The Idea of Ethical Accounting for a Livestock Farm

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    ABSTRACT. This paper presents the idea of a decision-support system for a livestockfarm, called ethical accounting, to be used as an extension of traditional cost accounting.Ethical accounting seeks to make available to the farmer information about how hisdecisions affect the interests of farm animals, consumers and future generations. Further-more, ethical accounting involves value-based planning. Thus, the farmer should basehis choice of production plan on reflections as to his fundamental objectives, and he shouldmake his final decision only after having seriously considered the various consequences forthe affected parties.

    KEY WORDS: animal welfare, consumers, economics, environment, ethics, planning,stakeholders


    In the industrialized part of the world, there has been a considerable effortto improve the efficiency of livestock production during the last four or fivedecades. Profit maximisation has been the dominant criterion in the choiceof production plans, technology, housing systems etc. As a result, the inputof labour and feed necessary to produce one unit of output (meat, eggs,or milk) has steadily declined. Relative prices of animal products havedecreased, and consumers have been able to increase their consumption ofmeat and still spend a much smaller proportion of their income on food.

    In the course of this development, however, a number of unintendedconsequences of the very intensive systems of livestock production havebecome apparent and have given rise to growing public concern. Forone thing, there is concern about the welfare of the animals. Thereare behavioral problems caused by the very restricted conditions underwhich the animals are kept (Sande and Hurnik, 1996). Fast growth andhigh milk yield also create welfare problems by causing higher frequen-cies of certain production related diseases (Agger and Willeberg, 1991).Another consequence of high intensity is the increased effect of manureand fertilizers on the environment (de Wit et al., 1987). Finally, there is

    Journal of Agricultural and Environmental Ethics 11: 85100, 1999. 1999 Kluwer Academic Publishers. Printed in the Netherlands.


    concern about the consequences of the routine use of pesticides, medicine,hormones and other chemicals in production.

    Governments have started to act on these concerns. Regulations ona wide range of issues have been introduced. Further regulations areexpected in the future. The demand for animal products seems graduallyto change profile: A small, but perhaps increasing segment of consumersseems willing to pay higher prices for alternative products. Farmers aresubject to a deteriorating social reputation, and they themselves perhapsalso experience a loss of some of the values traditionally connected withlivestock production. Thus, there seems to be a generally perceived needto develop and implement production systems that pay respect to consid-erations other than narrow economic consequences in terms of quantitiesand prices.

    However, if a farmer is to change his way of producing, he needs a clearidea about the direction this change should take. What precisely are theobjectives animal production ought to achieve? Particularly, which trade-offs should be made when these objectives conflict? In order to answerthese questions, it becomes necessary to reflect on the fundamental valuesunderlying animal production.

    The need for new ways of production, and the reflection on valuesinvolved in developing them, has in Denmark prompted a research projectcalled Development of Ethical Accounts for Livestock Farming, in whichthe authors of this paper are engaged. The basic idea is that the farmer, inhis planning, should consider how his choice of production practice affectsother parties, such as farm animals, consumers, and future generations.

    The project assumes the following notion of ethics: Ethics isconcerned with how to weigh up conflicting interests of the parties affectedby ones acts. Thus, any decision on which fundamental objectives oughtto govern livestock production involves an implicit judgement as to whoseinterests are to be taken into account, and with what weight.

    The aim has then been to develop a framework of decision supportfor the individual farmer. This framework consists of two parts: (1) Anaccounting system providing information on how the farms activities,over a certain period of time, affect the interests of other parties as wellas the farmers own interests, and (2) a set of budgeting procedures withinwhich the farmer reflects on and articulates his objectives for future periodsof time as based on his accounts. Taken together, these two parts shouldenable the farmer to clarify his ethical convictions and better organize hisproduction in accordance with these so that he can justify his choices tohimself and to other parties.


    The purpose of this paper is hence to introduce and discuss this ideaof ethical accounting. We start out by introducing our general conceptof ethical accounting. Next, we discuss the particular notion of ethicsimplicit in this concept. Following this, we briefly discuss how the affectedparties are represented in the accounts. Finally, we discuss the perspectivesof implementing ethical accounting.


