ArticlePDF Available

Empowering Market Regulation of Agricultural Animal Welfare through Product Labeling



In many western countries, rising public concern for the welfare of agricultural animals is reflected in the adoption of direct regulatory standards. The United States has taken a different path, preferring a “market regulation” approach whereby consumers express their preference for agricultural animal welfare through their consumption habits, incentivizing desired welfare practices with dollar bills and obviating the need for direct government regulation. There is, however, little evidence that consumers in the United States actually demand heightened animal welfare practices at market. This article explores the failure of market regulation and the welfare preference paradox posed by consumers who express a strong preference for improved animal welfare in theory, but who do not actually demand heightened animal welfare in practice. I argue that the failure of market regulation is due to the inability of current voluntary and nonstandard animal welfare labeling practices to clearly and credibly disclose to consumers the actual treatment of agricultural animals. As a corollary, effective market regulation of agricultural animal welfare could be empowered simply by improving animal welfare labeling practices.
A preview of the PDF is not available
... The USA livestock industry relies largely on market regulation, assuming consumers will incentivise producers through price and demand increases for high animal welfare products [18]. Lack of prescription by USA state and federal authorities makes animal welfare laws largely ineffective, with most regulations focused on the meat processing sector, and robust, independently audited on-farm schemes largely absent [18]. ...
... The USA livestock industry relies largely on market regulation, assuming consumers will incentivise producers through price and demand increases for high animal welfare products [18]. Lack of prescription by USA state and federal authorities makes animal welfare laws largely ineffective, with most regulations focused on the meat processing sector, and robust, independently audited on-farm schemes largely absent [18]. Some headway has been made into the assessment of welfare on farm through the introduction of Global Animal Partnership (GAP) measures in 2008 [19] and the Common Swine Industry Audit (CSIA) in 2014 [20]. ...
... While consumer demand for higher animal welfare products does have the potential to drive up welfare standards [38], this is only one determinant of purchasing behaviour (along with cost [43], quality attributes [42], perception of quality/health benefits [31]). Hence, the higher WTP generally does not translate into actual purchasing behaviour (the welfare-preference paradox) [18,31,43]. This conflict between ethical consumption and spending [43] is evidenced by higher demand at the lower price point, leading to an increase in intensive farming practices (particularly in poultry and pig industries) at the risk of potentially lower animal welfare [18]. ...
Full-text available
The five freedoms and, more recently, the five domains of animal welfare provide internationally recognised frameworks to evaluate animal welfare practices which recognise both the physical and mental wellbeing needs of animals, providing a balanced view of their ability to cope in their environment. Whilst there are many techniques to measure animal welfare, the challenge lies with how best to align these with future changes in definitions and expectations, advances in science, legislative requirements, and technology improvements. Furthermore, enforcement of current animal welfare legislation in relation to livestock in Australia and the reliance on self-audits for accreditation schemes, challenges our ability to objectively measure animal welfare. On-animal sensors have enormous potential to address animal welfare concerns and assist with legislative compliance, through continuous measurement and monitoring of an animal’s behavioural state and location being reflective of their wellbeing. As reliable animal welfare measures evolve and the cost of on-animal sensors reduce, technology adoption will increase as the benefits across the supply chain are realised. Future adoption of on-animal sensors by producers will primarily depend on a value proposition for their business being clear; algorithm development to ensure measures are valid and reliable; increases in producer knowledge, willingness, and trust in data governance; and improvements in data transmission and connectivity.
... In markets where labels are not adequately regulated, there can be too many standards and too little useful information about their performance, which can lead to a "race to the bottom" that results in undemanding standards as operators choose less costly but also less credible certification systems, especially if consumers do not understand the differences between labels or when label proliferation contributes to lack of comparability and to consumer uncertainty and confusion (Drugova et al., 2020;Harbaugh et al., 2011;Stéphan Marette, 2010;Prag, 2016). Private schemes tend to be perceived as less credible by consumers than public ones (Kelly & Jewell, 2018;Sullivan, 2013;Weinrich & Spiller, 2016). Trust is important for consumers' valuation of a label Janssen et al., 2016;Khachatryan et al., 2020;Tonkin et al., 2015). ...
Full-text available
Free full-text access to a view-only version of the paper: || Abstract: Improving the sustainability of the global food system is a policy priority. There are multiple types of sustainability labels in the food market, and policy-makers need to know what constitutes an effective label. We discuss the use of labels to inform consumers about the economic, social and environmental sustainability implications of their food purchasing choices. We categorise these sustainability labels and explain the opportunities they offer and the challenges they pose to be effective. Improved consumer information on the sustainability of food products can serve as an incentive for operators in the food supply chain to increase their sustainability. Specific choices made on the type of food label used are likely to affect their. A comprehensive mandatory labelling and certification scheme is a promising course of action from a policy perspective, if it covers the multiple dimensions of sustainability, and uses scoring and evidence-based criteria.
