FAWC Report On Farm Welfare: Effectiveness Of Labelling

By the Farm Animal Welfare Council - This article is part of a report on labelling in relation to the welfare provenance of livestock products. This Report concentrates on the purpose and nature of labelling and its justification, whether such labelling should be voluntary or mandatory, and how best to convey relevant information.

2 June 2006

16 minute read

FAWC Report On Farm Welfare - By the Farm Animal Welfare Council - This article is part three of a report on labelling in relation to the welfare provenance of livestock products. This Report concentrates on the purpose and nature of labelling and its justification, whether such labelling should be voluntary or mandatory, and how best to convey relevant information.

PART IV: EFFECTIVENESS OF LABELLING

The EU already has mandatory labelling systems for eggs under which EU table egg producers must label their production system. This has not been challenged by international trading partners as a trade restriction through the WTO. Labelling could be extended on a voluntary or mandatory basis to other animal products to support the EU’s animal welfare objectives. The labelling of meat and other farm animal products complying with the EU minimum standards for production is likely to have some positive effect on the level of animal welfare in the processes and production methods (PPMs) of exporting countries. The same would be true for a regulated (supervised) labelling scheme. Such a scheme would underline the importance of animal welfare and have the potential to raise standards.
The effectiveness of welfare labelling in improving farm animal welfare will depend on consumer responses to a new labelling system and consumer demand for livestock products that embody differentiated levels of animal welfare standards. There is limited information regarding this demand at present, although, for example, an increase in sales of non-cage eggs has been reported following their labelling, whilst research on consumer attitudes in the Eurobarometer study (June 2005) and the European Commission consultation (December 2005) suggests that many consumers in Great Britain would welcome a welfare assurance labelling scheme
The Agricultural Economics Research Institute in the Netherlands concluded that labelling of meat products that distinguish between those that do and do not meet EU standards may be a logical starting point. It is also thought that labelling would offer opportunities for like-minded Member States to undertake their own initiatives, while perhaps negotiating a common approach across the EU. However, it is noted that subsequent harmonisation of labelling initiatives across countries could be tedious. The issues identified by the Institute for further analysis include the possibilities of labelling different standards as well as mechanisms necessary for controlling standards in exporting countries.
Welfare labelling could be further reinforced, and its effectiveness enhanced, by the use of financial measures. The aim of these measures would be to provide incentives for livestock producers to achieve higher levels of animal welfare. The Agricultural Economics Research Institute of the Netherlands has considered the use of differentiated tariffs and/or taxes for imported products. For example, products produced below EU welfare standards might pay a higher tariff whilst those produced above EU standards might pay a lower one. A differentiated tax could similarly be implemented - perhaps levied at the retail stage on all products on the domestic market. Various systems of financial measures are possible as complementary to a (arguably, mandatory) regulated welfare labelling system.
There is the potential for payments to domestic producers to compensate them for the additional costs of producing to high welfare standards. In principle, these monies could be made available under the Rural Development Regulation and might be considered by the WTO as being minimally trade distorting (and hence classified as 'Green Box' payments). In its submission to the WTO in 2000 the EC suggested that it may be necessary to consider the legitimacy of providing some compensation to contribute to additional costs of production which stem directly from higher animal welfare standards.
Animal welfare as a “process and production method” (PPM)
PPMs are defined as the ways in which products or services are manufactured, produced and/or processed or the way in which natural resources are extracted or harvested.4 Measures which affect product characteristics (product-related PPMs), such as maximum residue levels for pesticides or veterinary medicines, labelling of nutritional content and hygiene codes in food handling are dealt with effectively under WTO rules.
