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(solution) What other public policy initiatives can the government employ to


 What other public policy initiatives can the government employ to address these concerns?
Discuss the pros and cons of these


Prices & Markets

 

Melbourne, Semester 2, 2016

 

ECON1020 ASSIGNMENT 2

 

Value: 35% of total course assessment.

 

Word limit: 1300 words, across all questions.

 

Assignment due date: 5 pm, 14th September 2016. Please be aware of RMIT?s penalties

 

for late submission, as they will apply to you.

 

Submission: This assignment must be submitted electronically via Blackboard. As it is

 

RMIT policy that all assignments be submitted electronically, hard copies or emailed copies

 

will not be accepted.

 

When submitting, please make sure you attach and upload your assignment as one file

 

preferable in .pdf format. You can also submit in .doc or .docx, but please do not

 

use .pages. Please do not paste as text or upload a folder or zipped file.

 

IMPORTANT: On the Blackboard system, you can only upload and submit the assignment

 

once. So, make sure you read and understand the student guide on How to submit your

 

assignment on Blackboard before you submit.

 

Marking: Marks will be awarded based on how well you: (a) understand the economic

 

theories and concepts from the lectures; (b) apply these to the question(s); (c) conduct

 

systematic economic analysis using these theories and concepts (this includes the use of

 

appropriate diagrams); and (d) draw conclusions, if appropriate. Note that general layman

 

discussions do not constitute sufficient economic analysis.

 

Presentation: Assignments should be typed, using 10 ? 12 sized font and 1.5 ? 2 line

 

spacing. Graphs and diagrams can be hand drawn and scanned in, but must be clearly

 

drawn and clearly labelled. Read the article Dairy farmers are being ?milked dry?, but let?s remember the real cost

 

of milk (The Conversation, 25/05/16) attached, about the animal welfare and environmental

 

concerns associated with dairy farming in Australia.

 

Then use economic analysis to answer the following questions. In your answers, ensure

 

that you use relevant economic theories, concepts and/or diagrams covered in this course.

 

Note that general layman or journalistic discussions do not constitute sufficient economic

 

analysis. 1 Question 1

 

The article calls for public policy initiatives to address animal welfare and environmental

 

concerns associated with dairy farming in Australia. With reference to economic concepts

 

covered in this course, explain why the government might want to intervene in the dairy

 

market.

 

(10 marks)

 

Question 2

 

A tax on dairy products is one public policy initiative that the government might consider.

 

Perform appropriate economic analysis to explain how such a tax could be used to address

 

the animal welfare and environmental concerns raised in the article. Discuss the pros and

 

cons of using such a tax as a policy initiative.

 

(10 marks)

 

Question 3

 

What other public policy initiatives can the government employ to address these concerns?

 

Discuss the pros and cons of these.

 

(10 marks)

 

Question 4

 

What can we as private individuals do to address these concerns in the absence of

 

government intervention? Are such private solutions likely to be effective?

 

(5 marks) 2 Dairy farmers are being ?milked dry?, but

 

let?s remember the real cost of milk

 

May 25, 2016 6.11am AEST

 

The dairy industry faces a number of welfare and environmental issues. Cow image from

 

www.shutterstock.com Gonzalo N Villanueva

 

PhD Candidate, School of Historical and Philosophical Studies, University of Melbourne The Conversation?s partners

 

View partners of The Conversation

 

The Australian dairy farming industry is in a state of crisis. Cheap dairy products and

 

?uctuations in both the domestic and global markets have taken a ?nancial toll on farmers.

 

Consumers have rallied to help struggling dairy producers.

 

But this is only half the problem. The true cost of dairy is also paid by dairy cows and the

 

environment. Welfare problems

 

Despite the idyllic image of outdoor farming, several industry practices negatively a?ect dairy

 

cows. To meet production demands, dairy cows are subject to a continuous cycle of

 

impregnation, induced calving and milking.

 

Tail-docking and horn removal are routinely performed without pain relief. Lameness is

 

another major animal welfare problem, often the result of environmental pressures, such as

 

tracks, herd size and handling. The average lifespan of a dairy cow is six to seven years,

 

whereas generally cows can live for 20 to 25 years.

 

One of the most controversial issues is young ?bobby? calves. A bobby calf is a newborn

 

calf, less than 30 days old, who has been purposely separated from their mother.

 

Immediately after separation, cow and calf call out and search for each other.

