Subsidies: Which reforms can help animals?

EXECUTIVE SUMMARY

To do as much good for animals as we can, it is important to understand the systems that are causing animals to suffer and die - and how to reform those systems to help animals.


One way to reform modern animal agriculture is through subsidies. Subsidies are payments made by governments to businesses or people. Some subsidies can have profound effects on the lives of animals. For example, governments can pay farmers to produce more meat, which can harm animals. On the other hand, governments can pay farmers to adopt practices that improve animal welfare, which can help animals. Promoting or abolishing these subsidies could therefore be an effective way for animal advocacy organisations to do good for animals.


In this report, we examine five types of subsidy reforms in animal agriculture, and we evaluate which of these reforms could be impactful campaign options for animal advocacy organisations.

  • Promoting welfare-conditional subsidies appears to be an impactful campaign. This type of subsidy involves the government paying farmers to adopt higher-welfare practices. Evidence from Switzerland and the EU suggests that this type of subsidy can bring concrete improvements in animal welfare, and tentatively even reduce the production of animal products, so long as the subsidies are well-designed.

  • Abolishing or reducing subsidies for meat production also has the potential to be an impactful campaign, but additional research is needed first and this is context-dependent. Initial studies suggest that abolishing these subsidies could decrease animal production. But there is also the risk that abolishing these subsidies could shift production away from cows and towards chickens, which could result in more animal suffering and death overall. Before any campaigns take place, a more sophisticated economic analysis is needed to provide more detail about the contexts in which this campaign could be good for animals.

  • The other three options we examined do not appear capable of helping animals. These options were abolishing subsidies for feed crops, promoting subsidies for plant-based foods, and abolishing fisheries subsidies. Each of these three options would either achieve nothing or even possibly harm animals.


We recommend that animal advocacy organisations consider campaigning for welfare-conditional subsidies, by which farmers are paid for adopting higher-welfare practices. This could involve increasing these subsidies in places where they already exist (Switzerland, the EU, and England) or establishing them in further countries. And we note that although this is the most promising subsidy campaign, the context in a particular country will determine if this campaign has a higher impact overall than other animal advocacy campaigns. This campaign should be one of many that organisations systematically analyse when considering which campaign would do the most good for animals.


We also recommend that a detailed economic study be conducted on the effects of abolishing subsidies for meat production. Such a study could unlock an opportunity for another high-impact campaign.


Lastly, we conclude with some strategic considerations that may help organisations campaign for subsidy reform.


Table 1. The five types of subsidies we consider in this report.


WHAT ARE SUBSIDIES?

A subsidy is a payment made by the government to a company or person. Subsidies can take the form of direct payments; grants; tax concessions; cheaper loans or loan guarantees; infrastructure support, like servicing a road to a factory; and market price support, where the government raises the price of products artificially (1). Subsidies in some parts of society can do a lot of good, such as by promoting education and paying for scientific research. However, in animal agriculture, subsidies can have profound effects on the lives of animals for both good and bad.


Background to subsidies in animal agriculture

Subsidies in animal agriculture are a powerful policy tool that can influence production and consumption, thereby affecting the lives of animals¹.


On the producer side, governments can provide subsidies to farmers or processors of animal products (2). Chicken meat, pig meat, sheep meat, bovine meat, and eggs are all among the top ten most subsidised food products globally (2). Similarly, governments can provide subsidies to farmers who produce crops that are used to feed farmed animals (3,4). One well-studied and controversial example of crop subsidies is the programme in the US - in 2021, the US government spent USD 100 billion on farm support, and that farm support made up over 10% of the total money earned by farmers (5). These types of support may be direct (e.g. cash payment) or indirect (e.g. keeping prices at some artificial level to encourage production). Subsidies also exist in wild-caught fisheries, where government support can make fishing more profitable than it would otherwise be (6). Globally, these subsidies have been estimated at around USD 35 billion in 2009, with Japan, China, and the US together making up about one-third of that sum (6).


Governments may also provide subsidies that encourage farmers to adopt higher-welfare practices. Switzerland and the European Union both have systems in which farmers can receive payments for implementing higher-welfare practices, and England is currently developing a similar system (7–9).


