30 April 2014
Even those, like myself, who in principle support the culling of wild animals in support of improving the welfare of livestock will be, as I have been, reduced to despair by the DEFRA Independent Expert Panel’s evaluation of the pilot badger culls in parts of Gloucestershire and Somerset which was published last month. DEFRA implemented the culls on the basis that they would be humane and effective, but, though it expresses itself in the most restrained fashion, the Panel shows that everything that was predicted to go wrong with the culls has gone wrong.

First, the killing has been unacceptably inhumane. DEFRA was prepared to countenance prolonged suffering in up to 5% of badgers, but the Panel concludes that between 7.4% and 22.8% of the almost 2,000 badgers killed took more than 5 minutes to die. Those doing this outside of these culls would rightly face imprisonment.

Secondly, the target number of at least 70% badgers to be killed has not nearly been met. The culls were meant to test the effectiveness of controlled shooting, but less than 37.1% of the badgers in Gloucestershire and less than 24.8% of the badgers in Somerset could be killed in this way. Though it was not part of the approved pilot, cage trapping was also employed (almost from the start but, it seems, increasingly as the failure of shooting alone became manifest), but nevertheless less than 39.1% of the badgers in Gloucestershire and less than 48.1% of the badgers in Somerset were killed. What effect missing this target will have on the incidence of TB in cattle is fiercely contested – it is arguable it will increase it in contiguous areas – but it indisputably represents the failure of DEFRA’s policy.

In the light of this, even Mr Owen Paterson, the Secretary of State for Environment, Food and Rural Affairs, whose concern with bovine TB could not be greater, has perforce postponed plans to roll-out badger culling across Britain, though DEFRA is persisting with the Gloucestershire and Somerset pilots in order to ‘perfect’ the culling method.

I have no doubt that the most important contributor to regulatory theory of the last half-century, the late Ronald Coase, would have viewed this appalling episode as a textbook illustration of what he called ‘government failure’ caused by ‘blackboard economics’. Though the culls have not been entirely carried out by government agencies in the way the NFU argued they should have been, they would be impossible without very extensive government support and subsidy pursuant to DEFRAS’s policy, restated this month in an extensive strategy document, to completely eradicate the disease from the entire UK.

For the culls to be effective, would require the accurate estimation of the number of badgers in the area to be culled and the reliable killing of the specified percentage of that number within the time set. When one thinks about the practicalities of this, can one really think the culls could possibly have met their targets without the use of the armed forces, and, in my opinion, not even then. This is a policy which works only on the blackboard. It was always impossible to put it into practice, even for these relatively small pilot cull areas, not to speak of the entire country as DEFRA envisages.

Instead of showing any ability to come to terms with this, Mr Paterson responded to it with one of the most stupid excuses for policy failure I can recall in thirty years of studying regulation. When accused of ‘moving the goalposts’ by, in light of the low number of badgers killed, extending the time allowed for the culls, though this undermined the very point of those culls, Mr Paterson claimed it was the badgers, refusing to co-operate in their own deaths, that had moved the goalposts!

What is more, in February a scandalous event occurred which has not been widely reported in the national media but which shows that the extent of the blackboard economic illusion is far greater than, even now, is publicly appreciated. A Cumbrian herd of more than 100 head which had been certified as free of the disease and, as is usual, not tested prior to sale, was sold at auction in Cheshire. The cattle had been dispersed around England, Scotland and Wales when it was found that some were in fact positive (and therefore the entire herd could be positive). Since sale these cattle will have been in close contact with very many other cattle, and these are proving very difficult to trace. The sale of these Cumbrian cattle could easily have spread the disease across mainland UK.

And this risk is being run all the time. The UK livestock industry is based on the movement of live animals around the country (with a very much smaller movement to and from other EU member states). There are over 20 million farm to farm cattle movements in the UK each year! Unless one has extreme confidence that those cattle are free of TB, this is, of course, a preposterous thing to do. Should we have such confidence? As with the actual implementation of the cull, one should compare the blackboard assumptions with the practical reality.

When Mr Paterson tells the public that ‘Bovine TB is a terrible disease which is devastating our cattle and dairy industries’, and that, ‘because of TB’, hundreds of thousands of cattle have been slaughtered over the last decade, with over 38,000 slaughtered in 2012 alone, he gravely misleads the public into believing that those cattle were horribly ill. They were not. They were slaughtered because skin tests or blood tests had showed them to be carrying the Bovine TB bacterium. It is rare for the disease to develop in UK cattle to the point where they show any clinical symptoms at all. This, of course, is largely because they are slaughtered when they test positive at an early stage in the development of this very slow acting disease. But nevertheless the number of cattle slaughtered reflects DEFRA’s eradication policy. That policy is not a response to suffering. Rather it is itself the cause of a very large premature slaughter.