 

Most bobby calves are slaughtered within the ?rst week of their life. Handling and transport

 

pose added problems for young calves who have not developed herding behaviours, are

 

vulnerable to stress, and are forced to go without their mother?s milk. Each year, 450,000

 

bobby calves are slaughtered. Advocacy groups frequently uncover the routine abuse of bobby calves in Australian

 

abattoirs and challenge the dairy industry to do something about it.

 

Yet aside from the wider ethical questions over the use and exploitation of animals, farmers

 

are not legally doing anything wrong. This is because the treatment of animals operates in a

 

legal context where animals are considered absolute property.

 

What?s more, farm animals are exempt from the provisions of anti-cruelty legislation. Codes

 

of practice are practically useless, because they promote low welfare standards and are

 

unenforceable. The environmental impact

 

As well as systematic welfare problems, livestock farming is, both directly and indirectly, one

 

of the most ecologically harmful human activities. The Australian livestock sector is worth

 

A$17 billion and dairy cattle farming is a A$4.2 billion industry.

 

In Australia, livestock farming accounts for 10% to 16% of greenhouse gas emissions, with

 

dairy farms contributing 19% of this, or 3% of total emissions. Methane emissions, from

 

digestion and manure, and nitrous oxide from livestock are signi?cant contributors. Globally,

 

the livestock sector is responsible for more greenhouse gases than the world?s transport.

 

Livestock production accounts for 70% of all agricultural land, including the land used to

 

grow crops to feed these animals. Animal agriculture is a key factor in land degradation,

 

deforestation, water stress, pollution, and loss of biodiversity.

 

Livestock farming will also be a?ected by climate change, particularly changes in

 

temperature and water. The quantity and quality of pasture and forage crops will also be

 

a?ected. Diseases may increase due to ?uctuating weather and climate. Emissions can be reduced

 

Just as the energy sector is attempting to transition to low-carbon energy sources to tackle

 

climate change, the agricultural sector needs to transition to an ethical and sustainable

 

alternative.

 

From the current crisis, there are several opportunities for farmers to seize. Large transitions

 

are possible in land use, production, output and pro?tability.

 

Places such as Gippsland in Victoria, which currently produces 19% of Australia?s dairy, have

 

the opportunity for agricultural development based on apples and brassicas, such as

 

broccoli, kale, cauli?ower, cabbage, turnip and mustard. Some of these crops are already

 

popular in the region. As a result of climate change and increasing temperatures, some areas

 

will be more suitable than others.

 

While still in the stages of research, perennial grain crops ? which store more carbon,

 

maintain better soil and water quality, and manage nutrients better than annuals ? have the

 

potential to contribute to sustainable agriculture. New land uses could also include carbon

 

plantings, biofuels and bioenergy crops. Investing into further research for alternatives to

 

livestock farming is needed.

 

Some have argued that livestock emissions can be technically mitigated by modifying animal

 

feed, better managing pastures, carbon sequestration and manure storage. Welfare issues remain

 

But technical mitigation does not address the endemic animal welfare problems in the

 

livestock industry. Consumer demand is one of the most powerful strategies to combat animal welfare and

 

environmental problems. Research shows that we must reduce food waste and losses in the

 

supply chain and change our diets toward less resource-intensive diets, such as a plantbased diets. Doing so would cut emissions by two-thirds and save lives. It?s possible to

 

eliminate animal su?ering and reduce carbon emissions by reducing and replacing livestock

 

production and consumption.

 

Alternatives to dairy milk include soy and almond milk. Soy milk is nutritionally comparable to

 

dairy milk and has a signi?cantly smaller environmental footprint.

 

Policy initiatives also need to address these issues. The Food and Agriculture Organization?s

 

Livestock?s Long Shadow report recommends a policy approach that correctly prices natural

 

resources to re?ect the full environmental costs and to end damaging subsidies. In the

 

interim, higher taxes on meat and other livestock products will be necessary to improve

 

public health and combat climate change.

 

Denmark, for instance, is considering proposals raise the tax on meat, after its ethics council

 

concluded that ?climate change is an ethical problem?.

 

Governments everywhere need to have a transitional plan for livestock producers and

 

workers ? one that helps to cultivate the ethical and sustainable agricultural endeavours of

 

the future. Climate change

 

Animal welfare

 

Greenhouse gases

 

Cows

 

Dairy

 

Milk

 

Greenhouse Gas

 

milk prices

 

Milk Crisis

 

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