Economic Considerations of Animal Welfare Policy

Animal welfare considerations are becoming increasingly important for producers of animal-derived agricultural products. Recent media attention on issues of housing conditions for intensively reared livestock and induced calving in dairy production make it clear that some members of the public feel strongly about the overall welfare of farm animals. In many cases, practices that are now perceived as welfare unfriendly are also associated with lower per-unit costs of production, creating a ‘classic’ economic trade-off between production and welfare objectives. In this paper a relatively simple partial equilibrium model is used to illustrate that the distributional impacts of animal welfare regulations (for both humans and animals) depend critically on whether the domestic market is open to international competition. A preliminary case study involving housing options for sows in New Zealand provides an empirical illustration of the possible magnitude of the costs of welfare enhancing policies in a small open economy when the country is a net importer. The fact that welfare enhancing policy is driven by consumers who do not share the resulting economic burden raises important philosophical questions about how society defines what is acceptable on welfare grounds, and whether there is any economic justification for mitigating the costs when they accrue only to one sector of the economy.Animal welfare, partial equilibrium analysis, externality, economic surplus, Agribusiness, Farm Management, Livestock Production/Industries,

The Distributional Implications for Higher Farm Animal Welfare in New Zealand

Over the past few decades the relative price of eggs has fallen dramatically in New Zealand. This has been made possible, at least in part, by the application of increasingly intensive agricultural practices. However, there is also growing pressure from consumers and animal rights groups around the world to ban the use of conventional/barren cages for egg production on animal welfare grounds. In this paper a simple partial equilibrium model is used to provide a preliminary estimate of the welfare effects of moving to alternative housing systems for egg laying hens in New Zealand. Results indicate that in a market where demand is relatively inelastic and trade is restricted for sanitary reasons, the cost of improving hen welfare will be born largely by consumers. This raises difficult distributional issues, as market research indicates that nearly 80% of the eggs currently sold in New Zealand supermarkets are cage eggs, and the heaviest purchasers of eggs are those with large families and limited budgets.Farm Management, Livestock Production/Industries,

A Preliminary Analysis of the Benefits of Introducing Apomixis into Rice

The objective of this research is to undertake an ex ante economic analysis of basic scientific research that aims to identify the gene(s) that control apomictic reproduction, with the ultimate aim of transferring the characteristic into commercially important crops. This paper reports very preliminary results, using the introduction of apomixis into rice as a case study. Apomixis is a natural, asexual method of plant reproduction resulting in offspring that are genetically identical to the mother plant. Apomixis promises to revolutionize plant breeding by providing a system for crop improvement that allows any desired variety, including hybrids, to breed true. This ability will make both breeding and seed production more efficient. It offers the opportunity for plant breeders to more readily develop varieties that are specifically adapted to local conditions, using, and thus conserving, greater genetic diversity. Apomixis will also allow resource-poor farmers to replant the seed they produce from locally bred varieties year after year, a strategy not possible with today's commercial hybrid varieties. Global changes in aggregate welfare, resource allocation, production and price levels are calculated using the global economy-wide computable general equilibrium model known as GTAP. Preliminary modeling results suggest that the overall welfare gains associated apomictic rice could be substantial.Agribusiness, Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, Farm Management, Institutional and Behavioral Economics, Land Economics/Use, Production Economics, Research Methods/ Statistical Methods,

A Multi-Criteria Decision Framework for Animal Welfare Policy

Policy decisions aimed at improving farm animal welfare involve balancing several competing objectives. Not only do such decisions involve tradeoffs between social, ethical, economic and welfare considerations, animal welfare itself is a multi-dimensional concept and some husbandry practices may satisfy some welfare needs but fail to satisfy others. Multi-criteria decision analysis is a decision theoretic tool that has been used to inform decision making in fields such as environmental policy, urban and regional planning, and biosecurity – all of which are characterised by competing goals and multiple stake-holders. This paper presents a preliminary multi-criteria framework for the analysis of animal welfare policies at the national level using indoor housing options for layer hens as an empirical example. Preliminary results are presented, but major emphasis is placed on highlighting the information needed to make such a framework both transparent and tractable.Animal welfare, multi-criteria decision analysis, decision analysis, decision support, Agribusiness, Farm Management, Livestock Production/Industries,

