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An alternative interpretation

The amount of investigation and analysis needed to understand the intensification of animal agriculture fully could fuel a small industry of research in history, economics and rural sociology. In the absence of such research, the following discussion proposes a hypothesis about the factors that led to intensification. This hypothesis appears to make a closer fit with some of the available facts than does the Standard Critique, and it suggests a different set of actions to address animal welfare concerns associated with intensification.

In the nineteenth century, the main methods of transporting animals over long distances were the rail and water systems. Because these were accessible to only a certain fraction of farms, many animals could not easily be sent to concentrated slaughter facilities far from their point of origin. Thus, many animals would have been slaughtered on the farm or in local facilities. Although certain products such as smoked ham and salted pork were sufficiently preserved to be transported for sale elsewhere, most animal products, being highly perishable, must have been sold fairly close to the point of production through small, local butcher shops, dairies and grocery stores, which were common in industrialized countries until well into the twentieth century. Hence, farmers producing animal products would often have found themselves in competition with a modest number of other local producers working under the same conditions of weather, feed availability and labour costs.

However, the twentieth century saw two forms of technological development that must have had a profound influence on the marketing of animals and animal products. One was the development of new ways to preserve perishable products (refrigeration, deep freezing, rapid drying) that allowed animal products to be kept for much longer periods and thus to be shipped to distant markets. The other was the vast increase in road transportation, which allowed live animals to be shipped from virtually any farm to distant slaughter plants and made it easier for the eventual products from animals to be shipped to markets in different regions, different countries or different continents.

These two developments would have allowed the slaughter and processing industries to become concentrated in fewer and fewer companies, because a single plant could source animals and sell products over a very large geographic area. With a vast number of producers selling to a small number of large processors, competition among producers presumably became intense. Given these conditions, we might expect to see periods when producers experienced very low profit per animal until something happened to reduce the pressure of competition. Competition might be reduced, for example, through the development of a supply - management system or marketing cooperative, or if many producers went out of business and supply fell relative to demand, or if production consolidated to the point that there were fewer producers in competition with each other.

This paper will suggest that pressures created by periods of low profitability played a key role in the intensification of animal production and had important effects on animal welfare. First, however, let us test whether the two key assumptions - increased movement of animal products and periods of low profits - fit with the facts.

Was intensification accompanied by increased movement of animal products? The assumption is difficult to test directly because most transportation was probably within national boundaries and not subject to data collection. However, if we consider export as an indicative tip of a much larger iceberg (bearing in mind that international transport was likely to have developed in the wake of increased domestic transport and, therefore, that export statistics may represent a later indicator of an earlier trend), then available data do indicate that the movement of animal products was increasing rapidly during the half century when the intensification of animal production was in progress. As shown in Annex Table 2, the rate of growth in exports of meat during the period 1961 - 2001 far exceeded the rate of growth of production, for several commodities. For poultry meat, the percentage exported rose rapidly from 3.4 percent in 1961 to 13.1 percent of a much larger output by 2001. For pig meat and bovine meat, the percentage exported roughly doubled during this time. In contrast, for mutton and goat meat, products of animals that were less subject to intensification, there was little change in the percentage exported.

Was the increased size of markets accompanied by low profits? Data need to be examined from many commodities and countries, but available figures from the United States of America show that this did occur at least in some cases. According to data from Dr John D. Lawrence of Iowa State University (Annex Table 3), profit from farrow-to-finish pig production in the United States of America averaged about US$21 per animal (roughly US$0.20 - 0.25 per kilogram) in 1974 - 79 and then declined to about US$7 per animal in the 1980s and US$4 in the 1990s, with years of loss mixed with years of modest profit. If we take inflation into account, the fall in profit would be even more drastic than these figures imply. The United States chicken meat industry, which experienced massive consolidation earlier than the swine industry, was also earlier to experience near-zero profit levels. In 1970 - 79, United States chicken production generated profits in only five of the ten years, with an average profit of only about US$0.02 per kilogram during the decade. The industry underwent massive consolidation to the point that about half of production was controlled by ten companies by 1980 and by five companies by the mid-1990s (Thornton, 2003), and profits then became higher and more consistent. Egg production in the United States of America underwent a similar process (Annex Table 3).