In Switzerland eggs have not been produced in battery cages since 1992, given the requirement of the Swiss Welfare Act. The transition to alternative systems was galvanised by the actions of the two dominant retailers, who gave notice in 1987 to their domestic suppliers that they would not purchase eggs from caged systems from 1989. However, the retailers continued to import eggs from caged systems. In January 2000 the Swiss authorities introduced a clear mandatory labelling system for eggs to be identified as based on productrelated PPMs. The labelling scheme which requires imported eggs to be identified as “Produced in battery cages, which are not permitted in Switzerland” and was put in place to keep consumers aware of the difference between Swiss produced non-caged eggs and eggs imported from other countries which have been intensively reared. Since 1992 Swiss eggs have increased their market share of table eggs from 62 per cent to 74 per cent of the market, in the face of cheaper imported battery eggs. However, it is difficult to say if this increased market share can be directly related to the mandatory labelling scheme. The Swiss labelling scheme has not been disputed through the WTO. Animal welfare requirements on imports of animal products into the EU
Animal welfare standards in farm production are generally taken to be higher in the EU than in countries that export livestock products to the EU, particularly those in developing countries. However, there is little information to assess the extent to which these PPMs differ.
Recent research under the EU Welfare Quality Programme indicates that animal welfare standards of livestock products in EU supermarkets are at the minimum regulatory level because supermarkets are mostly involved in price competition and only some retailers compete specifically on welfare quality traits.
Currently, there are two types of voluntary labelling in place:
1. That characterised by the organic PPM standard where producers and wholesalers can choose to label their product but the process is not entirely voluntary or without government influence. The standards for organic production are set by EU regulations, but producers and their supply chain partners are responsible for organising a credible verification and certification process
2. Private initiatives to market fresh livestock products with both higher product quality and better animal welfare standards, where not only is labelling voluntary, but the producers and supply chain partners concerned also determine the standard.
Implementation of labelling
Two main ways of implementation were suggested by the Agricultural Economics Research Institute in the Netherlands:
1. Labelling could be introduced to allow consumers to identify whether or not livestock products meet EU standards. Such labelling could be regulated and supervised by government authorities but left as a voluntary decision for them. Alternatively, such labelling could be made mandatory, the objective being to distinguish products produced to EU standards from imported products produced to different standards. This labelling could potentially be combined with country-of-origin labelling, highlighting the difference in standards between producing countries.
2. Government authorities could instigate a system whereby a higher level of welfare standard would qualify for more ‘points’ on a label (a policy option proposed in the Netherlands). This would also cover the possibility of ‘positive’ labelling (i.e. an officially approved label that could be made available for products meeting the required standard), or ‘negative’ labelling (a separate label could be made available for products not meeting the standard). Such labelling could be mandatory; for example, all products not complying with the EU minimum standard could be required to bear the ‘negative’ label.
Even if the decision to label is left to retailers, the form of the labelling can be determined by the government to ensure the provision of transparent and consistent information to consumers. It is reasonable to expect that, if labelling is voluntary, retailers will choose to label at the standard they have achieved, in order to differentiate their product from those of an inferior standard. Then all livestock products would be labelled, with the probable exception of those produced to the lowest PPM standard (i.e. imported products not complying with the EU standard). Yet at the same time, it would be clear to consumers which PPM class the products fall into, meaning that, in practice, there may not be much difference between mandatory labelling and voluntary labelling to mandated standards.
What animal welfare information should be provided?
Information for individual consumers comes in a variety of ways. These include pointof- sale information, in-store information and out-of-store information. Point-of-sale information includes that which is physically attached to the product itself as a ‘label’. Information may be provided on an in-store board or display (often physically close to where the product is displayed) and in in-store information leaflets. Out-of-store information also includes leaflets, reports (e.g. available on request/sent by post to consumers’ homes) and advertisements, information held on accessible websites (e.g. provided by the retailer or assurance body) and information accessible by telephone through retailer customer services, farm assurance or other body. The Food Standards Agency (FSA) Clear Labelling Task Force identified three main areas of difficulty for the consumer regarding product information: (i) finding information, (ii) reading it, and (iii) understanding it.