On the consumer side, governments can provide subsidies to reduce the price of particular foods, like fruits and vegetables, to incentivise people to buy more of those foods rather than animal products (10–13). Governments generally consider this type of policy to reduce greenhouse gas emissions or to promote human health, not to help animals (12).


Options for reform

Although there are a range of subsidies that affect the lives of animals, not all of these subsidies present effective avenues by which to improve the lives of animals. In this report, we focus on two key subsidy reforms that could be effective in helping animals. These are:

  • Increasing subsidies that encourage producers to adopt higher-welfare practices. The evidence suggests that these subsidies can bring concrete improvements for animal welfare, and there is even tentative evidence that these subsidies can reduce the production and consumption of meat. We conclude that increasing these welfare-conditional subsidies has the potential to improve the lives of animals, so long as the subsidies are well-designed.

  • Reducing subsidies that support the production of animal products. Although this reform looks promising, there needs to be additional research on the effects of this reform across the entire economy before the movement can be confident that this reform is an effective way to help animals.


Other subsidy reforms have been proposed, but the evidence suggests that these are ineffective in helping animals (reducing subsidies for feed crops, increasing subsidies for plant-based foods, and reducing fisheries subsidies). At the end of this report, we will explain the reasons why these appear ineffective.


INCREASING WELFARE-CONDITIONAL SUBSIDIES

Welfare-conditional subsidies involve the government giving subsidies to farmers who adopt particular practices that are better for animal welfare. For example, a government could make regular payments to farmers whose welfare practices exceed the legal requirements; or a government could make one-off grants to help farmers invest in the equipment needed for higher-welfare systems; or a government could make existing subsidies conditional on meeting new animal welfare requirements. To our knowledge, welfare-conditional subsidies currently exist in the EU and Switzerland, and they are also currently under development in England. A campaign could focus on increasing existing welfare-conditional subsidies paid inside these jurisdictions, amending those existing subsidies to do even more good for animals, or it could focus on establishing new welfare-conditional subsidies in further countries.


Campaigning for welfare-conditional subsidies can improve the lives of animals in two ways (Figure 1). Primarily, these subsidies can directly encourage farmers to adopt higher-welfare practices or systems, which allow animals to be farmed in a way that causes less suffering. Indirectly, these subsidies can reduce the amount of animals that can be produced in a country (e.g. by reducing stocking densities or increasing the cost of production) - in some cases, this may lead to fewer animals being farmed overall. There is also a risk that this policy could switch production from larger animals to chickens, which would be bad for animals overall, but we think this is only a risk if the welfare-conditional subsidies are specific to large animals. (This risk is also discussed below, 'Reducing subsidies for meat and animal products'.)



Figure 1. Theory of change for increasing welfare-conditional subsidies.


Like all policies, the specifics are very important. Whether this type of subsidy can improve the lives of animals depends on a few key details:

  • Is the subsidy incentivising farmers to actually change their practices? The payments need to encourage farmers to conduct practices or adopt systems that are not already in use, rather than simply paying farmers for things that the farmers are already doing.

  • Does the subsidy pay enough to incentivise farmers to participate? The payments need to be high enough to compensate farmers for additional costs or lost income.

  • Are the new practices or systems actually better for animal welfare? The practices need to represent genuine improvements for animals.

  • (Bonus) Could the subsidies also cause a reduction in the number of animals farmed? If the subsidies can cause fewer animals to be produced, then this can magnify the impact for animals.


Below, we summarise the evidence from existing welfare-conditional subsidies that this type of policy can indeed improve animal welfare - and, tentatively, reduce the number of animals farmed.


Switzerland's example

The first example of welfare-conditional subsidies comes from Switzerland, which has a system of voluntary payments for specific animal welfare improvements. These subsidies are governed by the Direktzahlungsverordnung (Direct Payment Ordinance) (14).


Switzerland's welfare-conditional subsidies are divided into two categories:

  • RAUS (regelmässiger Auslauf im Freien), which offers payments to farmers who allow animals regular outdoor exercise.

  • BTS (besonders tierfreundliche Stallhaltungssysteme), which offers payments to farmers who keep animals in higher-welfare housing systems.


