Brad Taylor has an interesting post discussing how New Zealand pig farmers are using the issue of stall vs non-stall pigs as a way to increase protectionism in the New Zealand pork industry.
Now if all that matters is how humans value the issue then Brad is right – the efficient solution requires no regulation.
Why? If people value pigs not being hurt, they will be willing to pay to eat non-stall pigs. If all overseas pigs are stall pigs (as the farmers are saying) then this creates an opportunity for NZ farmers to differentiate and tap into this market. If people aren’t willing to pay sufficiently enough more, then there is no market for it.
As a result, as long as all that matters is how humans value and the choice of conditions is observable there is no need for “protection against overseas pork”.
However, we may instead believe that animals have some intrinsic right not to be tortured. As pigs don’t actually have a choice in the matter we may require regulations if we want their rights to be valued.
In this case, a tax on stall pig meat that captures the value of the pigs suffering WOULD be the solution – as there is a clear externality on pigs that cannot be solved through Coase bargaining.
As a result the key question we have to ask is, what intrinsic right to the lack of torture do pigs have? If we can define that then a mixture of clear labeling and a tax on pork from stall pigs could be the solution.