Assessing Consumer and Producer Preferences for Animal Welfare Using a Common Elicitation Format

Uwe Latacz‐Lohmann and Julia Anette Schreiner

Journal of Agricultural Economics, 2019, vol. 70, issue 2, 293-315

Abstract: We assess pig farmers’ willingness‐to‐accept (WTA) higher farm animal welfare (FAW) standards and consumers’ willingness‐to‐pay (WTP) for thus enhanced standards. The analysis is based on discrete choice experiments with nearly identical choice sets for both farmers (N=140) and consumers (N=554). Based on preference estimates from a random parameter logit (RPL) model, supply and demand curves for high‐welfare pork in Germany are estimated and market equilibria are derived for alternative levels of FAW. We find that estimates of consumer WTP are significantly positive for all FAW attributes: consumers value more surface space per pig, more bedding and manipulable material, less surgical interventions and shorter transportation times. In contrast, our model revealed significant producer WTA estimates only for surface area per pig and the amount of bedding material on offer, but not for the other FAW attributes. Farmers who expect to continue farming and engage in direct marketing are more likely to adopt higher FAW standards. Male consumers and those who find price more important than brand, origin or taste are less likely to buy high‐welfare pork, as are consumers who never purchase organic meat products. Market simulations for high‐welfare pork indicate increasing divergence between demand and supply with rising FAW standards. We estimate a market share of 44.6% for pork produced in compliance with an entry‐level FAW programme with standards only slightly above the legal minimum. Programmes with more demanding standards are estimated to gain much smaller market shares.

Date: 2019
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