There is currently a plethora of product labels to be found on products in food stores providing information including ingredients, nutritional attributes, geographical area of production, suitability for vegetarians and compliance with different standards (e.g. Red Tractor and other farm standards). A label clearly indicating the ‘animal welfare provenance’ of the product concerned would be in addition to these, providing the consumer with appropriate information concerning the welfare status of the animal used to produce the product. This information would need to be limited to relatively few words and/or symbols. Examples of this type of label include the RSPCA’s Freedom Food label denoting food produced from welfare systems according to RSPCA standards and those for organic produce (e.g. Soil Association). The former is the only known dedicated ‘animal welfare’ label currently used in the United Kingdom, although other labels may also be perceived by consumers to be associated with higher animal welfare (such as the labelling of products as ‘free range’). Some labels contain a grading associated with particular attributes such as the ‘traffic light’ (red = high, amber = medium and green = low) proposed by the FSA for nutritional/healthy eating information. In the context of animal welfare, it might also be possible to apply such a graded system. We consider that the arguments for and against a graded labelling system supported by both in-store and additional out-of-store information should be explored further.
Labels may also contain signposting information indicating where the consumer can get more information about particular aspects of the product and its production. For example, this might direct the consumer to a customer helpline or information line, a website or other sources of further information and advice.
It is clear that the precise nature of the information provided to consumers concerning the animal welfare provenance of the products that they purchase requires further research and consultation. Indeed, as part of the EU-funded Welfare Quality research programme, research is being undertaken concerning consumer, producer and retailer attitudes to welfare labelling.
Ideally a system of labelling should be based on welfare outcomes (i.e. the measurable welfare status of the animals involved in producing the product) and not solely on other indicators such as production system (as currently used as an indicator of welfare in the case of the labelling of hens’ eggs). In practice, inputs are more easily verifiable in audits. The two areas, inputs and outcomes, should be co-related as each should inform the other; indeed, inputs should translate directly into welfare outcomes otherwise their value as welfare standards becomes questionable. Practicalities (e.g. the cost of repeated inspections) may dictate that indicators such as the production system are in fact used but this practice should be seen as providing proxy information.
There is a strong argument for a form of labelling of animal-based food products which conveys an effective message about the welfare standards to which they are produced (including on farm, in transport, at market and at the point of slaughter). It is worth noting that most national farm assurance schemes meet the assurance requirements from birth to slaughter. However, Eurepgap, which represents a global partnership between retailers, processors and producers provides assurance of local standards largely at farm level. Welfare standards that apply over the lifetime of the animal become an integral part of the livestock product and should be conveyed clearly and concisely to the consumer. Such information should be available for all livestock products whether domestically produced or imported, whether fresh or processed.
Voluntary or mandatory labelling
The issue of voluntary or mandatory labelling is an important one. FAWC would like to see the animal welfare provenance of all livestock products clearly labelled (ideally on the products themselves), since this is likely to result in the greatest positive impact on farm animal welfare. Voluntary labelling would leave individual producers or producer groups to decide whether they use the welfare labelling system outlined above and label their products accordingly. In contrast, mandatory labelling would require all products sold within a country (including imports) to be labelled according to the adopted system. This would require agreement at EU level (the European Commission is currently considering the issue of animal welfare labelling). However, without agreement also at the wider international level (for example through OIE), a mandatory labelling system that includes imports may be challenged through WTO as a non-tariff barrier to international trade.
It is worth noting that the egg labelling scheme that divided production methods in presumed welfare outcomes, i.e. caged, barn or free range, was originally voluntary (in 1995), but after only a short time it was widely adopted by the industry and became mandatory within the EU in 2002. This shows that welfare labelling can be adopted relatively quickly given the right circumstances and these may, at present, be being provided by the proposed EU Animal Welfare Action Plan. The other interesting point is that the mere fact of labelling the eggs became itself a way of providing information to the public about welfare concerns. Perhaps this contributed to the scheme changing from being voluntary to mandatory?