Subsidies are offered to farmers of a wide range of animals: broilers, laying hens, pigs, cows, horses, goats, sheep, rabbits, turkeys, deer, and bison (14). Some payments are only offered for some types of animals, and there are also some restrictions by the age and sex of animals. Both types of subsidies are associated with government labels (9).


The uptake of the subsidies is very high (Table 2). RAUS and BTS payments each correspond to over half of Switzerland's populations of laying hens, pigs, and cows. BTS payments in particular cover 97% of broilers, 93% of laying hens, and 68% of pigs (15).


Table 2. The uptake of welfare-conditional subsidies in Switzerland in 2019 (15). The two components of Switzerland's animal welfare subsidy system are RAUS (regelmässiger Auslauf im Freien / regular outdoor exercise) and BTS (Besonders tierfreundliche Stallhaltungssysteme / animal-friendly housing systems).


There have been several scientific studies on how Switzerland's welfare-conditional subsidies benefit animals.


Bianchi (9) measured the effect of Switzerland's welfare-conditional subsidies on the production and consumption of meat from pigs, chickens, and bovines. The study analysed data on meat production between 1970 and 2013 (the RAUS and BTS schemes were established in 1993 and 1996, respectively). The study compared Switzerland's production to a synthetic control group composed of a weighted combination of neighbouring countries. This allowed the author to produce a counterfactual trend, which estimates how Switzerland's meat production would have evolved had the subsidies not been established.


The study concluded that Switzerland's production of both pig and chicken meat (but not bovine meat) were both lower than they would have been had the subsidies not been established. In 2010, the production of pig meat was about 60,000 tonnes (19%) lower than it would have been without subsidies; in the same year, the production of chicken meat was about 23,000 tonnes (27%) lower than it would have been without subsidies.


The study also found a similar decrease in the total domestic supply of meat, which rules out the possibility that the decrease in production was countered by an increase in imports; rather, the evidence shows that both production and consumption decreased. Switzerland's meat sector does not depend heavily on imports, which the author speculates may be because consumers have a strong preference for national products. A similar scenario could also arise if the domestic industry is protected through tariffs or quality standards. This study provides evidence that the welfare-conditional subsidies can reduce the overall number of animals farmed.


Cagienard et al. (16) examined the effects of the BTS scheme on the welfare of pigs. The authors compared 47 farms participating in the BTS scheme (higher-welfare housing) and 37 farms using conventional, lower-welfare housing. The authors conducted group and individual examinations to gather data on numerous welfare indicators, including lesions, lameness, respiratory disease, diarrhoea, ear biting, skin abnormalities, injuries, abscesses, sunburn, recumbency, ill-thrift, and behavioural abnormalities. Farms participating in the BTS subsidy program were associated with higher health and welfare of pigs.


Van Aken et al. (17) examined the effects of the BTS scheme on the welfare of cows. The authors compared 179 farmers participating in the BTS scheme (higher-welfare housing, including free stalls and increased lying comfort) and 229 farmers using conventional housing (tie stalls). The authors collected data on a number of welfare indicators, including udder health problems, veterinary costs, and antibiotic treatments. Farms in the BTS subsidy program were associated with higher health and welfare of cows.


These studies provide some evidence that Switzerland's subsidy system can improve animal welfare and even reduce the number of animals farmed. Some knowledge gaps remain. Although the welfare effects of the BTS scheme have been studied, the welfare effects of the RAUS scheme have not. Also, there has been no rigorous scientific study on whether either subsidy system causes an improvement in the health and welfare of chickens.


Another weakness in the evidence on Switzerland's subsidy system is that the two studies on the welfare benefits of the BTS scheme were observational (16,17). Strictly speaking, these studies cannot determine whether participation in the BTS scheme actually caused the welfare improvements. It is possible that the farmers who participate in the scheme are simply the farmers who are more enthusiastic about animal welfare. This would also manifest as a correlation between participation in the BTS scheme and higher animal welfare, meaning that the two studies cannot demonstrate that participation in the BTS scheme actually caused higher animal welfare.


