Animal welfare and farm economics: an analysis of costs and benefits.

Abstract

Abstract Livestock farming uses resources such as land, labour, capital and animals to produce goods and services with a use value to people. Simultaneously, it also produces goods and services that have non-use values to humans. Profit maximization is a fundamental goal in farm-level economic analysis of animal welfare. For a farmer to have an incentive to adopt an animal-friendly farming practice, it is essential that additional costs and loss of revenues, if any, are smaller than possible savings in the costs plus additional revenues obtained through animal welfare improvement. This chapter reviews the principal relationships between animal welfare and costs, benefits and profit associated with farming. It also discusses the implications that animal welfare improvements can have for farm productivity, efficiency and profits, and the externalities that welfare improvements can lead to. Different cases leading to animal welfare improvements are examined. These include: (i) the case where animal welfare improvements are motivated by changes in farm productivity, for instance due to reduced disease incidence; and (ii) the event that an animal welfare improvement is motivated by additional price premiums obtainable from the market.