Future Proof Financing

In the last decade, global awareness of the behavioral needs of farm animals has increased with respect to the public, private industry and policy makers. One of the most impactful results about the trend towards higher welfare standards is that some housing systems and management practices are being phased out, based on market demands, legislation or emerging science.

The FARMS Initiative recommends that banks no longer finance new construction of housing systems, infrastructure or equipment which does not meet the Responsible Minimum Standards. In particular, systems of confinement such as cage housing for laying hens and gestation crates for sows should not be financed. These housing systems can be expensive and have a working life of 15-25 years, if not more, and have the potential to become stranded assets, based on the clear trend away from cages and crates resulting from welfare concerns.

The FARMS Initiative also recommends that banks encourage producers who are not currently using systems, infrastructure or equipment which meet the Responsible Minimum Standards to create a time-bound plan for transitioning towards meeting the Responsible Minimum Standards, including by providing attractive financing to producers who do so.