Financing the transition to cage-free farming in the EU

Document type: report published by the Institute for European Environmental Policy (IEEP)

Authors: Godfroy, A., Muro, M., Nadeu, E., Wedl, I., Jadzisnka, J.

Preview: […] This report provides a comprehensive and up-to-date assessment of how to finance the EU-wide transition to cage free systems, drawing on scientific evidence, EU policy analysis, national case studies (France, Germany, Poland and Spain), and interviews with sector experts.

Key learnings

1. Legislative certainty unlocks investment
   Uncertainty about EU legislation is the single biggest barrier to farmer investment. Countries with clear legal timelines (e.g., Germany on hens and sows) show faster and more confident transitions.

2. Upfront investment is the binding constraint
   Upfront investment is the binding constraint
   Structural housing changes, e.g. for retrofits, new barns, land reconfiguration, represent the largest financial hurdle across all species. Access to capital remains limited.

3. Transitions differ substantially between species
   Laying hens: mature alternatives but higher running costs (+22% barn/aviary; +34% free range).
   Pigs: well-designed free farrowing can match performance but requires significant investment.
   Rabbits: need further technical optimisation for breeding does.
   Calves: collective housing feasible with minimal long-term cost impact.

4. CAP funding currently rewards maintenance over transformation
   Only a handful of schemes directly support the phasing out of cages; most payments go to farms already compliant.

5. Demand-side measures are powerful but underused
   Retailer commitments have driven major progress in Germany and Poland, but mandatory labelling for processed products is still absent, limiting consumer impact.

Key Recommendations

For the EU
– Adopt the revised animal‑welfare legislation swiftly, with species‑specific transition periods and accompanying technical guidance.
– Clarify rules for transitional State Aid so Member States can support structural investments linked to future legal requirements.
– Strengthen demand‑side tools, especially harmonised EU animal‑welfare labelling (including processed products).
– Ensure trade policy prevents unfair competition from low‑welfare imports.

For Member States
– Develop species‑specific transition plans that include financing packages, advisory services, and training.
– Prioritise animal‑welfare investments within CAP Strategic Plans and National/Regional Partnership Plans under the future CAP.
– Use the EIB agriculture and bioeconomy facility more strategically, ensuring intermediaries offer products that explicitly support better housing.

Financing the Transition to Cage-Free Farming in the EU (PDF report)