    Often discussions of ethical issues within animal agriculture, e.g. welfareproblems of farm animals or environmental problems, tend to focus onwhich general standards should be implemented in order to secure moreacceptable animal agricultural practices in society as such. For instance, itis discussed how housing systems should be designed, or how manure isto be handled in general.

    Questions like these are certainly important. However, there is a tend-ency to overlook the role of the individual farmer and his style and skillsin stockmanship. Both research and practical experience suggest that in apopulation of farms with similar production systems, there is often a greatvariation in production efficiency. Similarly, there is great variation in thewelfare of the animals or in the loss of nutrients to the environment; avariation which is often comparable in magnitude to the mean variationbetween systems (cf. Van der Ploeg, 1993; Halberg et al., 1995; Sande etal., 1997).

    In other words, what matters ethically in livestock production is notonly the choice of a technology or system fulfilling certain standards;also, the farmers management of this technology or system plays a signi-ficant role. Thus, from an ethical point of view, there is good reason toengage individual farmers in considering how the combined effects oftheir production system and production practice affect the animals and theenvironment. This is the main motivation behind the idea of developing asystem of ethical accounting for individual farms.

    An ethical accounting systems such as we propose would be benefi-cial for two reasons. First, if farmers are confronted with information onhow their production practice affects the interests of other parties, theymay become motivated to adjust their practice in order to secure a morebalanced satisfaction of interests, and at least they gain new insight intothe working of their farm. Second, what farmers need, if they want to actin accordance with ethical concerns, are guidelines for assessing the totalpractice on their farm.


    Economic accounting plays probably a central role in most farmersplanning and decision making. The rationale of accounting is to get acomplete overview of the consequences of all activities carried out by thefarm over a fixed period of time, and to evaluate these consequences ineconomic terms (cf. Demski, 1994). One part of accounting is concernedwith external reporting. This part concentrates on the bottom line result ofthe overall performance. Another part is concerned with internal reporting,and this is primarily motivated by the great complexity of the productionprocess.

    Internal cost accounting records the costs associated with the inputsused in different subsystems of the production process as well as the finalproduction which the inputs result in. Thus, cost accounting gives insightinto the internal technical transformations that make up the productionprocess. This information can be used to model the consequences of acts. Itserves as the basis for consideration of alternative, future courses of actionand calculation of their economic consequences.

    What makes accounting such a strong tool for planning and evalu-ation is that it gives (from an economic point of view) a complete pictureof the farms performance; that is, it sums up the ultimate economicconsequences of all acts (transactions) done on the farm. However, froman ethical point of view economic accounting is insufficient as a source forevaluation and planning.

    First, economic accounting only records the consequences of acts fromthe point of view of one affected party, i.e. the owner of the firm (typic-ally the farmer himself), whereas the acts of the farm affect a wide rangeof other parties, e.g. farm animals, employees, neighbours, local society,food industry, retail trade, government, consumers, environment, futuregenerations, etc. The term stakeholder has been coined to designate aparty that either interacts with a firm or is affected by the acts of the firm(Ackoff, 1982; Freeman, 1984). From an ethical point of view, we assumethe interests of all stakeholders (i.e. all affected parties) should be takeninto account. (We discuss the assumed notion of ethics in next section.)

    Second, accounting only records the economic consequences of acts.But a farmer may have all sorts of objectives which are rarely subsumedunder the interest of making money, e.g. he may have an interest in hisjob being varied and challenging, or he may have an interest in living inbeautiful surroundings. Again, from an ethical point of view, we assumethat the overall good of a stakeholder should be taken into account, not justhis economic welfare.

    Our idea is that ethical accounting should be an extension of tradi-tional economic accounting, and that this integrated accounting system


    should serve the dual role as both a source of information for modellingthe consequences of acts, and as a basis for an evaluation of these acts. Itis not the intention to prescribe how the farmer should act; thus, ethicalaccounting does not have an ethical bottom line. Rather, the idea is toinvite the farmer to consider how his choice of production practice affectshis own interests as well as the interests of other stakeholders, and to makeavailable to him information that is relevant for this consideration.

