Compensation for mink farms

The Netherlands’ Lower Chamber is considering introducing a ban on mink farms, to come into force on 17 January, 2018. An important issue in this context is the extent to which mink farmers should be compensated for economic losses due to the envisaged ban. In the past few months a string of studies have been published on the topic by the Agricultural Economics Research Institute (LEI), CE Delft and Deloitte estimating the potential costs facing mink farmers if Parliament indeed decides to outlaw their trade. There are considerable differences between these studies, however, in terms of both methodology and results.

This short report discusses the most important differences and sets out the assumptions and methods that are justifiable from an economic perspective on compensation. The focus is on the main contours of the debate. The party that commissioned the report, the campaigning group Bont voor Dieren (‘Fur is for Animals’), hopes it will contribute to balanced decision-making in the Lower and Upper Chambers.

The following questions are addressed:

  1. Why do the three reports give such different estimates of economic losses?
  2. Were these losses calculated in an arbitrary fashion?
  3. Should compensation be related to the scale of economic losses?
  4. How will the mink-farming sector respond if there is phased introduction of the ban?
  5. What are the animal welfare consequences if the sector is phased out?
  6. Is there a future for mink farmers without their mink farms?
  7. What effect will a ban have on the pension provisions of these entrepreneurs?