Even more importantly, the testing is significantly inaccurate. There are numbers of instances of livestock owners not complying with the testing regime and even fraudulently interfering with the testing. These offences may be regrettable, but they are entirely predictable. They are much less important than inevitable failures in the testing. These tests are, of course, not perfect even in laboratory conditions, but the point that serious reflection on the practicalities of the testing of herds of cattle makes one realise is inevitable is that, in the field, these tests will have very serious margins of error. These margins are compounded by repeated failures in the national system for identifying and tracing livestock.

The combination of serious margins of error and an enormous number of cattle movements make it very likely that the practices of the livestock industry are the major cause of the incidence of Bovine TB infection and, whilst it is impossible to isolate the effect that badgers, which undoubtedly can transmit the disease to cattle, have, it is very likely to have no significant effect given the infection the livestock industry itself causes. This was the conclusion reached by the most substantial review of these issues that has been conducted, that of the Independent Scientific Group which presented its final Report to DEFRA in 2007. Its Chair presented the Report to the then Secretary of State in these terms:

“while badgers are clearly a source of cattle TB, careful evaluation of our own and others’ data indicates that badger culling can make no meaningful contribution to cattle TB control in Britain … weaknesses in cattle testing regimes mean that cattle themselves contribute significantly to the persistence and spread of disease in all areas where TB occurs, and in some parts of Britain are likely to be the main source of infection.”

The situation is, I suggest, even worse than this. So extreme is the government failure caused by blackboard economics that Coase would, I believe, view Bovine TB policy as an example of the government actually causing the problem. Why does the livestock industry behave in the apparently irrational way that has had the consequences demonstrated by the sale of the Cumbrian herd? It is because the eradication policy is regarded as a public good. The costs of testing are largely borne by the public and livestock rearers are compensated for the loss of infected cattle. There is continuous complaint about the level of compensation, but it is far greater than the only value these cattle can have, which is as meat. Under these circumstances, the livestock industry continues with extensive cattle movements. It would not conceivably do so if it bore the full cost of these movements, which includes the cost of the disease.

Regulatory policy rests very heavily on the concept of the externality as a source of market failure. But Bovine TB is made an externality, not by market failure, but by government action. It is the public funding of the eradication policy that leads to the livestock industry acting in a way that ensures eradication is impossible because that funding makes the costs of the disease an externality to the livestock industry. If we made the livestock industry bear the costs of TB, the eradication policy, which is overwhelmingly prohibitively costly if that cost had to be factored into the market price of cattle, and is actually impossible to pursue by private action alone, would be abandoned. Bovine TB, which with elementary hygiene has no implications for the human food chain, would be controlled in a cost-effective manner through husbandry measures.

Some glimmer that this is so lies behind current initiatives to make the livestock industry bear more of the costs of the testing programme. These proposals are opposed by the NFU and there is no realistic prospect of them being generalised to the point where cattle are sold with an implicit warranty that they are of satisfactory quality, as is the case in normal sales of goods. But until the livestock industry does bear the cost of Bovine TB, it will be impossible for a rational policy to emerge.

In one of the papers for which he was awarded the Nobel Prize, Coase wrote:

“When they are prevented from sleeping at night by the roar of jet planes overhead (publicly authorised and perhaps publicly operated), are unable to think (or rest) in the day because of the noise and vibration from passing trains (publicly authorised and perhaps publicly operated), find it difficult to breathe because of the odour from the local sewage farm (publicly authorised and perhaps publicly operated), and are unable to escape because their driveways are blocked by a road obstruction (without any doubt publicly devised), their nerves frayed and mental balance disturbed, [most economists] proceed to declaim about the disadvantages of private enterprise and the need for governmental regulation.”

Our shameful policy regarding Bovine TB, which involves the premature slaughter of hundreds of thousands of cattle and now the often inhumane slaughter of badgers, at enormous and wholly fruitless public expense, does not sit well with Coase’s humorous examples of, not merely government failure, but government causing the problem it seeks to address. In all other respects, however, Coase describes that policy perfectly.

David Campbell is a Professor of Law at Lancaster University Law School. He is a leading commentator on the law of contract and commercial law and on forms of public regulation of economic activity. He has previously studied the foot and mouth disease outbreak of 2001.  His most recent book with Linda Mulcahy and Sally Wheeler is Changing Concepts of Contract: Essays in Honour of Ian Macneil (Palgrave Macmillan 2013).

You can find out more about David’s research at http://www.lancaster.ac.uk/fass/law/profiles/david-campbell