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"The EU Legislators did not fully consider what impacts the banning of conventional cages would have on the future development of egg production and the resulting egg deficit." With this quote of Professor Hans Windhorst underlined in an interview with Terry Evans (ThePoultrySite, 2009) what he had predicted during his presentation at the ISAH meeting in St. Malo, France in 2004. Given the ongoing discussions on cage systems in othe parts of the word, Professor Windhorst expert opinion (although expressed in 2009) is still extremely interesting. He pointed out that the switch from conventional cages to enriched cages, floor management or free-range systems would inevitably lead to higher production costs. Economists at Wageningen University in the Netherlands have shown that production costs in enriched cages would increase by some eight per cent over those of conventional cages. In the German small colony system, the extra costs would be of the order of 10 per cent, while switching to the barn system in the Netherlands would result in costs rising by 21 per cent. "On the cost of switching away from conventional cages, an investment as high as €6.1 billion would be required. In Germany alone, some €612 million would be needed to meet the existing legal regulations by the end of 2009." He believes that it is not realistic to assume that this capital would be available under present financial and economic conditions, and he wonders how the EU would react when the member countries failed to fulfil the requirements of the Directive. He observed that it was obvious that legislators in the EU as well as at the country level in Germany did not fully consider what impacts the banning of conventional cages would have on the future development of egg production and the resulting egg deficit. Because German retailers would not stock eggs from the small colony system, large egg producers in that country realised that they would not be able to switch to floor management systems by the end of 2009. This would result in "Financial losses for production companies, higher consumer prices and increasing imports of shell eggs and egg products," Professor Windhorst concluded in his interview with ThePoultrySite in 2009.
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ISPA
The impacts of the new EU directivefor laying hen husbandry on theproduction and trade patterns
for eggs and egg products
Hans-W. Windhorst
Institute of Spatial Analysis and PlanningIn Areas of Intensive Agriculture (ISPA)
University of Vechta, Germany
Congress of the International Society of Animal HygieneSt. Malo, October 11th, 2004
ISPA
Agenda
• Introduction
• The setting: Regional patterns of egg production and egg trade
• The new EU and German directives for laying hen husbandry
• Impacts on egg production and egg trade
• Discussion: Further challenges for the egg and egg products industries
ISPA
Introduction
• The EU directive 1999/74/EC will have far reaching impacts on egg production and egg trade not only in Europe but world-wide. Conventional cages will be banned from 2012 on, enriched cages have to be installed from 2003 on.
• The German directive, passed by the Bundesrat in October 2001 is even more strict. It prohibits conven- tional cages from 2007 on and enriched cages from 2012 on. Even though the Bundesrat changed its decision in November 2003, this decision has not become effective as the Secretary of Consumer Protection, Nutrition and Agriculture has not yet signed the directive.
ISPA
The setting:Regional Patterns of egg production
and egg trade
ISPA
The development of global egg production between1990 und 2003, data in 1,000 t
Region 1990 2003 Change (%)________________________________________________Africa 1,550 2,082 + 34.3N. a. C. America 5,698 7,951 + 39.5S. America 2,233 2,951 + 29.9Asia 14,507 32,927 + 127.0Europe 11,125 9,886 - 11.1Oceania 244 195 - 20.1________________________________________________World 35,208 55,992 + 59.0
FAO
ISPA
The ten leading countries in egg production in1990 and 2003, in % of the global production
1990 2003________________________________________________China 18.6 China 40.1USA 11.3 USA 9.2USSR 7.5 Japan 4.5Japan 6.9 India 3.9India 3.6 Russia 3.7Brazil 3.5 Mexico 3.4Mexico 2.9 Brazil 2.8Germany 2.8 France 1.8Ukraine 2.7 Germany 1.6France 2.5 Un. Kingd. 1.3_________________________________________________Total 62.3 Total 72.2FAO
ISPA
The development of egg production in selected EUmember states between 1990 und 2003, data in 1,000 t
Country 1990 2003 Change (%)_________________________________________________Portugal 79.6 108.5 + 36.3Belgium/Lux. 159.2 180.0 + 13.1France 886.8 1.000.0 + 12.8Ireland 31.1 34.0 + 9.3Spain 666.6 700.0 + 5.0Finland 76.4 53.0 - 30.6Sweden 129.8 93.9 - 27.7Germany 985.0 880.0 - 10.7_________________________________________________EU 5.234.8 5.368.9 + 2.9
FAO
ISPA
The regional pattern of the global trade withshell eggs, data in %
Region Exports Imports__________________________________________Africa 1.9 4.0N. a. C. America 7.1 7.1S. America 1.5 0.7Asia 25.9 22.4Europe 63.5 65.7Oceania 0.1 0.1__________________________________________Welt 100.0 100.0
FAO
ISPA
The ten leading export and import countries for shelleggs in 2002, data in 1,000 t
Country Exports Country Imports________________________________________________Netherlands 264.6 Germany 257.8Malaysia 115.2 China 82.0Belgium 86.2 Italy 62.8China 83.9 Netherlands 61.4Germany 68.5 Un. Kind. 45.7Spain 61.1 Canada 34.2USA 60.9 Belgium 32.4France 43.3 Singapore 26.5Belarus 30.8 Switzerland 25.5Iran 18.6 Austria 14.7_________________________________________________% of global exp. 82.8 % of global imp. 71.0FAO
ISPA
The development of Germany´s shell egg imports between 1992 and 2003, data in mill. pieces
Exporting 1992 2003 Change (%)Country___________________________________________
Netherlands 3,936 2,782 - 29.3Spain 22 355 + 1,513.6France 80 211 + 163.8Belgium 280 209 - 25.4___________________________________________EU total 4,367 3,781 - 13.4___________________________________________Total 4,432 4,006 - 9.6
ZMP
ISPA
The development of Dutch shell egg exports between 1992 and 2003, data in mill. pieces
Importing 1992 2003 Change (%)Country___________________________________________
Germany 3,831 2,544 - 33.6Belgium 785 171 - 78.2Un. Kingd. 172 124 - 27.9___________________________________________EU total 5,216 2,986 - 42.8___________________________________________Non-EU 877 322 - 63.3___________________________________________Total 6,093 3,308 - 45.7
ZMP
ISPA
The new EU and Germandirectives for laying hen husbandry
ISPA
Directive 1999/74/EU______________________________________________
Conventional cages:
• from January 1st 2003 on: minimum usable space 550 cm2 for each hen
• trough length: 10 cm per hen
• no longer permitted after December 31st, 2011
• must no longer be installed from January 1st, 2003 on
ISPA
Directive 1999/74/EU______________________________________________
Enriched cages:
• from January 1st 2003 on: 750 cm2 per hen, minimum usable space 600 cm2 for each hen
• no cage must be smaller than 2,000 cm2
• trough length: 12 cm per hen
• cages must have a nest, perches (15 cm resting space per hen), and a sand-bath (scratching area)
• have to be installed from January 1st, 2003 on in new poultry houses
ISPA
The new German directive for laying hen husbandry:______________________________________________
• From January 1st, 2003 on no cages may be installed, neither conventional nor enriched cages.
