2/21/10

The Economic Reality fo Scarce And Toxic Horses

from horsetalk.co.nz

The economic reality of scarce and toxic horses


February 17, 2010


I was not surprised that Dr Tom Lenz, past president of the American Association of Equine Practitioners, readily credited the organisation for coining the phrase "Unwanted Horse" in his article "The Unwanted Horse in the United States - International Implications". It is a coup d'etat of language choice for those American equine practitioners lobbying hardest to maintain a US export market for horsemeat.
Dr Lenz manages to equate "unwanted" with "slaughtered for human consumption" and with "should be slaughtered for human consumption, but aren't, because we need additional slaughter plants on American soil".
Slaughter advocates might consider it nothing short of a stroke of genius.
The phrase "unwanted horse" may well play a role in much of the mass confusion in the debate on horse slaughter among the American general public, horse-owners and horse welfare advocates alike.
Horses slaughtered are neither privately nor socially "unwanted", for they command a positive price both at auction and at the slaughter plant gate - and I suspect that if they did not, we would not be having this debate at all.
As any Economics 101 student can tell you, positive prices signal not "unwanted-ness", but scarcity.
There is no question - and what drives fear into the most vehement supporters and even some opponents of horse slaughter - that a universal ban on the slaughter of American horses will eliminate a source of demand for horses in the lower end of the market, as slaughter plant buyers and associated dealers exit.
This shift down in demand - in the efficient second price auction markets that are by far the largest source of horses to slaughter - will unambiguously reduce equilibrium prices, thereby increasing private ownership of auction-intermediated horses, and reducing private supply to those markets.
However, even better news is that this credible, permanent contraction in financial rewards to disposal of low-value horses through auctions will, assuming that breeders are rational decision-makers, reduce the incentive to produce such horses at all.
Over a period of time, such a reduction in supply at all prices will, by increasing scarcity in the American equine industry, raise equilibrium prices and - one would hope - the average quality of horses produced.
Natural results will be a substantial contraction in auction intermediated sales of horses and, ultimately, a higher value and higher quality horse market.
All of which leads me to wonder why the elimination of horse slaughter is so hotly debated at all, for reducing the excessive production of poor quality horses will presumably render the American equine much more "wantable".
In a very important sense, Dr Lenz is correct, however. The issues of his "unwanted horse" and the horse processed for meat cannot be separated.
In announcing its response to new EU restrictions to assure horsemeat safety, the Canadian Food Inspection Agency (CFIA) has acknowledged what has (presumably) long been known. Phenylbutazone - or "bute" - an extremely common equine non-steroidal anti-inflammatory medication, is a banned substance in horsemeat for human consumption.
Specifically, the CFIA classifies bute as a "veterinary drug not permitted for use in equines slaughtered for food", its residue causing permanent toxicity in horse meat, with no period of quarantine being able to eliminate that toxicity.
This public and socially responsible CFIA acknowledgement brings a new clarity to the "unwanted horse" debate.
After all, of Dr Lenz's "unwanted horses" - the old, the injured, the sick, the unmanageable, the incurably lame - how many have not had bute administered at some point in his or her life?
As one public example, a brief glance at the Daily Racing Form is sufficient to confirm that the vast majority of American racehorses, who are known to ship frequently to European Union-licensed plants in Canada and Mexico for slaughter and export to European diners, certainly have had bute administered.
So let me suggest that Dr Lenz's "unwanted horse" be renamed "the toxic horse" - unwanted but not slaughtered, unwanted and slaughtered, unwanted and should be slaughtered, it matters not.
The flesh of "unwanted horses" is acknowledged to be toxic when consumed by humans. And who among the politicians, equine practitioners, and veterinarians lobbying to prevent a ban on the slaughter of American horses - in the name of equine welfare - would wish to be responsible for the deleterious impact for human welfare associated with promoting the slaughter of toxic horses?

Caroline Betts holds a PhD in economics. She is an Associate Professor in the Department of Economics at the University of Southern California. The views expressed in this article are her own, given in a personal capacity, and do not represent those of the university.

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"From my earliest memories, I have loved horses with a longing beyond words." ~ Robert Vavra