Agricultural insurance systems can either incentivize or undermine animal welfare depending on how they are designed, with welfare-linked premiums offering a promising reform pathway.
The economic architecture around livestock farming significantly influences welfare outcomes. Insurance systems that compensate for preventable mortality reduce the financial incentive to invest in health and welfare. Conversely, systems that reward farms with lower disease rates through reduced premiums create positive incentives for welfare investment. Linking public subsidy payments to welfare outcome indicators - as EU CAP reform attempts - uses financial levers to drive welfare improvement at scale.