    It is then up to the farmer himself to assess the information and to makehis final judgement as to whose interests he actually wants to acknowledgein his decision, and with what weight. He might decide not to give weightto interests other than his own. The sole requirement is that he makes hisdecision only after seriously having considered information relevant forjudging how his choice affects the interests of other stakeholders.

    The concept of ethical accounting involves one year consecutiveaccounting periods. After each period, there is a presentation of accountson the farm, where the different items of the accounts are discussedbetween the accountants (in our case: researchers from the project) andthe farmer and his wife. Also, the farmer makes his ethical budget forthe next period, where he articulates the objectives he wants to achieve.The budget is then compared with the actual performance at the followingyears presentation of accounts, and so on.

    Now, it is one thing to set up the idea of ethical accounting in outline;another thing is to fulfil it. In order to make the idea work in practice, it isnecessary to decide on a number of issues, and there is, of course, no onesingle way to develop the idea. In the following, we give a short report ofhow we, in the course of our project, have created a prototype of ethicalaccounting, and we discuss some of the issues involved in making it work.We start out by discussing the ethical assumptions involved in our conceptand prototype of ethical accounting.


    Ethical accounting seeks to strike a balance between two considerations:On the one hand, we want to leave the final judgement to the farmer. Wedo not want to prescribe how he should act. On the other hand, it is neces-sary to make at least some assumptions about what makes an act right inorder to gather and present to the farmer the information which we thinkshould guide him in his judgement. These assumptions are presented inthis section.

    Ethics is concerned with the question of how to act, all thingsconsidered. Different ethical theories disagree about how the right act is


    determined. Ethical accounting assumes a teleological and individual-istic account of the right act. Roughly, we assume ethical considerations tobe a matter of weighing up how good the various consequences of an actare for the affected parties.

    More precisely, we define teleology as the view that the right act (outof a set of available alternatives) is the act that maximizes the good(Broome, 1991; cf. Vallentyne, 1987). According to this view, the concernfor maximum goodness amounts to the whole of ethics. Non-teleologicaltheories, on the other hand, ascribe a role in ethics to considerations otherthan the pursuit of maximum goodness, although most theories do give itsome role. We shall add a few comments to our definition.

    For one thing, it does not follow Rawls, 1972 in requiring that thegood be defined independently of the right. Rather, teleology is identifiedby its structure. Any maximizing theory is teleological, according to ourdefinition, and if any ethical theory says that we should maximize some-thing, this something is what the theory determines as good (cf. Broome,1992). Moreover, the definition does not insist that acts are to be valuedby their consequences alone. Thereby it follows the recent practice (e.g.,Williams, 1973; Broome, 1991; Sheffler, 1994) of including the act itselfin the overall outcome or state of affairs, which is to be evaluated by thetheory.

    There is, however, another point where our definition does not followrecent practice. Teleology (or consequentialism, as it is also called) is oftenassumed to exclude agent-relativity by definition (Scheffler, 1994; Parfit,1984). A theory is agent-neutral if it gives to all agents the same objective,i.e. if it values an act in the same way from any point of view. It is agent-relative if it ascribes different objectives to different agents.

    We follow Broome, 1992 (cf. Bennett, 1989), who argues that theissue between teleological and non-teleological ethics is logically distinctfrom the issue between agent-neutral and agent-relative ethics. What isimportant for us in this regard is simply the point that, within our definition,we want to allow for the possibility of the farmer putting more weight onhis own good than an agent-neutral objective would prescribe.

    Our definition interprets teleology rather widely. We are quite happywith this definition, because what we need is primarily a structure (and themaximizing structure is necessary if the concept of ethical accounting isto make sense), whereas we want to leave as much leeway as possible forthe farmers own interpretation and judgement. However, it might be askedif this wide definition excludes anything from teleology.

    An answer to this question depends on the exact requirements for atheory to be counted as having a maximizing structure (cf. Vallentyne,


    1988). Side-constraint theory (Nozick, 1974), which claims that certainacts simply are impermissible, certainly seems to be opposed to teleology.Another counter example is contractualism. According to contractualistethical theories, what is right is determined by what rational partiescan agree on under certain specified circumstances. Since contractualismshows no interest in the pursuit of good, it is likewise opposed to teleology.

