Socio-economic Implications of Banning Conventional Farrowing Crates in EU Pig Farming: A CAPRI-based Scenario Analysis

Potori, Norbert and Himics, Mihaly and Witzke, Peter and Szabó, Zsolt and Savoly, Janos and Egri, Edit (2023) Socio-economic Implications of Banning Conventional Farrowing Crates in EU Pig Farming: A CAPRI-based Scenario Analysis. STUDIES IN AGRICULTURAL ECONOMICS, 125 (3). pp. 136-142. ISSN 1418-2106

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Abstract

This paper presents an analysis of the potential socio-economic implications of the European Commission’s policy initiative to ban the use of cages in EU livestock farming, with a specific focus on conventional farrowing crates in the pig sector. Using the CAPRI (Common Agricultural Policy Regionalised Impact) tool, a multi-purpose comparative-static partial equilibrium modelling framework, the study examines two scenarios: an immediate phase-out of conventional farrowing crates by 2025 and a 10-year transition period until 2035. The simulation results indicate that the ban would lead to a significant decline in pork production in the EU, with production decreasing by 23.6% in the immediate phase-out scenario and by 8.4% in the 10-year transition scenario. The decline in production affects domestic demand and weakens the EU’s net trade position. However, the ban would also result in an increase in consumer prices and producer prices for pork, partly moderating the decline in profits for the pig sector. Moreover, the study highlights the interconnectedness of agricultural policies and the importance of a global assessment of their impact on greenhouse gas (GHG) emissions. The simultaneous decline in EU pork exports and increase in EU pork imports trigger emission leakage: while GHG emissions from EU pork production are significantly reduced, the Global Warming Potential (GWP) of non-EU pork production increases by 4.2%. We find that the length of the transition period fundamentally defines the potential economic effects on the EU pig industry, the impacts on trade balance, and on global environmental effects. This finding emphasises that the implementation details of policy initiatives must be carefully designed to address both domestic and foreign challenges arising from the sustainable transformation of livestock farming practices in the EU.

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