... To date, the only EU-wide system of compulsory labelling on animal welfare is that for table eggs, based on the EU legislation for laying hens. 159 Although the EU strategy 2012-2015 on animal welfare does not plan to extend compulsory labelling on animal welfare beyond eggs, several proposals 160 have been advanced for mandatory animal-welfare labelling, also in light, from a legal viewpoint, of its compatibility with WTO rules, 161 as the US-Tuna II dispute exemplifies. ...
Full-text available
In the European Union (EU) innovation society, animal welfare has reached its normative status, together with the increased ethical concerns of citizens and civil society in relation to animal welfare and dignity. However, several problems are impeding welfarism from gaining full traction on the European stage. This paper aims at scrutinizing some of those legal problems, using the ongoing (2019) CAP reform and labelling issues as case studies. Is the process of the CAP reform in line with the aim of fully integrating farm animal welfare into EU agricultural policy? Is animal welfare labelling gaining ground as an ethical-legal tool that certifies the achievement of high standards in livestock farming? These are the questions explored in this contribution. Both a historical perspective of farm animal welfare in Europe and an evaluation at the international level will enrich their analysis. The core argument of this study posits that legal answers to the CAP post-2020 and to animal welfare labelling schemes can legitimate a more sustainable model of EU agriculture. What is needed is a model of agricultural practices capable of aligning citizens' interests with the EU animal welfare strategy 2012-2015, while enhancing and strengthening the Union's normative approach to animal dignity.
... The citizen-consumer gap describes the fact that the percentage of the population that considers a higher animal welfare level important is typically substantially larger than the share of consumers buying products whose labels reflect this information. Although this phenomenon has even been described as a "welfare paradox" by Sullivan (2013), it is well known from other process qualities (Young et al. 2010) and does not necessarily constitute a market failure, as it can be explained by a variety of factors (Birner et al. 2002. For example, stated citizens' preferences may be biased due to social desirability and may reflect true preferences to a lesser degree than revealed market preferences. ...
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. Expected final online publication date for the Annual Review of Resource Economics Volume 9 is October 5, 2017. Please see for revised estimates.
Full-text available
There is widespread and growing concern among U.S. consumers about the treatment of farmed animals, and consumers are consequently paying attention to food product labels that indicate humane production practices. However, labels vary in their standards for animal welfare, and prior research suggests that consumers are confused by welfare-related labels: many shoppers cannot differentiate between labels that indicate changes in the way animals are raised and those that do not. We administered a survey to 1,000 American grocery shoppers to better understand the extent to which consumers purchase and pay more for food with certain labels based on an assumption of welfare improvement. Results showed that 86% of shoppers reported purchasing at least one product with the following labels in the last year: “cage or crate-free”, “free-range”, “pasture-raised”, “natural”, “organic”, “no hormone”, “no antibiotic”, “no rBST”, “humane”, “vegetarian-fed”, “grass-fed”, “farm-raised”. Of those who purchased one of the aforementioned labels, 89% did so because they thought the label indicated higher-welfare production practices, and 79% consciously paid more for the product with the label because they thought that the label indicated better-than-standard animal welfare. However, many of these labels lack uniform standards for the production practices they represent, and some labels represent production practices that do not influence animal welfare, thus the degree of the animal welfare impact of a given label is highly variable. These results indicate that labels need to clearly and accurately specify their animal welfare benefits to improve the consumers’ ability to purchase products that align with their expectations.
Numerous private entities—both national and international in scope—have developed or are in the process of developing nonregulatory standards to assure consumers that animals and natural resources used in agricultural production are properly treated. This chapter describes the differing approaches of three countries: one that uses voluntary standards to supplement legal standards (United Kingdom), one that uses voluntary standards as a substitute for legal standards (United States), and a third that uses voluntary standards to assist in interpreting and enforcing legal standards (Canada). The impact of these voluntary standards on international animal welfare initiatives is also discussed.
)) (comparing standards between various labels: Humane Farm Animal Care, Certified Humane Charts/standardscomparisonchart.pdf (accessed Apr. 13, 2013)) (comparing standards between various labels: Humane Farm Animal Care, Certified Humane, Animal Welfare Approved, Global Animal Partnership, USDA Organic, and American Humane Certified).
providing a model where consumers correctly infer credence-good provision from observable market data)
  • Econ
Econ. 107 (1997) (providing a model where consumers correctly infer credence-good provision from observable market data). [Vol. 19:391