Carlo's Think Pieces

Reflections of a Filipino in the Netherlands

On Bio-industry

Posted by butalidnl on 3 September 2011

The business of raising chickens and pigs has grown into a full-grown bio-industry. ‘Mega-stalls’ for these animals are sprouting in the Dutch countryside.  It seems that raising the animals themselves is much more profitable than importing meat.  This is profitable when these animals are raised in ‘optimum’ growing conditions.

Mega-stalls have advantages of scale: personnel cost per animal is lower; less space per animal in terms of buildings (which at a later stage could be maximized further by building multilevel stalls), lower cost of buying feeds, bulk advantage in selling. At the same time, because of the scale of these stalls, they require a different ownership structure than the traditional family farm. Mega-stalls are generally corporate; and this means that it has to operate like corporations do, and not like family farms. They require attention to ROI (Return on Investment) because of the big bank loans needed to finance them. And with ROI comes corporate efficiencies, which may lead to ‘externalities’ (negative side effects) in the quest to maximize profits. One issue is that of their environmental impact – which boils down mainly to the disposal of waste. And then there is the issue of animal welfare – chicken/pig movements are restricted as much as possible, to optimize conversion of feed to meat. And then comes the issue of health – since large collections of animals are susceptible to all kinds of diseases, mega-stall owners tend to use a lot of antibiotics to lessen this risk. But this leads to antibiotic resistance being developed by bacteria in the meat, which means that bacteria that infect humans are more likely to be resistant.

All the issues related to mega-stalls could, in theory, be resolved by government regulations. However, since resolving these is in conflict with the whole rationale of having mega-stalls in the first place (which are built to maximize profit), it will be extremely difficult to regulate their operations by simply specifying environmental, animal welfare and health requirements.

One kind of regulation that may prove effective in controlling these ‘externalities’ of mega-stalls is by requiring that the meat coming from them be labeled. The government should require that all meat be packaged, and that these be labeled (note: not only the meat from mega-stalls need to be labeled). At the same time, imported  meat should also all be similarly packaged and labeled.  On the labels, it should be indicated how much fat, salt etc. that it has, and if no antibiotics were used in raising these animals. There would also be strict minimum requirements on environment, health and animal welfare.

The individual countries of the European Union could not do this by themselves. There needs to be a EU directive to implement a centralized labeling system. This way, it would not be possible for growers in one EU country to produce sub-standard meat, and export them to other EU countries.

When companies are forced to label their products (and an independent body should be in charge of inspecting for compliance) people could directly compare the quality of various kinds of meat. Hopefully, they would reject, or at least discount, lower quality meat – paying much less for it. It would then not pay, for example, to feed salt to chickens before slaughter – salt is sometimes added to increase slaughter weight of poultry or hogs, since a high salt content will make that meat cheaper. And animals who don’t move much will have a large proportion of fat, this will merit a lower retail price.

Here to Stay
Despite mega-stalls being eyesores and running counter to the cultural-determined accepted mode of agriculture, I think that further scaling up of the bio-industry is here to stay. All we can do is to minimize (or correctly price) their externalities. The growth of meat production in EU countries will eventually be balanced by meat production elsewhere – in grain producing countries like Ukraine, or nearer markets. And by that time, mega-stalls will only be enough to supply the meat requirements of a given country.

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