Gestation Crates and Unfunded Mandates

The New York Times had a nice piece on the challenges faced by hog farmers converting from gestation crate systems to open pen systems.  For background, the Human Society of the United States (HSUS) has won successful ballot initiatives in states such as California, Florida, and elsewhere banning gestation crates, and in recent months several large restaurant chains have said they will (at some future date) no longer source pork from farms that use gestation crates.

I strongly disagree with the farmer in the piece who says,

What I don’t like is some big restaurant chain in Chicago that knows nothing about raising animals is telling us how to raise pigs.

It is the consumer, after all, who wins the day.  Nobody who makes a living selling what they produce to others has the final say so (at least as long as they want to stay in business).

Despite that quibble, the article does a nice job characterizing the trade-offs entailed in phasing out gestation crates and documenting the reasons why farmers adopted these systems in the first place (something we also tried to do in our book on the subject).

The end of the piece has a quote from my friend and collaborator, Glynn Tonsor at Kansas State University, who gets at the crux of the problem faced by many pork and egg producers.  The issue is that when consumers show up in the voting booth, they enthusiastically vote to ban practices such as gestation crates in pork production and battery cages in egg production.  Yet, when those same people visit the grocery store, they aren't willing to pay the extra amount for meat and eggs produced in alternative systems.  

In essence, we have consumers requiring farmers to adopt practices, which the consumers (according to their own behavior) aren't fully willing to pay for.  Farmers, then, face something very much like an unfunded mandate (a phrase I believe I heard Glynn first use in this context).  Unfunded mandates normally come about when the government requires the adoption of a costly practice or service without providing the funding to accomplish the outcome.  In a similar manner, consumers and restaurant chains are requiring farmers to adopt practices without being willing to pay for what they say they want.

The ultimate result will be lower profits for hog farmers (well, at least US hog farmers).  It should be noted that hog farmers are already predicted to suffer record losses over the next year because of rising feed costs.  

While we may have to live with a less profitable hog sector, I at least implore voters to count the costs in the voting booth in the same way they do in the grocery store.  Some hog farmers, who have transitioned away from gestation crates, have found niche markets of consumers who are willing to pay the higher prices.  Here's hoping the niche grows mainstream so that funding will follow the mandate.