The European Union's example

The second example of welfare-conditional subsidies comes from the European Union (EU). In the EU, the key policy regulating agriculture is the Common Agricultural Policy (CAP). The CAP has a broad scope - it aims to provide income to farmers, improve productivity and food supply, and achieve a collection of goals for society, like addressing climate change and maintaining rural communities.


The CAP has some mechanisms by which subsidies are provided to farmers who protect animal welfare. There are two types of payments that farmers in the EU can receive for animal welfare (8). Pillar I payments are the standard payments received by farmers. These payments are reduced if farmers are found to be non-compliant with animal welfare legislation. Pillar II payments are additional payments for animal welfare practices that go beyond the existing legislation and aim to compensate farmers for lost income or costs incurred. Member States can choose to offer these Pillar II payments to their farmers (18).


However, when it comes to animal welfare, the CAP has a number of shortcomings. The CAP has been criticised as promoting an industrialised farming system, with negative consequences for animal welfare (19). Member States provide only a small budget for animal welfare payments at best, with many Member States providing no money for animal welfare at all (20) (Figure 2). The voluntary payments made by Member States are targeted towards dairy cows in most countries (21). This is at odds with the fact that, across the EU, farmed chickens, rabbits, and pigs are far more numerous (22,23). Ryland (24) calls the 2014-2020 implementation of the CAP 'disappointing' due to the failure to explicitly or directly improve farm animal welfare. This has only partially improved in the 2023-2027 implementation of the CAP, with animal welfare included under the heading of 'protect food and health quality' (25).


Under the CAP, animal welfare is mostly addressed through rural development measures. The CAP measure best suited for voluntary improvements of animal welfare is M14 - Animal Welfare (under Pillar II) (8). There are other measures that can influence animal welfare, but M14 is most effective at fostering a set of coherent animal welfare practices (8).


However, M14 has not been widely implemented. Only 34 out of 118 rural development programmes across 17 Member States have implemented M14, and these have mostly targeted dairy cows and pigs (8). Figure 2 illustrates the differences in spending on M14 across Member States (26).


Figure 2. Spending on the measure M14 (animal welfare) in EU Member States in 2014-2020 in millions of euros. Graph from European Court of Auditors (26).


There is reason for optimism: where animal welfare has been addressed through M14 and other rural development measures, it has often succeeded in improving animal welfare. There are examples of M14 measures targeting chickens, pigs, cows, sheep, goats, rabbits, and ducks (8). Successful examples have been most frequently identified for dairy cows - there are far fewer successful examples for pigs and chickens, and there are none for rabbits. For example, for chicken farms, measures have provided enrichment, free housing, microclimate control, outdoor access, and larger space allowances (8). On the other hand, there have also been unsuccessful examples - in some cases, voluntary schemes under M14 overlap with private certification schemes, meaning that the M14 payments do not bring any actual benefit. Worryingly, there have even been cases where M14 payments have been made to farms that do not even meet the minimum legal requirements for animal welfare.


There has been no monitoring and evaluation by the EU of the actual effects of M14 on animal welfare (26). It is unclear how many animals are covered by M14.


The European Economic Interest Group, in a report commissioned by the European Commission, concluded that Member States should implement more voluntary animal welfare measures to make the CAP more effective at improving animal welfare (8). This Group also recommended that such measures offer payments large enough to incentivise farmers to participate - farmers have often complained that payments are insufficient to justify adopting higher-welfare practices. In contrast, payments offered by Spain to sheep and goat farmers in Castilla La Mancha were sufficient to cover a high proportion of animals (8).


At the level of the EU, the CAP itself undergoes periodic reform, with the next reform scheduled for between 2025 and 2027 (27). Although reform at the level of the EU may be preferable for various reasons (e.g. to avert concerns about making a single country's industry less competitive (28)), it is not plausible to reform the CAP outside of the specific reform period. Outside of that period, it would be far more tractable for organisations to work at the level of the Member State. Member States have the ability to establish payments for particular voluntary animal welfare commitments (Pillar II), and animal advocacy organisations can campaign for Member States to do so. However, these campaigns may also need to wait for particular time periods, as Member States generally develop their strategic plans for implementing the CAP in certain windows.


