Animal welfare payments and veterinary and insemination costs for dairy cows

Abstract

To promote the provision of animal-friendly housing and management exceeding the minimal legal standards, the Swiss government offers direct payments through two programs for several farm animal species. In dairy cows the BTS program pays for group housing systems with a comfortable lying area separated from the feeding area. The other program, the RAUS, requires that cows receive regular exercise in an outdoor run in the winter and a pasture during summer. The aim of the study was to analyze the relationship between the two Swiss direct payment programs and the veterinary and insemination costs for dairy cows. We used a large sample of more than 21,000 dairy farm observations from 2004 to 2014 obtained from the Swiss Farm Accountancy Data Network. A propensity score weighting was combined with a linear regression model to estimate the doubly robust treatment effects of the BTS and/or RAUS programs on dairying and breeding. Compared to the control group, that is, farms participating in neither program, farms in the RAUS tended to reduce their veterinary costs by 2% (CHF 4.71). Participation in both the BTS and RAUS programs resulted in a 10% cost reduction (CHF 19.32). An analysis of the effects of participation in both programs, with farms participating in only the RAUS as the control group, indicated a cost reduction of 7% for the farms participating in both programs (CHF 13.54). In contrast, participation in the RAUS only or in the RAUS and the BTS did not have a significant effect on insemination costs. The results thus indicate that the implementation of higher welfare standards can have a positive effect on the economic situation of a farm.