Because voluntary labeling efforts under private certification will be more effective and accountable. This kind of labeling will fail to deliver on its purpose because of corruption in the designation of GMO or not, the ubiquity of the labels, it will load farmers with the responsibility of documenting everything else risk being sued, fail to distinguish GMOs that are mere controlled hybridizations from serious and potentially dangerous modifications, and give the big producers abroad an advantage in the marketplace due to economies of scale in paperwork and their "come and get me" locations.
Prop 37 is the wrong answer to a legitimate problem. I think competing voluntary approaches to providing useful product information is the better way to go.
The problem with your solution is twofold:
1. No compelling force to bring it about (Inertia)
2. No relief for the farmers being deliberately abused by our corrupt courts.