England's example

The third example of welfare-conditional subsidies comes from England, although this subsidy programme has not been implemented yet. After leaving the EU, the UK passed the Agriculture Act 2020. This Act, which is mostly relevant to England, operates on the principle of 'public money for public goods' - farmers will be paid for providing public goods, including animal welfare - plus other things like land and water management, public access to the countryside, cultural and natural heritage, reducing environmental hazards, mitigating climate change, and conservation of biodiversity (7).


The Transition Plan (29) lists some ways in which payments might be used to promote animal health and welfare:

  • Health and disease support to control and eradicate animal diseases

  • Capital grants to fund investments that improve animal welfare

  • Payments to farmers where animal welfare is continually demonstrated


England is currently in an agricultural transition period, during which the specifics of these subsidy systems are being developed. These subsidies will be introduced in full from 2024 (29).


Implementing welfare-conditional subsidies in further countries

Organisations interested in campaigning for new welfare-conditional subsidies can maximise their impact for animals by influencing the specific details of the subsidy policy. We know what factors are likely to influence the impact of a welfare-conditional subsidy policy. These factors are summarised in Table 3.


The main effect of welfare-conditional subsidies is to improve the welfare of the animals covered by the subsidies. All else being equal, we can expect to help more animals if there are more animals in a jurisdiction, if a higher proportion of animals are covered by the subsidy, if a higher proportion of animals experience welfare improvements from the subsidy that they would not have otherwise, and if the welfare improvement itself is substantial.


The secondary effect of welfare-conditional subsidies is to decrease the number of animals farmed overall. All else being equal, we can expect to reduce the number of animals farmed by a larger amount if the subsidy causes a decrease in domestic production (e.g. by increasing cost or reducing stocking density), if the domestic industry is protected from imports (e.g. through import tariffs, quality standards, or consumer preference), and if consumers substitute away from eating chickens and fish.


All these factors in the table require judgement calls based on knowledge of the context within a jurisdiction. The only exception is the number of animal life-years improved, which can be calculated by multiplying together its four component factors.


Table 3. Factors that can be considered when designing welfare-conditional subsidies to benefit animals as much as possible. There are two main effects, each of which consists of several umbrella factors. Umbrella factors are themselves made up of smaller component factors.


Policy in animal welfare and agricultural economics in a country are not always set by that country's government. As such, this analysis should be conducted at the level of the relevant jurisdiction. In a given location, the jurisdiction relevant to animal welfare subsidies could be a sovereign country but could also be a state, territory, or autonomous body within a country (like South Australia), a constituent country (like England), or a supranational body (like the EU).


Almost all of these depend on the specifics of how the subsidy policy is designed and implemented. Only a few of these factors depend solely on the jurisdiction (number of animals; protection of domestic industry). You may also notice that some of the factors in the table relate to the dot-points listed earlier in this report (see the text below Figure 1).


Lastly, it is important to consider the animal species being targeted by the subsidy. If a subsidy affects multiple species, as the Switzerland and EU examples do, this analysis may need to be broken down by species.


REDUCING SUBSIDIES FOR MEAT AND ANIMAL PRODUCTS

This reform would abolish or reduce subsidies that support the production of meat or animal products. These subsidies can be implemented for many reasons, including to increase production of meat or animal products, to enable producers greater freedom in decision-making, and to manage the risk to producers (30).


There are two main ways that reducing subsidies for animal products can cause the number of farmed animals to decrease (Figure 3). Firstly, if there is an increase in the costs of production of a particular animal, the profit to producers would likely decrease. This would incentivise producers to move away from production of that animal, thus decreasing the number of individuals farmed. Secondly, a lower profit may cause an increase in the price of the animal product to consumers. This could cause consumers to demand less of that animal product, potentially also decreasing the number of individuals farmed.


However, there may also be complex economic effects that are not captured by these two pathways - the direction of such effects is unclear, so it may still be possible for this subsidy reform to be overall bad for animals. These economic effects are impossible to predict without a detailed economic model. To illustrate, later in this report, we discuss a different type of subsidy reform (reducing subsidy for feed crops). In that case, economic modelling revealed that unexpected economic effects could actually cause animal production to expand (31). The increase in production was due to complex cross-price effects on the market, as well as farmers and capital moving away from less-profitable crop production towards more-profitable animal production. These two mechanisms could plausibly apply to reducing subsidies for meat and animal products.


