The Chicken and the Egg

In Texas, a few years ago, I visited one of the industrial chicken farms that pump out hundreds of thousands of eggs per day. Equipped with a gas mask, we entered a warehouse where chickens are packed onto an ‘egg-assembly-line’, perching room only. Chickens peck at pellets, which often contain by products of other industrial food chains[1], while a conveyor belt delivers freshly laid eggs to a succession of eyes and arms, some human some mechanical: x-rays, sorters, sprayers, and inspectors until, at the end of the line, Large Grade A eggs are carried off to be delivered to my neighborhood grocery store in a carton with a picture of barnyards and mother hens.

In contrast, our first trip as a class was to a small family farm near Bolsena where beautiful orchards and gardens gave testimony to the passion and care of its owner. No insecticides, no pesticides. Chickens roam freely in a yard guarded by dogs to ensure their safety as they eat grasses and a diet of grains specially designed by a homeopathic veterinarian.

With these contrasting images freshly brought to mind, I went down to one of the small grocery stores in Bolsena (passing at least one small chicken coop on the way) to discover if I could find any locally sourced eggs. In broken Italian I communicated to the woman behind the counter what I was looking for and she shook her head, made the international sign for handcuffs with her wrists crossed in front of her, and said the single word ‘multa’, meaning ‘fine’. Intrigued, I decided to explore the production of eggs to understand the challenges and benefits of small-holder production and why our current system seems to be favoring the industrial farm.

Through observation, desk research, and interviews with a local farmer near Bolsena (Mark [2]) and a food safety representative at Cersal, I’ve found that safety regulations, in an attempt to respond to and regulate industrialized egg production, are also suffocating family scale egg production. As a result, two very different value chains have emerged with a clear market bias toward industrial scale production.

Small scale egg production provides opportunities and challenges to improved food security. In terms of livelihoods, because the smallholder farmer also takes responsibility for the marketing and distribution of the product, a greater percentage of the profits are retained at the household level. On the other hand, eggs are an important low-cost form of protein and many low-income households in the EU heavily depend on the inexpensive eggs delivered through the industrial system to improve their food security.[3] In terms of nutrition, Mark’s eggs are of a superior quality due to a special diet for the chickens, primarily locally sourced, which consists of seven kinds of grains plus grass, seeds, and legumes to ensure eggs are nutritious and packed with omega 3, vitamins, minerals, antioxidants, and good fats. It is important to note however, that nutritional quality of the egg is dependent on the diet of the chicken and the freshness of the egg and not necessarily a function of the size of the farm.[4] Further, most of the eggs collected are fertilized and thus have a longer shelf-life. In terms of sustainability, a lower concentration of chickens are less likely to get sick and pass diseases, the excrement is directly returned to the land in sustainable quantities, and the majority of both inputs and outputs are procured or distributed locally thus lowering the transport footprint.

According to a source at Cersal, the inherently lower risks associated with smallholder egg production due to the lower concentration of birds has been clearly documented and, therefore, an effort has been made to simplify and minimize safety regulations for smallholder egg producers, who are defined as producers with fewer than 100 laying hens. There is an acknowledgment, however, that small scale, local production, while desirable from a food security perspective is also difficult to regulate. As a result, small farmers must comply with basic registration requirements, ensure traceability of production, and vaccinate chickens. According to Mark, the amount of paperwork required to meet these regulations doubles the amount of time he spends on his small egg production (thus halving his hourly returns). Further, these requirements have had a detrimental impact on older farmers who have little training and/or access to the internet or printer/scanners.

While gender-specific responsibilities on a small scale commercial farm are difficult to generalize and seem to be gains seem to be essentially gender neutral, expanding the opportunities of small scale family farms ensures that a larger proportion of income goes to improving rural household livelihoods and is likely to benefit women. On Mark’s farm, while he and his wife share responsibilities, Mark is primarily occupied with the upkeep of the garden and caring for the animals while his wife runs a guesthouse on the farm and manages the marketing and distribution and financial aspects of their farm. However, non-commercial, family-only coops are often maintained by women and lowering market restrictions at this level is likely to have a stronger impact on women whereas industrial scale production spreads the value of production across a variety of commercial operations, the majority of which are owned, if not operated, by men.

The structure and requirements of the safety regulations are also driving the perpetuation of two very distinct value-chains: the industrial model with thousands of hens and the small-holder model capped at fewer than 100. At the industrial level, price competition and commoditization of the ‘egg’ has led to expanded economies of scale and lowered emphasis on quality. On the other hand, small-holder egg production is driven by quality as a differentiator due to an inability to compete with the industrial model on price. However, the added nutritional value of a locally produced egg, according to Mark, is summed up as follows: “We are made of what we eat and what we drink. Maybe we try to save money by buying cheaper food, but then we spend more on medicine. Health has no price.” The basic value analysis below illustrates the impact of scale on lowering margins and generating profit.[5]

While current safety regulations have created challenges for smallholder farmers, a new regulation banning conventional chicken cages will go into effect in 2012 and is anticipated to create challenges for large scale egg producers and perhaps open up more of the market to smallholers.[4] The figure below shows the dramatic shift anticipated due to the change in legislation. This change, however, is also anticipated to cause European producers to lose market share to internationally sourced eggs that can be used as ingredients in other foods, though not sold raw.

[1] FantasticFarms.com. What do chickens eat? A guide to chicken food. http://www.small-farm-permaculture-and-sustainable-living.com/what_do_chickens_eat.html (accessed Jun 20, 2011)

[2] Names have been changed.

[3] Chippindale, Nick (2010) The 2012 EU ban on conventional cages and its effect. Nuffield Farming Scholarships Trust. http://www.nuffieldinternational.org/rep_pdf/1291322756Nick_Chippindale_edited4.pdf

[4] Egg Safety Center, New Federal Guidelines for Food Safety. http://www.eggsafety.org/mediacenter/videos/67-new-federal-guidelines-for-food-safety

[5] Note that for the smallholder, profit is the salary of the farmer whereas for the industrial scale, salaries are factored into the costs of production and post production. The breakdown illustrates a much smaller percentage of the consumer price per egg being paid to the producer.