Sullivan (2013) on Animal Welfare Labels

Sean P. Sullivan, “Empowering Market Regulation of Agricultural Animal Welfare Through Product Labeling.” Animal Law Review 19(2), 2013. 

• The welfare of (so-called) agricultural animals receives little legal protection in the US.

• Two sources of federal animal protection, the Humane Slaughter Act and the Twenty-Eight Hour law, exclude poultry -- and the Slaughter Act excludes fish, too. Even these federal rules are underenforced.

• State-level laws specifying better animal welfare standards (than what federal law calls for) might be ruled unconstitutional as a violation of the Dormant Commerce Clause. [In April 2023, we are awaiting a Supreme Court decision that will (presumably) directly address this issue.]

• The US relies significantly on “market regulation” (consumers voting with their wallets) to provide animal welfare. Under this approach, some firms will cater to consumers who are not very interested in animal welfare, while other firms will provide higher animal welfare (meat and other products) aimed at consumers who are willing to pay for enhanced animal welfare. [Of course, it is asking a lot for market regulation to produce "socially optimal" levels of animal welfare, even if you accept the nearly-always-unspoken-but-there premise that it is only human preferences that count for social welfare.]

• In practice, there seems to be very little consumer willingness-to-pay for higher animal welfare products (at least when this article was published in 2013 – has this situation changed?) People say they are interested in providing better welfare to farm animals, but food purchases provide little evidence of such an interest.

• One “resolution” of the paradox is that consumers do not have an easy means to actually purchase enhanced animal welfare products.  The problem is that the information of how animals are treated is hard (or impossible) to judge when making purchasing decisions – so producers lack an incentive to devote resources to higher animal welfare.

• A credence good or characteristic is one where consumers are not sure of the “quality” of that characteristic even after they have purchased and consumed the product (as opposed to search or experience goods). If you consumed a food item earlier today with a dairy or egg ingredient, do you know the welfare provision for the animal who supplied that product? [My students admit that they don't.]

• Part of the problem is that labels on consumer animal products often lack credibility and clarity.  Current rules forbidding false or misleading labels are rendered pretty toothless when the actual animal welfare conditions are not monitored. Widespread absence of third-party auditing implies that animal welfare claims lack credibility. 

• The voluntary provision of credible labels can be crowded out by a plethora of not credible labels (muddying the waters or signal jamming) – even labels are a credence characteristic! For instance, “free range” does mean something about the living conditions of poultry (though not other animals, and not even egg laying hens) – but it doesn’t mean, for instance, that most chickens ever spend any time outdoors. "Pasture-raised," "grass-fed," "natural" – these terms (and others) lack standardized definitions.

• If animal welfare is a credence attribute, producers will only provide the minimum level of welfare that is consistent with profit seeking. 

• Credible labels could convert animal welfare into a search good, as opposed to a credence good.

• Making labels credible will require some level of harmonization, standards to earn a label like "high-animal-welfare-certified." But what level of animal welfare should be required to earn such a designation?

• And credible labels require that the conditions they certify are subject to verification. Is the USDA the right entity to engage in such verification, given its dual role in both regulating agriculture and promoting it? 

• A fairly coarse label like "high-animal-welfare-certified," could be integrated with less coarse supplements (like "enhanced and diverse outdoor environments").

• So, moving towards a credible system of labelling could help market regulation result in something closer to the levels of animal welfare people really desire. But we still are only talking about consumer preferences, not the preferences of the animals themselves.