In particular, production could move away from larger animals, like cows and sheep, towards smaller animals, like chickens. This is a particular risk given that many subsidies supporting animal agriculture are specific to these larger animals. Farming chickens causes more suffering and more deaths for a given unit of meat, and chickens generally experience worse welfare conditions than cows and sheep (the 'small-animal replacement problem') (32–34).


For these reasons, reducing subsidies for meat and animal products could plausibly be overall bad for animals. It is also plausible that this risk would not materialise, and that reducing subsidies for meat and animal products would have the intended effect of helping animals. A modelling study that considers economy-wide dynamics could examine this risk and evaluate the circumstances under which production would increase. With that knowledge, the animal advocacy movement can make more informed decisions about whether, and in what contexts, to campaign for reducing meat subsidies.



Figure 3. Theory of change for reducing subsidies for meat and animal products.


There are two useful, well-documented examples of where subsidies for meat and animal products have been abolished. There have been other examples of this reform, but these are just the two examples for which scientific studies have estimated the effects of reform on the production of meat and animal products.


New Zealand's example

In New Zealand, subsidies for animal production were abolished during the 1980s. This reform was motivated by economic reasons (the subsidies had become a very large proportion of the government's budget) and the negative environmental effects of the subsidies. Vitalis (35) compared animal production in New Zealand before and after these subsidies were abolished, and we have extended that comparison to include chickens.


Since the abolition of the subsidies, there has been a decrease in the number of sheep killed (Figure 4). This was also accompanied by a higher efficiency (i.e. more meat produced per animal killed) and meat quality. Since farmers moved towards other types of farming, horticultural production increased.


Notably, there was an increase in the number of farmed chickens killed annually over that same period. Measured in terms of animals killed per year, the increase in chickens killed is greater than the decrease in sheep killed. There was also an increase in the number of farmed cows (and deer, which do not appear on our graph), although this increase was much smaller than the decrease in the number of sheep (Table 4).


This data relies on comparing production levels before and after New Zealand's subsidy reform. It is difficult or impossible to attribute the changes in production solely to the subsidy reform, as there would have been many other changes in agricultural practice and consumer preferences throughout that two-decade period. However, one could speculate: subsidies could be set up such that farmers are incentivised to produce one type of animal rather than another. As such, it is possible to speculate that abolishing this subsidy could have caused farmers to move away from sheep production towards chicken production. This could have caused an overall increase in the number of animals killed.


In any case, the increase in the number of chickens and cows (and deer) killed since the subsidy reform should provide a warning that subsidy reforms can sometimes do more harm than good.


Figure 4. Changes in the numbers of animals farmed in New Zealand. The country's subsidy reform took place in the mid-1980s (black dotted line). All data is from FAO (36), except for the initial size of the sheep population (purple dashed line) from Vitalis (35).


Mexico's example

The second example comes from Mexico. Mexico implemented a collection of economic reforms throughout the 1980s and 1990s, which included the phasing out of price supports and consumer subsidies. The OECD used economic simulations to predict how these reforms have affected the production and consumption of pig and beef, compared to a hypothetical world where the reforms were not implemented (37). The simulations estimate that, using 2005 production and consumption values, the reforms caused beef production to decrease by 22% and beef consumption to increase by 8%. Net beef imports increased, which may account for the finding that consumption increased despite production decreasing. Also, the reforms caused pig production to decrease by 10%, and pig consumption to decrease by 4%.


The Mexico example shows, again, that reducing subsidies for meat can reduce the number of animals farmed for food - but can also increase the number of some types of animals, highlighting the fact that this type of subsidy reform carries risks for animals.


Research needed to unlock this opportunity

To our knowledge, there have been two studies on the effects of this subsidy reform on animal production. The study on New Zealand's reforms (and our subsequent analysis in Table 4) used a before-after methodology that, strictly speaking, did not consider the counterfactual effects of the reform (35). The study on Mexico, through its use of economic simulations, did consider the counterfactual effects of the reform - however, this study did not consider all effects of the subsidy reform (37). Both studies found a decrease in the production of at least some types of animals. However, in New Zealand, other types of animal farming expanded, and in Mexico, beef consumption increased.


