The Market for Animal Welfare

That's the title of a magazine article about a talk I gave a couple months ago in Canada.  The talk (and the academic paper I published about it in the journal Agriculture and Human Values) delves into an idea I've been developing for a while that attempts to release some of the steam from the animal welfare debate using a bit of free-market economics.  

The idea, in short, is to create a separate market for animal welfare that is decoupled from the market for eggs, meat, and milk.  Farmers have a product they're supplying (animal welfare) that is only indirectly (and poorly) reflected in the price of food.  Animal advocacy groups have a product they want to buy (higher animal welfare) but there is currently no mechanism for them to achieve this outcome in a market setting.  It is no wonder then, they they often turn to bans, litigation, and protests.  The idea is create an index of animal welfare being produced on the farm and assign "credits" or "units" based on production that can be sold in a newly constructed market.  The idea somewhat analogous to pollution trading markets, and I argue that it could be more effective than bans on production processes (like gestation crates), meat taxes, and other policies that are currently on the table.  

If you want more details, see my paper.  I'll leave you with the conclusion from the  article in Canadian Poultry Magazine:

Coming back to the concept of Animal Well-Being Units, would people be willing to buy animal welfare? Lusk asked. For those who feel strongly about animal welfare but have already changed their diet to reflect their preferences, buying welfare credits is an option that could appease their need to support animal welfare: they can’t not buy eggs anymore if they’re already not buying eggs. Agribusiness, animal welfare groups, you and me, we could all buy AWBUs and producers could participate and make money for doing so.
“The current market price for animal welfare is zero,” says Lusk. “Therefore not many farmers are going to sell it.”
From this economist’s perspective, we’ve just got the price wrong.