The Economics of Farm Animal Welfare

This article reviews the literature on the economics of farm animal welfare. It starts with the challenge of defining and measuring animal welfare. Subsequently, the demand for farm animal welfare is evaluated from both the citizens' perspective and the consumers' perspective. The much-cited preference gap in between these perspectives constitutes a dilemma for the governance of animal welfare. Literature on the supply of farm animal welfare discusses the implications of enhancing farm animal welfare for production cost. The linkages between farm structure, farm technology, and animal welfare are discussed, and the frequently voiced hypothesis that smaller and more traditional farms automatically imply higher farm animal welfare levels is rejected. We examine the central challenge to the governance of farm animal welfare: its effects on competitiveness and trade. We also discuss objectives, governance instruments, the interplay of different policy instruments, and how to combine them for an effective and efficient strategy for farm animal welfare.