Do We Need State Intervention in the Meat Market?

Economists Favor Stronger State Controls in the Meat Industry

Among the labor market policy measures in the meat industry, economists see the greatest need for action in state controls (69 percent). These should be strengthened to better enforce existing legislation. This is followed by regulation of subcontractors, higher minimum standards for worker accommodation, higher minimum standards for occupational health and safety, and better medical supervision and care for workers: around half of the economists favor each of these. Mandatory digital time recording is favored by 30 percent of economists. Only one-quarter are in favor of a ban on fixed-term contracts. Economists tend not to support calls for a higher minimum wage in the meat industry (just 12 percent do). In addition to these measures, they mention stricter regulation and increasing subcontractors’ liability. They also point out that a combination of measures is necessary. Only 3 percent of the participating economists do not want to see any labor market policy measures in the meat industry.

Economists are divided regarding uniform European regulations on working conditions in the meat industry; 38 percent of the participating economists reject uniform European regulation, arguing that production conditions and preferences differ between member states, that it would distort competition, and that there is no authority for such action at the European level. On the other hand, 36 percent of economists are in favor of uniform European regulation, as this would prevent undercutting and the associated negative consequences for animal welfare, workers, and the environment. Meanwhile, 19 percent of respondents were “undecided,” calling for minimum standards while retaining certain locational advantages for low-wage countries.

Improved Minimum Standards and Stricter Controls for Animal Welfare

Economists believe stricter controls on existing minimum standards for animal production and tougher penalties for violations are a good way to promote animal welfare, with each measure winning about 80 percent of the panel’s support, while 42 percent favor the publication of gross violations of animal welfare standards by individual companies (“name & shame”). An animal welfare tax, as called for by the Borchert Commission, is supported by 19 percent of economists, and the same number favor information and training campaigns for animal owners. Only 15 percent of economists support the introduction of a voluntary state label for animal welfare in livestock farming. The participating economists show no support either for additional animal welfare support premiums or for the much-discussed ban on price advertising for meat products. Another animal welfare measure they do mention is a maximum distance for the transportation of live animals for slaughter and thus the regionalization of slaughter. Finally, 4 percent of participants want no animal welfare measures.

Economists Favor Integration of the Meat Industry into European CO₂ Certificate Trading

To take account of the meat industry’s potential effects on the environment and the climate, 56 percent of economists call for it to be integrated into European CO₂ certificate trading. A carbon tax on meat products (50 percent) as well as prohibitions and restrictions on livestock farming (42 percent) rank second and third among the most frequently requested measures. Meanwhile, 32 percent of economists support consumer information on the link between meat consumption and climate change. Only 4 percent of economists want to see requirements and prohibitions placed on meat consumption, while 12 percent reject environmental and climate protection measures.

Most Economists Support a Reduction in EU Subsidies for the Meat Industry

When it comes to current EU subsidies for the meat industry, 59 percent of economists want them to be reduced, since such subsidies keep the price of meat artificially low and lead to market distortions. Respondents pointed out that subsidies in the agricultural sector are generally too high. Meanwhile, 9 percent of economists do not want to see reforms to EU subsidies for the meat industry, one reason being to avoid dependency on imports in the event of a crisis. Only 1 percent of economists advocate increased subsidies.

Of the participating economists, 20 percent are in favor of increasing subsidies for the organic meat industry in order to compensate for the additional costs of stricter regulations and to support efforts to make agriculture more animal- and eco-friendly. One-quarter call for a reduction in subsidies on the basis that there is generally no reason for subsidies in the meat industry and because subsidies in principle lead to market distortions. Meanwhile, 16 percent do not want any changes to current subsidies for the organic meat industry. Almost 40 percent of the economists answered “Don’t know” – a clear indication of uncertainty as to what constitutes correct subsidy policy.