Periods of low and fluctuating profit could account in several ways for the key features of the intensification of animal production. First, low profits must have been a powerful factor in the move towards larger farms. With a substantial profit per animal, a family could make a living from a relatively small unit, but with low profit per animal, such units would no longer generate enough income to support a family; hence, producers would be forced to expand or find other employment. Based on data on United States pig production presented in Annex Table 3, we can calculate that, in the 1970s, a family-run unit with 120 sows and an annual production of 2 000 pigs would, on average, generate an annual profit of about US$42 000 - a good income for a family at the time. In the 1990s, the profit from such a unit would have been only about US$8 000 - more a hobby than a family income, and in bad years a hobby that few could afford. In fact, taking inflation into account, a family with a 120-sow herd in the 1970s would have required a herd roughly ten times larger in the 1990s to produce a profit with similar purchasing power.

Low and fluctuating profit would also force producers to change their production systems so as to reduce losses and other costs. The shift to confinement, although it would have involved higher capital expenditure, was a way to reduce operating costs. Confinement systems reduced labour costs by automating routine tasks. They probably reduced feed costs as well, especially by keeping animals warm in cold weather. Confinement also helped to reduce some of the traditional losses resulting from disease: the cage for laying hens was, in part, a way of separating birds from pathogens in soil and excreta, and enclosed barns allowed producers to prevent the introduction of diseases. Confinement also prevented deaths (especially of young animals) caused by predators and harsh weather. Given the costs that confinement helped offset, periods of low profits could have provided a strong incentive to adopt confinement methods, at least in industrialized countries where labour costs were high and the capital required to build confinement units was available.

In some cases, low and fluctuating profits may also have encouraged the integration of farm production into some form of corporate structure. Linking numerous farms in a company that also produced feed and processed meat presumably helped to achieve economies of scale. Perhaps more importantly, with near-zero profit at the farm gate, profit might still be made at other points in the production process; hence, producing chickens within a corporate structure probably remained profitable even when independent chicken farms were not. However, whereas expansion was virtually a necessity if a farm was to support a family, corporatization was an option that was followed only in certain cases.

In addition to the "macro-level" shifts to confinement and larger farm size, low profits would also have had important "micro-level" effects on variables that have an indisputable influence on animal welfare. With adequate profit per animal, producers could afford to provide animals with space and bedding at levels that would promote comfort even if they were not cost-effective; at low profit levels, these amenities would need to be severely constrained. With adequate profit per animal, producers could spend time caring for individuals, attending births and treating the sick; with lower profits, staff time per animal would need to be cut to levels that were strictly cost-effective. Thus, the economic climate that encouraged large farm size and confinement housing must also have led to cost-cutting in amenities that are important for animal welfare.

In summary, this alternative hypothesis proposes that developments in the twentieth century, notably in transportation and food preservation methods, allowed a greatly expanded trade in animal products and consolidation of the food processing industry; that the resulting increase in competition caused periods when producers received very low profit per animal; and that these periods of low profit were a major factor contributing to the shift towards larger units and confinement housing, and also necessitated cost-cutting in factors such as space, staff time and other amenities. As a corollary to the hypothesis, whether or not the larger units, confinement housing and sometimes corporate ownership had major influences on animal welfare, the cost-cutting in basic amenities certainly did.

The alternative hypothesis just described is, of course, greatly oversimplified. Undoubtedly there were other pressures involved in the intensification of animal production. Sheer scarcity of labour was likely to have been a factor: as workers were drawn by employment opportunities in more mechanized sectors of the economy, automation may have been seen as a way to keep farm labour requirements within the capability of the individual or family. Culturally, it must have seemed "modern" and "progressive" in the 1950s and 1960s to use hardware to automate repetitive manual tasks. It is probable that the availability of antibiotics, which could be delivered pre-emptively by controlled feeding systems, allowed stocking densities that would otherwise have been impossible. Moreover, as a matter of policy, some governments encouraged larger, more mechanized units as a way of producing cheap food and improving the lot of low-income farmers (Thompson, 2001). Thus, there was almost certainly a combination of demographic, cultural, technological and governmental factors that contributed to intensification.

Nonetheless, as a simple, first-order approximation, the alternative hypothesis appears to make a better fit to available information than does the Standard Critique. It also leads us to quite a different understanding of the link between intensification and animal welfare. In terms of production methods, it emphasizes not the macro-level features of increased farm size and use of confinement systems, whose influence on animal welfare is arguably mixed, but the micro-level features, specifically the costcutting required of producers at the same time that animal production intensified. In terms of economics, it suggests that the problem has not been excessive profit-taking by large corporations, but low and unpredictable profits and the constraints these place on producers. In terms of values and ethics, it suggests that the key problem is not the erosion of animal care values by producers as much as the values of consumers, expressed through their purchasing habits, which leave producers little room for discretion in applying the animal care values that they may hold.

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