will help farmers who grow it reduce insecticide use by as much as 85%.

Statements like that complicate matters and cloud the debate. Consumers will have to ask themselves which is safer for them and their families: conventional corn or corn that has had its genetics tinkered with to make it more resistant to pests.

With its decision, Wal-Mart believes its shoppers will opt for the latter. The rest of us will have the chance to see just how important the question is long before California's Prop 37 vote rolls around.

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Everything Wal-Mart does is closely watched. Any action taken by the world's largest retailer can cause ripples up and down the supply chain. Its size and influence are well known throughout the industry. So, what to make of the company's decision to sell genetically modified sweet corn?