Farm Behaviour and Incentives for Animal Welfare: On Stimulating Interest in Cow Life Expectancy by Industry Attentiveness

This contribution deals primarily with a new concept derived from institutional eco­nomi­cs, to improve animal health (eventually welfare, depending on the use of synonyms and actually measu­red as cow life expectancy, i.e. in figures: number of lactations). Based on consumer willingness to pay, it investigates a potential collaboration between a dairy industry whose aim is to diversify products and some farmers whose intention is to request compensation for a change of practices. For fin­ding practical attributes for health, we have a focus on practices promoting numbers of lacta­tions, currently at a low level in conventional farming. We distinguish farm types by str­ategies ask­ing why most farms are primarily aiming at maximal efficiency (feeding concentrates for high milk yields and having no grazing). Vice versa: this has raised public concern because (with big herds, high milk yields and minimal lactations) farmers seem to stress ani­mal welfare. We assume WTP exists for an improvement in animal health (though diffuse so far). I.e. on the one hand as a symptom of crisis, successes for gestation are low (almost half compared to those of farms “caring” for animals). On the other hand better practice can be financed if targeted by WTP. Further assumptions are: even the industry may admit problems with animal health, and within consumers’ and citizens’ circles, there is an increasing awareness and that WTP (finance) may enable private solutions. WTP could be used for those farmers doing better on animal welfare; but so far, markets have failed. We are confronted with different strategic behaviour of farmers (by sectors) whose commencing points (as ob­servation and deliberation) must be a willingness to change practices. A starting point should be insight into beha­viour(al) change and willingness to increase animal health (gestation), yet based on compen­sation. Compensation can be used to get more farmers interested in animal health, but it must be differentiated according to actions for improvement. In an institutional economics analysis of animal welfare, we will work out a concept of optimal compensation, preferably achieving cooperation between a dairy industry and willing farmers to lodge payments received from consumers. It means working on participation of actors in product diversi­fica­tion (milk identified by different sources) and transfer of money to those farmers who are ac­tu­ally working for animal health concerns. The paper further addresses selection of far­ms which manage to achieve set health goals and assure confirmation of achievements in increa­sing health. The goal is to increase the number of lactations. By utilizing contracted numbers of lactations as the basis for modelling a qua­n­­titative criterion which adequately shall reflect aspects of working for animal health (such as feeding practices, grazing, better husbandry (space and straw), caring (stress recovery), etc., is worked out and animal welfare shall improve.