There has been no economic study that examines the effects of this type of subsidy reform across the whole economy. This is a critical knowledge gap. It is entirely possible that, through indirect economic effects, animal production increases for other species or in other countries². An economic modelling study that estimates, at this broad scope, the impact of abolishing subsidies for meat and animal products on production could determine the circumstances in which abolishing subsidies would be overall good (or bad) for animals. This could provide the evidence necessary for the movement to know when this type of reform is overall good for animals. Accordingly, a study like this could unlock a potentially impactful campaign opportunity to improve the lives of animals.


OTHER (LESS EFFECTIVE) SUBSIDY REFORMS

There are three other types of subsidy that have received interest in the animal advocacy movement. However, the evidence suggests that these types of subsidy reform would not improve the lives of animals.


Reducing subsidies for feed crops

Most of the debate on this topic has focused on the US. In the US, the federal government provides a large amount of subsidies for farming. Most of the farm subsidies in the US focus on commodity crops, like corn, soybeans, and wheat. These farm subsidies are controversial for numerous reasons (3).


The biggest buyer of these commodity crops are factory farms, as these crops are used as animal feed. For this reason, some people have suggested that abolishing crop subsidies could cause factory farming to become less profitable, which could reduce the number of animals who are farmed. If these crop subsidies were abolished, then the production costs of US factory farms could become 6-13% more expensive (3,4,38).


Unfortunately, there are two reasons why abolishing crop subsidies would not reduce the production of animals. Firstly, the economy consists of complex dynamics across different products and markets - abolishing crop subsidies would cause complicated, unexpected results that would outweigh the effects on the costs of factory farms. Secondly, if crop farming becomes less profitable, resources (like capital and labour) would move to other types of farming, including animal agriculture (31).


In fact, one study did model the overall, economy-wide effects of abolishing crop subsidies. The study found that animal agriculture expands - the US would produce more chickens, more pigs, and more cows (31).


Therefore, the evidence shows that reducing subsidies for feed crops is unlikely to help animals. Although this evidence focuses on subsidies in the US, similar dynamics are likely to hold in other countries. It is conceivable that there are countries where reducing subsidies for feed crops may indeed help animals. However, to have confidence that this is an effective campaign, a sophisticated economic model would need to show, under various sets of assumptions, that reducing these subsidies would reduce the number of animals farmed.


Increasing subsidies for plant-based foods

It has been suggested that providing subsidies for plant-based foods (whether fruits and vegetables, or plant-based meat alternatives) could cause people to eat more of those foods and, accordingly, substitute away from meat.


Unfortunately, economic studies have found that this generally does not happen. Subsidies for plant-based foods are unlikely to cause people to eat less meat and animal products (39). For fruits and vegetables, a systematic review concluded that there is no relationship between the price of fruits and vegetables and the consumption of meat and animal products (40). For plant-based meat alternatives, studies have found that consumers generally do not perceive plant-based meat alternatives as substitutes for animal-derived meats (11,41). Therefore, increasing subsidies for plant-based foods does not appear to be a useful intervention for improving the lives of animals. This may change in the future if people begin to perceive plant-based meat alternatives as legitimate substitutes for animal-derived meats (11).


Reducing fisheries subsidies

Subsidies in fisheries are already controversial from the perspective of biological conservation - these subsidies often allow fisheries to catch more fish than they otherwise would, which can contribute to fishing being economically and ecologically unsustainable (6). For this reason, there has been lots of effort, including talks at the World Trade Federation, to reform fisheries subsidies (42).


From the perspective of animal advocacy, reforming fisheries subsidies would be good if that reform caused fewer fish to be caught overall. Although the effects of fisheries subsidy reform vary depending on the specifics of the reform, it is common for reforms to have projected effects like: fishing effort is reduced; fewer fish are caught in the short-term; the size of the fish population grows; and more fish are caught in the long-term (42). In fact, allowing more fish to be caught in the long-term is often an explicit goal of these reforms.


