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The production of food from animals poses societal concern about the welfare of these animals in Western countries and increasingly also in economically developing countries. Animals and people may experience disutility from animal suffering, which can be seen as an external cost that is not (fully) included in the cost of production. Thus, consumers will consume too much of the good from an aggregate utilitarian perspective. A potential way to solve this issue is by including these external costs in the production costs. The aim of this paper was to provide a method that can be used to estimate the external costs of animal welfare (AW) of animals kept at farm level. The external costs were calculated by means of a cost function. This cost function shows the relationship between the AW score and costs of AW measures at farm level. The AW scores were calculated from principle scores of the Welfare Quality® Protocol. The method was applied to three case studies, namely dairy cattle production in Germany, pig production in the Netherlands, and broiler production in the Netherlands. The results indicate that the external costs of AW of dairy cattle systems ranged from 0.02 to 0.10 euro/kg milk, those of pig production systems from 1.00 to 1.36 euro/kg live weight and those of broiler production systems from 3.67 to 4.52 euro/kg live weight. The empirical application showed that the method was effective in estimating external animal costs. The insights obtained from the application of our method can support decision making in the development and adoption of more AW friendly production systems.

Intensive livestock production is associated with adverse effects on animal welfare (AW), the environment and human health, defined as negative externalities. These externalities have led to increasing calls for more sustainable livestock production, including more sustainable broiler production, by European Union citizens. The overall objective of this dissertation was to explore broiler production systems that address multiple externalities and are aligned with farmers’ preferences. A conceptual framework was developed to assess the implementation of standards in a context of multiple negative externalities resulting from meat production. The framework demonstrated that synergies between externalities enhance the economic feasibility of more stringent standards, whereas trade-offs hamper the economic feasibility of these standards. AW improvements in broiler production may yield a synergy on antibiotic use and do not necessarily yield a trade-off on ammonia (NH3) emissions. Most AW improvements caused a trade-off on particulate matter (PM10) emissions. The findings suggest that there is a scope for designing optimal broiler production systems by selecting system changes based on their impact on farm income, AW, NH3 and PM10 emissions. Different combinations of system changes were assessed in terms of their potential for enhancing AW and mitigating emissions of NH3 and PM10. The prevailing system in the Dutch broiler market was used as a baseline for evaluating these system changes. The results indicated that a considerable improvement in AW and considerable reductions in NH3 emissions (66-73%) and PM10 emissions (41-61%) can be achieved in this system at a limited increase in the producer price (5-19%). The best performing combinations of system changes included AW-enhancing practices, a NH3 abatement technique and a PM10 abatement technique. These combinations were also robust to changes in the relative importance society places in AW, PM10 emissions and NH3 emissions. Results of a discrete choice experiment indicated that farmers were in general reluctant to invest in PM10 abatement techniques. Farmers’ preferences for PM10 abatement techniques were critically determined by the attributes technique, exemption from future PM10 emission legislation and subsidy. A high heterogeneity in farmers’ preferences was observed, which could be explained by social factors (e.g. age of the farmer) and perceived obstacles for business development (e.g. location of the farm). Overall, this dissertation underlined that the development of new broiler production systems should focus on an integrated approach that takes the optimization of synergies trade-offs between externalities into account