The Economic Impact of Proposition 12

Brian German Agri-Business, Regulation

Californians have overwhelmingly passed Proposition 12 with just over 60 percent of the vote, establishing new spacing requirements for animal agriculture.  Supporters of the proposition raised nearly 24 times as much as the opposition to ensure its passage.  Although the parameters of the measure will not become effective for a few years, there will be a significant economic impact.

Proposition 12The most notable for California is the requirement for egg-laying hens to be provided with at least one square foot of space per animal by 2020.  The last time that egg production was voted on was in 2008 with Proposition 2.   A study from Purdue University found that its requirements caused California egg production to fall approximately 35 percent and increased consumer prices by as much as 33 percent.

Proposition 12 also stipulates that calves raised for veal production are required to have 43 square feet of usable floor space by 2020.  Breeding pigs will also need to have at least 24 square feet of floor space by 2022.  The measure also bans the sale of these commodities coming from other states unless they also meet the new requirements.

The nonpartisan Legislative Analyst’s Office noted the measure will likely cause an increase in consumer prices and end up costing the state as much as $10 million a year to enforce. The new requirements will also likely end up costing the state several million dollars a year in lost tax revenues from farm businesses, as production either declines or stops altogether for some farming operations based on the higher cost of production.

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Brian German

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Ag News Director, AgNet West