Using Agricultural Subsidy Reforms To Help Animals

Subsidies are payments from the government to businesses or people. Currently, the most subsidized products globally include eggs and meat from chickens, pigs, sheep, and cows — eggs are among the most subsidized food products globally. Wild-caught fisheries also receive tremendous subsidy support, estimated at $35 billion USD worldwide in 2009. This report looked at five different types of agricultural subsidy reforms and found that two could make a real difference for farmed animals. 

Welfare-conditional subsidies, programs where governments pay farmers to adopt higher animal welfare farming methods, may improve conditions for farmed animals in a cost-effective way. Types of welfare-conditional subsidies include a government paying farmers whose welfare standards are better than the legally required minimum; offering grants for farmers to switch to higher-welfare farming methods; or requiring farmers to meet animal welfare guidelines to receive other subsidies. Animals benefit from welfare-conditional subsidies because they are farmed in ways that cause less suffering, but also because higher-welfare farming can be more expensive, so fewer animals are farmed overall.

Switzerland offers two kinds of subsidies: payments for farmers who allow animals regular outdoor exercise and for farmers who keep animals in higher-welfare housing. Most of Switzerland’s chickens, pigs, and cows benefit from at least one welfare-conditional subsidy. Production of pig meat was 19% lower and chicken meat 27% lower than they would have been without the subsidies, and nationwide consumption of both also decreased. Pigs and cows housed in higher-welfare environments had fewer physical and behavioral health conditions when compared to pigs and cows in conventional, lower-welfare housing.

The E.U. also uses subsidies to incentivize better animal care in farming. It reduces standard payments to farmers if the farmers do not follow existing animal welfare laws. It also provides additional payments to farmers who use higher-welfare practices than the minimum dictated by law. However, because countries don’t have to participate in these programs, some E.U. member countries don’t provide any payments for animal welfare, and others set aside only small budgets. In most E.U. countries, the most effective subsidies are for farmed dairy cows, but farmed chickens, rabbits, and pigs are far more numerous. Farmers complain that the subsidies are too small to make high-welfare farming cost-effective.

The author argues that welfare-conditional subsidies are most likely to be effective when:

• There are more farmed animals in the jurisdiction.
• The subsidy would cover many animals.
• Animals receive welfare improvements from the subsidy that they wouldn’t have otherwise.
• The welfare improvements are significant.
• The subsidy decreases the domestic production of animal products.
• Customers are unlikely to switch to imported animal products. 
• Customers are particularly likely to stop eating chickens and fishes. 

Eliminating or reducing subsidies for meat production is another reform that could improve conditions for animals, but its effectiveness depends more on the circumstances. Lower meat production subsidies cause higher prices and lower profits, which can reduce the number of animals farmed. However, the author argues, the economic effects of eliminating meat production subsidies are complex. For example, the author suggests that farmers could switch to raising smaller animals, such as chickens. More chickens are needed to produce the same amount of meat, and the author argues that chickens live in worse conditions than cows. 

In the 1980s, New Zealand eliminated subsidies for animal production. Over the next forty years, fewer sheep were farmed, but more chickens were farmed — nearly 1.5x the number of sheep saved. New Zealand also had more farmed cows and deer in that period than before the subsidy change. It’s not clear that the subsidy elimination caused more chicken farming: the growth rate of chicken farming didn’t noticeably jump when the subsidies were eliminated. Still, an effect is possible, and it does suggest that carefully considering how farmers’ incentives change when subsidies change is important.

Similar subsidy changes in Mexico in the 1980s and 1990s reduced beef production by 22%, but beef imports increased and overall beef consumption actually increased by 8%. Pig production decreased by 10%, and pig consumption decreased by only 4%. 

The patterns in both countries show that eliminating subsidies for meat production can have unintended effects that increase harm to farmed animals. The author also points out that ending them may drive farmers into poverty. Research at the level of an entire economy would help us understand the intended and unintended consequences.

The author also found that three other types of subsidy reforms do not appear to be impactful in improving the lives of animals. 

• Eliminating feed crop subsidies: In theory, this would reduce the profit from farming animals, thus reducing the number of animals farmed. However, research suggests that in the U.S., this may result in more chickens, pigs, and cows produced for food.
• Promoting subsidies for plant-based foods: Studies has found that incentivizing the growth of fruits, vegetables, and other plant-based alternatives doesn’t actually change consumers’ purchasing decisions.
• Abolishing fisheries subsidies: This would theoretically cause fewer fishes to be caught in the short term, but proposed fishery subsidy reforms often explicitly aim to increase fish populations for the purpose of fishing them in the long term.

In conclusion, if the policy is well-chosen, farming subsidy reform may be a cost-effective way to improve conditions for farmed animals and, ideally, reduce the number of animals being farmed.