Agri 2022

Social external costs of food prices: Monetizing animal welfare and health impacts of food consumption

Seidel Felix

Seidel Felix, Speaker at Agriculture 2022
University of Augsburg, Germany
Title : Social external costs of food prices: Monetizing animal welfare and health impacts of food consumption

Abstract:

The aim of this study is to investigate grievances in the composition of food prices due to externalities along the entire supply chain. It first analyzes health costs incurred for human life and then explores external costs of animal suffering. In this context our goal is to identify and implement a way to measure and monetize these social external costs. Human health is a central pillar of external costs, in the first part of the work the health costs and all their indicators are analyzed and categorized. The results are used to develop a single general method to combine the DALY concept with economic costs to determine the price premium calculated on kcal of several food components. Our study bases on several independent datasets estimating occurring costs, due to specific disabilities and diseases, normed on German standards. In the second part of the study animal welfare as another tremendous impact area in the food system is accounted. Identifying the most relevant factors in livestock farming to monetize animal welfare, a framework to account the true costs of food including the externalities due to the animal suffering is generated. To ensure that all aspects of animal welfare are implemented in this method the framework bases on the five freedoms of animals (Webster, A. J. et al. 2001), which is the best possible way to measure animal suffering. In this context a wide range of several meat and dairy products of different production systems is assessed. Certain components of food have great influence on human health, for example sodium being the biggest driver of cardiovascular diseases. The present study shows that health costs of products containing great amounts of salt are huge. Salt contents above the recommended level of 5g/2300kcal (Afshin et al. 2013) cause social costs of 41 cents/g. Undernourishment turns out to have the biggest impact on human health, which means that healthier products such as whole grains, fruit and vegetables cause lower or even negative true costs due to their health benefits. Furthermore, our calculations on animal welfare show that meat products cause the greatest animal suffering and should be by at least 50 to 70 cents/kg more expensive, whereas dairy products should be raised by just a few cents per kg, due to the yield. Besides that, they are huge differences between the animals. Poultry turns out to be worse than pork, whereas beef is by far the most animal friendly livestock farming. Results indicate that an animal welfare tax would amount to a total 1-2 euros per person per week.

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