Food libel laws are essentially a set of rules created by governments to help protect farmers and food companies from false accusations or claims that their food is unsafe, unhealthy or harmful.
Imagine you and I are playing in a park and I tell you that the candy in your hand is not good for you and it will make you sick. Even though I have no proper proof, you might start getting scared of eating the candy and refuse to eat it. This is the same thing that can happen in the world of food. When untrue or unproven allegations are made against a particular food item or company, it can damage their reputation and decrease sales - this is where the food libel laws come in.
So, to motivate companies to produce quality food and protect them against false accusations, governments passed laws making it illegal to falsely accuse a food company of producing unsafe or unhealthy products. This is often known as "food disparagement" or "veggie libel" laws.
For example, if a meat processing company was producing and selling beef, but someone falsely claimed that the company's beef is made of horse meat or is infected with mad cow disease, the company can sue the person who made such claims in court for compensation, as these claims can harm the company's reputation and profits. But, if there was evidence to support the claim of the beef being adulterated, it would be considered a genuine critique and not punishable under these laws.
In summary, food libel laws prevent people from making false claims against food producers and farmers to maintain a fair environment for all stakeholders.