Food & Power: Who Will Pay for Perdue’s New Animal Welfare Standards?

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Perdue Says It Plans to Treat Its Chickens Better. But Who Will Pay?

Perdue, one of the four biggest chicken companies in the U.S., last week announced plans to improve quality of life for their chickens and to kill them more humanely. Although the plans have largely been seen as a step forward in animal welfare, three big questions remain: how much will it cost to meet these new standards, who will foot the bill, and when exactly will the reforms happen?

Groups like the Humane Society of the United States have long pushed poultry companies to treat their chickens better, but for years there was little movement. Then in December 2014, Perdue farmer Craig Watts filmed a video with Compassion in World Farming highlighting the poor conditions in which his chickens were forced to live. In the video, chickens weighed down by enormous breasts staggered about a crowded barn amidst droppings, ammonia, and dust. Many had large sores on their undersides from sitting on the dirty barn floor for extended periods of time.

The following year, Perdue began talks with Compassion and other organizations about how the company could improve its animal welfare standards. The new standards, issued June 27, are based on the Five Freedoms, a European animal welfare standard. They include a transition to a more humane slaughter method, and “enrichments” to chicken houses like windows and places to peck, perch, and nest.

But how these reforms will be paid for is still unclear. In most of the U.S. market, it is not the giant slaughterhouse company that covers the costs of these transitions, but rather the farmers who raise the chickens. As we have reported, chicken farmers often have to borrow millions of dollars to outfit their chicken houses. The upgrades that Perdue has promised could therefore fall on the farmer’s side of the ledger.

A study of the elimination of cage housing for egg-laying hens in California found that the cost of non-cage housing could be as high as $40 per bird. That means a single building, housing 30,000 hens, could cost $1.2 million. While animal housing does depreciate in value over the course of up to 20 years, farmers forced to transition their infrastructure too soon could be taking on an unexpected and enormous investment.

The changes Perdue announced are less dramatic than those in the California study. The company said it plans to retrofit 200 chicken houses with windows, about 3% to 4% of the company’s houses. “The intent is to learn from these 200 and then, assuming it plays out as we anticipate, we would then go back and retrofit other existing houses,” company spokeswoman Julie DeYoung says.

But Perdue also mandated that all newly constructed chicken houses have windows, and did not explain who will cover these additional costs. Also unclear is how farmers will be incentivized and rewarded for providing the “enrichments” that meet the new animal welfare standards.

Patty Lovera, assistant director of Food & Water Watch, is concerned that animal welfare could become another metric by which farmers could be punished within the “tournament system” that Perdue and other poultry giants use to determine what they pay farmers for their chickens. In the tournament, farmers are pitted against groups of their neighbors and measured according to certain metrics. Farmers often have little control over those metrics, which are affected by the health of company-provided chicks and environmental conditions.

“In a contract arrangement, anything that’s subjective becomes something that can be used against [a farmer],” Lovera says. And animal welfare, without clear guidelines and timelines, could become just such a subjective measure.

“The policy isn’t perfect,” says Josh Balk, director of food policy at the Humane Society of the United States, who participated in negotiating the standards with Perdue. “There isn’t a timeline yet” for implementing the policy, he points out. “And we feel strongly that in order to have a strong policy that consumers can trust, there has to be a timeline.”

What We’re Reading

· The South African Competition Tribunal conditionally approved the $104 billion takeover of SABMiller by Anheuser-Busch InBev on June 30. An EU anti-trust investigation is still pending.

· The Senate voted for cloture on a GMO labeling bill on Wednesday, scheduling a vote on the bill for late Thursday. The bill would undermine a Vermont state law that went into effect last Friday, which requires GMO labeling on all food products.

· The National Pork Producers Council urged its members to submit testimony opposing the Department of Agriculture’s newly proposed organic animal welfare standards. NPPC claims that the proposed standards would create barriers for current and new organic livestock farmers in addition to posing risks to both human and animal health.

· Last week, the National Farmers’ Union passed resolutions calling for government action to address the farm income drop, consolidation of the agricultural inputs sector, and low commodity prices among other issues in the farm economy. The group is seeking more robust antitrust enforcement and legislation by the Justice Department and Congress.

Chris Wager contributed research to this newsletter.

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