Appendix 1 to this report provides a summary of the EU Eco-labelling (the flower symbol) which is a voluntary scheme launched in 1992 to establish a recognisable environmental label across all countries in the EU. Its aims are to promote the design, production, marketing and use of products which have a reduced environmental impact during their entire life cycle and to provide consumers with better information to give them the ability to recognise and choose products which have been made with consideration of the environment. The Eco-labelling criteria are determined on the basis of life cycle assessment of the product group and have been agreed by the member states. These criteria are intended to allow up to 30% of the current market share to qualify for the Eco-label. The International Standards Organisation (ISO) has developed a classification system for environmental labels and claims.
The EU Eco-labelling scheme provides an interesting precedent of a scheme which is voluntary in terms of take up but where the administration of the scheme is compulsory in all EU member states. It recognises that the widely used term “environmentally friendly” has no real meaning unless it is linked to a labelling scheme which has coherence across the member states and has independent third party verification. The parallel situation with the term “welfare friendly” and the lack of an equivalent EU-wide scheme which is designed to promote the production and consumption of livestock products produced to a given welfare standard makes this lack a notable omission.
We are particularly pleased, therefore, that the EU Commission has addressed this gap in the EU Action Plan adopted in January 2006 (see Appendix 2). An EU label devoted to animal welfare would effectively raise the welfare profile across the EU and beyond; provide a basis for distinguishing between basic mandatory welfare standards and higher standards; provide consumers with livestock products which clearly identify their welfare status; and provide a possible basis for compensating EU producers for costs incurred on higher welfare production systems.
Thus, in the short term FAWC recommends that a voluntary welfare labelling system is initially adopted whilst discussion both within the EU and with the wider international community continues. Moreover, initially, a welfare labelling system may prove difficult to apply to processed products where only a small proportion of the ingredients are of animal origin. There may be a similar difficulty applied to livestock products used in catering.
The implementation of a labelling system in a complex range of husbandry systems, as well as the great variety of meat products (such as pies, sausages, ready-to-eat meals), is complicated and may require a staged approach. It may be easier, in the first instance, to label whole carcases (poultry, fish) and certain meat cuts (pork, lamb and beef). Sometime later other processed products that contain meat and other livestock products can follow. We recognise that there will be difficulties in labelling certain processed products on animal welfare grounds (e.g. those products that contain a large number of different ingredients, some in very small amounts) but decisions about such issues as threshold levels for welfare labelling are not different in principle from the same issues in relation to, for example, vegetarian and non - GM foods. In any event there is likely to be a need for some lead-in time for producers and processors.
Potentially, a voluntary system of welfare labelling could be effective in: (i) increasing consumer information and choice; (ii) enabling producers to differentiate their product and gain a price premium; and (iii) improve the welfare of farm animals. This would be particularly true if welfare labelling was incorporated into farm assurance schemes and if major food retailers decided to require welfare labelling as part of their customer assurance. For example, it could be that some retailers might decide to only sell ‘higher’ welfare livestock products, such as those products currently recognised by the Freedom Food labelling scheme. There is even the argument that some retailers might, rather than employing specific labelling of products, be able to attract customers convinced that they were sufficiently trustworthy and that their products were of the highest animal welfare standard on the basis of their name alone.
The costs of labelling and of supplying information to consumers
The main costs associated with the above are likely to relate to the administration of the accreditation system, including the cost of animal welfare inspection and assessment. We accept that these costs may well not be trivial but it may be that some of these costs can be reduced by shared activities with other accreditation and assurance bodies. The costs of labels and supply of information through leaflets etc. incur the usual costs associated with product marketing. It is important that an accreditation system be devised with costs that do not prohibit adoption of the welfare-labelling scheme by producers and retailers. Having a national or EU mandatory labelling system could increase the costs of domestic/EU products, but those products may then be able to command a price premium.