Fisheries subsidy reform would probably cause more fish to be brought into existence and more fish to suffer highly painful deaths by being caught in fisheries. This additional suffering would likely outweigh any benefits from fewer fish being caught in the short-term. As such, from the perspective of animal advocacy, it is not clear that this type of reform is good.


CAMPAIGNING FOR SUBSIDY REFORM

We have discussed a number of times when agricultural subsidies have been reformed in various countries. These examples provide some lessons that may be useful to animal advocacy organisations campaigning to reform subsidies:

  • Where subsidies are abolished, a primary motivation is to reduce government spending. For example, New Zealand's government was forced to eliminate agricultural subsidies in the 1980s because they had become too expensive (35), and Jordan's government was motivated to lift a feed subsidy in 2007 due to pressure on the national budget (43).

  • Subsidies for meat production generally have environmentally harmful effects. These effects can provide further support and justification to campaigns seeking to abolish these subsidies (35).

  • Some subsidy reforms are driven by pressures from the World Trade Organisation to reduce subsidies that directly support production. This was one motivation for a 2005 reform of EU-funded subsidies in the UK (44).

  • There are some examples of animal agriculture sectors in particular countries where most farms are economically unsustainable without subsidies. This appears to be the case for the goat sector in Greece and was also true of many farms in the UK in the early 2000s (44,45). Abolishing these subsidies could, therefore, cause major reductions in meat production. However, it is unclear whether governments would actually allow these industries to collapse in reality, as this would have profound implications for food supply and social well-being.

  • Abolishing meat production subsidies can cause harm to people. New Zealand's subsidy reform did bring some social costs - some farmers were forced to draw on social welfare payments and the populations in some rural towns were reduced, although these both occurred less frequently than what was predicted (35). Tragically, there were also some suicides (35). In Jordan, the removal of the feed subsidy caused harm to the livelihood of some disadvantaged groups (43). Where subsidy reform risks causing harm to people, it is critical for reform to be accompanied by transitional assistance from the government to prevent this harm (35,43). The money that the government saves could also be spent on helping people in other ways.


CONCLUSION

In this report, we evaluated five types of subsidy reforms in animal agriculture.


Welfare-conditional subsidies, where farmers are paid to adopt higher-welfare practices, appear to be an impactful way to help animals. Evidence from Switzerland and the EU suggests that these subsidies can bring concrete improvements in animal welfare, and possibly even reduce the production of animal products, as long as the subsidies are well-designed. We recommend that animal advocacy organisations consider campaigning for welfare-conditional subsidies, by which farmers are paid for adopting higher-welfare practices. This could involve increasing these subsidies in places where they already exist (Switzerland, the EU, and England) or establishing them in further countries.


Abolishing or reducing subsidies for meat production also has the potential to be an effective campaign, but additional research is needed first. Initial studies suggest that abolishing these subsidies could decrease animal production, but a more sophisticated economic analysis is needed to confirm this before any campaigns take place. We recommend that such an analysis be conducted, as this study could unlock a new campaign option.


The final three options do not appear capable of helping animals: abolishing subsidies for feed crops, promoting subsidies for plant-based foods, and abolishing fisheries subsidies would either have no effect or possibly even harm animals. We recommend that animal advocacy organisations considering these campaigns choose a different campaign instead.


If you are considering campaigning for this topic, or deciding what animal advocacy campaign to launch, please reach out to us. We would like to hear from any organisations that may have been considering working on these topics so that we may support you in prioritising your resources towards the most impactful opportunities.


NOTES

1. A similar policy involves placing taxes on meat. Our detailed research report on meat taxes is available here.

2. This raises the question of whether welfare-conditional subsidies (the first class of subsidies we considered in this report) should also be analysed in a sophisticated economic model before being chosen as a campaign. Although welfare-conditional subsidies could plausibly increase production, we do not think that this is a major risk. Welfare-conditional subsidies can increase the costs of production and/or decrease stocking densities, which are likely to decrease production (9).

Nevertheless, it is possible for welfare-conditional subsidies to switch consumption from cows towards chickens and fish, which would cause overall harm to animals. This is an important risk to consider with welfare-conditional subsidies, and it is listed in Table 3.


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Cover image by Kurt Liebhaeuser on Unsplash


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