• From January 1st, 2007 on conventional cages and from January 1st, 2012 on enriched cages will be prohibited in Germany.
• From January 1st, 2003 on new facilities for laying hens have to be at least 2 m high and have to have a basic area of at least 2 m x 1.5 m.
• A single flock must not be larger than 6,000 hens.
ISPA
Impacts on egg production and egg trade
ISPA
Impacts of the EU directive (1999/74/EU):___________________________________________________• Egg production in the EU will decrease by about 11 billion pieces.
• The rate of self-sufficiency will decrease from 103 % in 1999 to 96 % in 2012 (the impacts of the German directive are not included).
• The EU will become a net importing region for shell eggs.
• About 5 to 6 bill. € will be necessary until 2012 to fulfil the regulations of the directive.
• About 12,300 jobs will be lost.
Wolffram et al. 2002
ISPA
Impacts of the new German directive:______________________________________________Structure of laying hen husbandry in Germany in 2002______________________________________________
Number of laying hens: 40.8 mill.In conventional cages: 83.9 %
Laying rate: 285 eggsFree range: 8.6 %
Laying rate: 250 eggsFloor management: 6.6 %
Laying rate: 260 eggsOther systems: 0.8 %
Laying rate: 240 eggsEgg production: 11.4 billion eggsImports for human consumption: 4.1 bill. eggs
ISPA
Scenario 1: EU directive (1999/74/EC) becomes effective________________________________________________
Reduction of the laying hen flock from 40.8 mill. to 35.7 mill. birds or by 13 %.
Reduction of egg production from 11.4 to 9.9 bill. eggs.
Decrease of the value of primary production by 200 mill. € and in associated industries by 100 mill. €.
Loss of 666 jobs.
Additional imports of 1.5 bill. eggs (total: 5.6 bill.).
ISPA
Scenario 2: Banning of conventional cages (2007)________________________________________________
Reduction of the laying hen flock from 35.7 mill. to 19.6 mill. birds or by 45.1 %.
Reduction of egg production from 9.9 to 5.0 bill. eggs.
Decrease of the value of primary production by another500 mill. € and in associated industries by 400 mill. €.
Loss of another 3,200 jobs.
Additional imports of another 4.9 bill. eggs (total: 10.5 bill.).
ISPA
Scenario 3: Enriched cages will be permitted in Germany________________________________________________
Reduction of the laying hen flock from 35.7 mill. to 28.9 mill. birds or by 19 %.
Reduction of egg production from 9.9 to 7.9. bill eggs.
Decrease of the value of primary production by 200 mill. € and in associated industries by 200 mill. €.
Loss of 1,700 jobs.
Additional imports of 1.9 bill. eggs (total: 7.5 bill.).
Necessary investments: 820 mill. €.
ISPA
An open future:_____________________________________________
• If the Secretary of Consumer Protection, Nutrition and Agriculture will not sign the altered directive of November 2003, conventional cages will be banned in 2007 and enriched in 2012.• It is still an open question if the German Supreme Court will open the court proceedings that have to decide about compensation payments.• A critical economic situation is expected for the poultry equipment suppliers and especially for egg producers in eastern Germany which installed new cages after reunification in 1990.
ISPA
Discussion:Further challenges for the
egg and egg products industries
ISPA
Further challenges:_____________________________________________
• Globalisation of the markets for agricultural products
• Product safety and quality assurance will become the leading driving forces in the future development of the markets for animal products and lead to the implementation of supply chains.
• Aspects of animal welfare and environmental protection will gain in importance.
• Biotechnology and gene-technology will open new ways in food design.
ISPA
Conclusion
ISPA
The problem of „cognitive dissonance“ and some open questions:_________________________________________________• A majority of consumers dislike conventional cages in egg production, nevertheless more than 80 % of all eggs consumed in the EU stem from such farms.
• Could it be that without legal regulations there would still be conventional cages in future because of the lower price of the eggs?
• From their dislike of cages consumers often conclude that eggs from such systems are an unsafe product.
• Could it be that the industry has not been able so far to transmit the message that the opposite is the case?
ISPA
Thank you for your attention!