A Hedonic Price Analysis for the New Zealand Wine Industry: Preliminary Results

This paper presents preliminary results from a hedonic price analysis of premium wines in New Zealand over the vintages 1994 – 2003. Implicit prices are presented for a sensory quality rating, as well as wine variety and regional reputation. Results show that the price premium associated with Michael Cooper's five-star quality rating is highly significant and increasing in magnitude over the study period. Trends in regional and varietal preferences are also explored.Hedonic pricing, New Zealand wine, quality, Agribusiness, Agricultural and Food Policy, Environmental Economics and Policy, Food Consumption/Nutrition/Food Safety, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy,

Valuing agricultural externalities in Canterbury rivers and streams

Water quality and quantity concerns in Canterbury are intrinsically related to agriculture. Monetary values for impacts on streams and rivers is lacking in policy debate. This paper employs choice modelling to estimate values of three impacts on rivers and streams in Canterbury associated with agriculture: health risks of E coli from animal waste, ecological effects of excess nutrients, and low-flow impacts of irrigation. This study provides a valuation of outcomes for public policy implemented in Canterbury such as The Dairy and Clean Streams Accord, Living Streams, and The Restorative Programme for Lowland Streams.non-market-valuation, choice experiment, agricultural externalities, New Zealand, Agricultural and Food Policy, Environmental Economics and Policy, Food Consumption/Nutrition/Food Safety, Health Economics and Policy,

Process versus product: which determines consumer demand for genetically modified apples?

One debate in the literature regarding consumers’ reactions to genetically modified food (GMF) centres on whether consumers react to the process of gene technology or to the specific GMF products. Results from a choice experiment survey in New Zealand indicate that consumers are heterogeneous with regard to GMF and that some modifications are viewed more positively than others. These findings suggest that for some consumers the process of gene technology is the decisive factor in evaluatingGMF, while for others the different potential GMF products are valued according to their enhanced attributes.choice modelling, consumer surveys, food, genetic modification, preferences, Consumer/Household Economics, Demand and Price Analysis,

Public policy and private incentives for livestock disease control

This article presents a dynamic bioeconomic model of livestock disease control that is unique in its integration of disease dynamics, inter‐species interaction, control‐induced migration, and individual optimising behaviour. Examination of the first‐order conditions highlights why profit‐maximising producers cannot be expected to eradicate disease. Results from an empirical application of the model confirm that the current mix of policies to control bovine tuberculosis in New Zealand is achieving lower levels of prevalence than would prevail in the absence of a national strategy. These policies do, however, appear to remove some of the individual incentive to control disease.International Relations/Trade, Livestock Production/Industries,

Clicks or bricks? Online shopping adoption in Australia

Purpose: This research identifies and ranks the decision factors associated with online shopping adoption in Australia. Design/Methodology/Approach: Primary data for this study was collected with self-administered questionnaires and analysed using EFA and logit regression. Findings: The following factors, ranked in order of importance, influence online shopping behaviour in Australia: perceived risk, service quality, website factors, brand image, product variety and Australian product loyalty. The findings also show that demographic characteristics also influence the probability that Australian consumers will shop online. Originality/value: This is the first empirical study in which the decision factors influencing Australian consumers’ decisions to shop online are examined. The research contributes to the empirical literature on online shopping from a theoretical perspective as the modelling framework can be used to analyse online shopping behaviour in different cultural settings. Longitudinal studies based on the modelling framework can also be undertaken to identify emerging decision factors and to track the changes in importance of the current factors. The results will also enable retailers to make informed decisions on their existing or future shopping channels

Nonmarket valuation of water quality: Addressing spatially heterogeneous preferences using GIS and a random parameter logit model

The spatial distribution of agri-environmental policy benefits has important implications for the efficient allocation of management effort. The practical convenience of relying on sample mean values of individual benefits for aggregation can come at the cost of biased aggregate estimates. The main objective of this paper is to test spatial hypotheses regarding respondents' local water quality and quantity, and their willingness-to-pay for improvements in water quality attributes. This paper combines choice experiment and spatially related water quality data via a Geographical Information System (GIS) to develop a method that evaluates the influence of respondents' local water quality on willingness-to-pay for river and stream conservation programmes in Canterbury, New Zealand. Results showed that those respondents who live in the vicinity of low quality waterways are willing to pay more for improvements relative to those who live near to high quality waterways. The study also found that disregarding the influence of respondents' local water quality data has a significant impact on the magnitude of welfare estimates and causes substantial underestimation of aggregated benefits