farm animal welfare economics
DESCRIPTION
FARM ANIMAL WELFARE ECONOMICS. L.T. CZISZTER 1 , S. ACATINCĂI 1 , G. STANCIU 1 , E.N. SOSSIDOU 2 , M. PENEVA 3 , D. GAVOJDIAN 1. 1 Faculty of Animal Sciences and Biotechnologies, Timişoara, România, - PowerPoint PPT PresentationTRANSCRIPT
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FARM ANIMAL WELFARE ECONOMICS
L.T. CZISZTERL.T. CZISZTER11, S. ACATINCĂI, S. ACATINCĂI11,, G. STANCIUG. STANCIU11, , E.N. SOSSIDOUE.N. SOSSIDOU22,, M. PENEVAM. PENEVA33, D. GAVOJDIAN, D. GAVOJDIAN11
1Faculty of Animal Sciences and Biotechnologies, Timişoara, România,
2National Agricultural Research Foundation, Veterinary Research Institute, Thessaloniki, Greece,
3University of National and World Economy, Sofia, Bulgaria [email protected]
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Higher welfare standards increase fixed and variable costs• Fixed costs: reduced conversion rates• Variable costs: energy, labour
Costs for the farmers to improve the welfare of their animals• Increased space requirements = modification or
construction of new facilities• Extensive production systems = more land• Higher labour requirements, increased energy
consumption, reduced feeding efficiency = increased operational costs
• Higher standards = increased costs of transportation and processing
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Conflicts between animal welfare and productivity (McInerney, 2004)
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High costs for the farmers but low costs for consumers = consumers’ demand for such products
In some cases switching the technology could be insignificant while in others quite expensive
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Production costs could rise 5 to 30% Laying hens
• £10 per bird in the EU (Blandford et al., 2000)• 12-15% in Italy (higher feed consumption,
more broken eggs, higher variable costs) Pigs
• Stalls, tethers, space = 3-11% (£39-£65 thousand)
• New pig units cost = 18-22% Loss of 6,000 jobs
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Lower morbidity and mortality Reduced expenditure on disease control and
treatments Low-cost technologies could be animal-
friendly Healthier animals = higher production Careful, quiet handling = higher meat quality
(less bruises)• Bruises costs
US beef industry $1.00 per animal on feedlot beef and $3.91 per animal on cows and bulls
US pork industry $0.34 per pig due PSE and $0.08 per pig due bruises
Australia beef industry $36 million annually Calm animals = employee safety
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Low-cost technologies could be animal-friendly• Loose housing for dairy cows vs. tie-stalls• 48 dairy cows
Tie-stalls Cubicles
Construction (CHF/cow/place)
18,500 16,000
Labour (hours/cow/year)
95 80
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Individual benefits• Consumers feel more comfortable when they
know the way its food-producing animals are treated
• 80% of the EU consumers are concerned about animal welfare
• 5% of the EU consumers volunteer animal welfare as concern
• Consumers like to tell by looking at a product how it is made
• Producers that use animal-friendly technologies have an incentive to reveal that to the consumer
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Social benefits• When consumption of goods by one person
affects a lot of other people, government action is required
• Left by their own, consumers will only take care of their own welfare when deciding what to consume
• An animal welfare regulation improves social welfare if: benefits to the consumer of increased animal
welfare > increased costs to the consumer and producer
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Consumers’ willingness to pay (WTP) for animal-friendly
products Consumers’ response
• Cease of consumption UK and Ireland: veal and foie gras
• Become vegetarian Appleby, 1999 – “Buying meat produced with high welfare
standards does more to improve farm animal welfare than eating a vegetarian diet”
• Choose products associated with higher level of animal welfare: labeling
• May not change their food purchasing behaviour, because Their purchase will not have an impact on how food is
produced They mistrust the information provided They do not afford the price
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Consumers’ willingness to pay (WTP) for animal-friendly
products
Western countries• Price is not the only determinant in buying
animal products• Consumers do not seek the cheapest food
but the best value for money
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Impact on animal food prices of animal welfare policy
Welfare changeEffects on production costs (%)
CommodityPrice
change (%)
Introduce BST -8Liquid milk -2.56
Cheese -1.92
Ban hormones +4 Beef -1.44
Limit transport to 8 hrs
+3 All carcasses +1.14
Ban sow tethers and crates
+5Pork +1.9
Bacon & ham +1.3
Ban broiler systems +30 Poultry meat +13.2
Ban battery cages +28 Eggs +17.9
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WTP laying hens USA college students $8 UK £0.43 to eliminate battery cages for
poultry Variants for laying hens
• Convention battery production• Barn production• Free-range production
Market share of free-range eggs in EU• Austria (1996) 40%• Denmark (1996) 25%• Netherlands (1996) 22%• UK (1998) 20%• Germany (1996) 11%• France (1996) 8%• Italy (1997) 3%
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WTP laying hens
Denmark (2005) WTP more• Urban consumers than rural people for
organic eggs• People who perceive the level of animal
welfare as higher in organic eggs: not only for organic but for animal welfare
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WTP yogurt
Italy (2007) WTP more if:• Higher welfare standards indicated on label
higher WTP for yogurt• Information about animal welfare if given to
consumers can be determinant in WTP for animal products
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WTP broiler chicken UK (2005) £7.53 per household/year
• Reduce stocking density from 38 to 30 kg/m2: £3.89/kg;• Reduce percentage of flocks failing foot pad lesion standard
from 15% to 5%: £3.01/kg;• Change quality of ventilation from low to high: £2.68/kg;• Reduce stocking density from 38 to 34 kg/m2: £1.91/kg;• Change ventilation from low to intermediate: £1.67/kg;• Reduce percentage of flocks failing foot pad lesion standard
from 15% to 10%: £1.38/kg;• Change period of darkness from 4 hours to 8 hours:
£0.97/kg;• Change period of darkness from 4 hours to 8 hours with at
least 4 hours continuous: £0.67/kg UK (2005) supermarket standard price £1.78-£2.99
• Free-range chicken price £3.17-£5.99 (6-250% more)
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WTP meat Chile (2007)
• 60% of consumers had some knowledge about livestock management practices
• 50% considered those practices had a negative effects on animals
• 32.1% changed their meat consumption habits• Strong WTP 15.2% higher prices for meat produced
under animal welfare principles• Positive perception for meat produced by pasture-fed
animals, raised in free-range and transported and slaughtered following humane principles
• Large part of population perceives animal welfare as a desirable condition when purchasing beef
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WTP veal and beef
USA (1996) $8 to improve welfare of veal calves
South Chile (2009)• Origin of beef was the most important
attribute• Then, information about animal welfare• Then, price of the product
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WTP in RomaniaPartial results of WELANIMAL questionnaires in
Romania
Farmers Consumers Trainers
Total responses
58 71 9
No 13 (22.4%) 21 (29.6%) 2 (22.2%)
5% 20 (34.5%) 19 (26.8%) 3 (33.3%)
10% 7 (12.1%) 13 (18.3%) 2 (22.2%)
25% 5 (8.6%) 2 (2.8%) 2 (22.2%)
>25% 1 (1.7%) 2 (2.8%) 0
DK 12 (20.7%) 14 (19.7%) 0
Question: What additional price premium would you be willing to pay for animal products sourced from an animal welfare friendly production system?