My intention is to develop a series of posts on meat taxation, summarizing and building on earlier posts. This is the first in this exciting new series. (Warning: series not actually exciting.)
In the US, meat is subsidized fairly heavily, and in various senses. First, meat is an ultimate beneficiary of subsidies provided to crops: most of the corn grown in the US is fed to non-human animals or converted into ethanol, and the majority of the soybean harvest is used for animal feed (pdf here). So, any policies that support corn or soybeans provide substantial subsidies to meat agriculture, for which these crops are major inputs. Irrigation subsidies also promote corn and soybeans, so these are part of the indirect boost to animal agriculture, too.
Livestock husbandry receives various forms of direct subsidies, too. The USDA offers farmers insurance against livestock price decreases at significantly subsidized rates. Various disaster assistance programs are in place to help livestock producers when disease leads to excess morbidity or mortality, or grazing areas are undermined by bad weather, and so on (Congressional Research Service pdf here). Grazing fees for livestock on federally-owned lands are significantly subsidized. The Trump-era trade war with China led to substantial payments to the dairy and pork industries, while animal agriculture has received massive federal assistance during the Covid crisis (CRS report here).
The animal agriculture sector features various "checkoff" programs; here's the website introducing the checkoff system for beef. The checkoff system sets up a scheme of mandatory contributions from producers for marketing purposes, which might be hard to understand as a subsidy. (That is, checkoff payments sound a lot like a tax.) Nevertheless, the checkoff system certainly can act as a subsidy, in that it allows the industry to act in concert (like a cartel) to provide industry-wide services -- a unified front which in other circumstances might violate antitrust rules or at least be undone by free-riding on the contributions of others. Checkoff programs have brought us well-known ads such as "Got Milk?" and "Pork. The Other White Meat." If you have noticed that your pizzas have gotten cheesier in recent years, you also might want to thank a checkoff program; indeed, the very existence of Domino's Wisconsin 6 Cheese Pizza owes a debt of gratitude to the dairy checkoff.
The animal agriculture sector features various "checkoff" programs; here's the website introducing the checkoff system for beef. The checkoff system sets up a scheme of mandatory contributions from producers for marketing purposes, which might be hard to understand as a subsidy. (That is, checkoff payments sound a lot like a tax.) Nevertheless, the checkoff system certainly can act as a subsidy, in that it allows the industry to act in concert (like a cartel) to provide industry-wide services -- a unified front which in other circumstances might violate antitrust rules or at least be undone by free-riding on the contributions of others. Checkoff programs have brought us well-known ads such as "Got Milk?" and "Pork. The Other White Meat." If you have noticed that your pizzas have gotten cheesier in recent years, you also might want to thank a checkoff program; indeed, the very existence of Domino's Wisconsin 6 Cheese Pizza owes a debt of gratitude to the dairy checkoff.
Beyond such direct and indirect subsidies, meat production involves some environmental externalities, costs that the meat industry imposes but does not have to pay for. The emission of greenhouse gasses is one major environmental externality: just how major is a subject of much controversy, of course, but the existence of the greenhouse gas externality is not controversial. Other environmental externalities, including soil and water pollution, also are associated with animal agriculture. (Incidentally, factory fish farming is no friend to the environment, either.)
The build-up of resistance to antibiotics is yet another source of externalities connected to animal agriculture. (A nice five-minute video on some of the applied science of antibiotic resistance in animal agriculture can be found here.) As with greenhouse gasses, there's a global public bad feature of antibiotic and antimicrobial resistance.
Meat consumption (and production) is associated with some serious health problems. But it is at least arguable that these (or some of these) are not externalities -- people understand the risks, say, but eat meat (or work in a meat packing plant) anyway, the story might go -- and hence do not generate a rationale for applying a corrective tax. Negative health effects combined with some social subsidy to health care is a sort of budgetary spillover, but one that, once again, may not justify a Pigovian remedy.
Meat consumption (and production) is associated with some serious health problems. But it is at least arguable that these (or some of these) are not externalities -- people understand the risks, say, but eat meat (or work in a meat packing plant) anyway, the story might go -- and hence do not generate a rationale for applying a corrective tax. Negative health effects combined with some social subsidy to health care is a sort of budgetary spillover, but one that, once again, may not justify a Pigovian remedy.
The theme of the Animals and Econ blog must needs make an appearance here: as soon as you grant nonhuman animals any direct standing in cost-benefit analyses or evaluations of economic efficiency, then the externalities from industrialized animal agricultural appear to be prohibitively large.
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