    However, side-constraint theory has recently been critizised (Sheffler,1994), as it turns out to be difficult to find a rationale for side-constraints,if this is not to be interpreted as the teleological objective to minimizethe (dis)value of violations. And contractualism is argued as presentingproblems when applied to animals (Rachels, 1993) or to future generations(Barry, 1983). Since ethical accounting includes both animals and futuregenerations as stakeholders (cf. next section), contractualism is, therefore,not suited for our purpose. So, if these theories do not have a teleologicalstructure, this involves no difficulty for us.

    Next, we turn to our definition of individualism. What we call individu-alism is the following principle, which states the general condition thatoverall goodness depends positively on the good of individuals (humansor animals):(a) Two alternative acts are equally good if they are equally good for each individual. And(b) if one alternative is at least as good as another for everyone and definitely better forsomeone, it is better.

    This is a generalized version of The Principle of Personal Good (Broome,1992), which again is a generalized version of the economists ParetoPrinciple (Varian, 1992).

    We believe this principle has great intuitive appeal; and again it is anassumption more concerned with structure than with content. We do notassume any substantial theory of what is good for individuals. As becomesclear in next section, ethical accounting does not measure the affectedindividuals good as such; rather, it seeks to measure things on whichthe good of individuals is assumed to depend. It is left for the farmer tomake the assessment of the weight which each item has for the individualsoverall good.

    It might be useful to compare our assumed individualistic teleologywith a more familiar teleological view such as utilitarianism. Utilitari-anism ranks states of affairs according to the sum of welfare they contain.Apart from being teleological, utilitarianism is defined by two furtherclaims. First, states of affairs are claimed to contain only one sort ofvalue: individual welfare. One part of this claim is individualism as definedabove; however, utilitarianism further assumes a substantial theory aboutwhat the individual good (or welfare) consists of, such as hedonism, or a


    preference-satisfaction theory, or an objective list theory (on these theories,see Parfit, 1984; Griffin, 1986).

    Second, utilitarianism claims that states of affairs are to be rankedaccording to the sum or total of welfare (the sum-ranking principle). Thus,utilitarianism gives no value to equality of welfare. However, it is notinconsistent with individualism to give some weight to the equality ofwelfare, such that for any total of individual good, the more equally itis distributed the better. The only thing that individualism does not allowis that the general good can be increased without increasing at least someindividuals good. And once again, we want to leave it to the farmers owndecision to assign the weight that each individuals good should have inthe overall good.

    Traditionally, ethical theory has been concerned solely with theresponsibilities we owe to other humans. However, ethical accountingis primarily motivated by concern for animal welfare and for the environ-ment. This raises the question of how animals and nature as such shouldbe represented in the accounts.

    Writers like Singer, 1976; Regan, 1984; and Rollin, 1981, amongothers, have forcefully argued that the basic duty to recognize the interestsof other human beings extends, by an argument of analogy, to everybeing capable of experiencing a difference between one thing or anotherhappening to it. Since farm animals can safely be assumed to possess thiscapability, we count them as stakeholders in their own right, as has alreadytranspired.

    The mere point that animals are worthy of ethical concern for theirown sake is accepted, we believe, by most people. It is more controversialhow to weigh this concern up against conflicting human interests (Jensen,1996). Again, however, ethical accounting leaves this latter question forthe farmer to decide.

    As regards the environment or nature itself, some writers would like toextend the ethical concern to all living individuals (e.g., Goodpaster, 1978;Taylor, 1986). Others would extend it to ecosystems (e.g., Callicott, 1980;Rolston, 1988) or include rocks, rivers and landscapes (e.g., Elliott, 1982).In our project, we are more inclined to understand the concern for naturein anthropocentric terms, although we allow for a broad notion of humanwell-being, according to which the preservation of nature can be an end initself (cf. ONeill, 1993).

    However, we are not going to argue this point here. The way the concernfor nature is represented in ethical accounting makes it open to a non-anthropocentric interpretation as well. So we do not believe that our ownviews on this matter will bias the farmers.



    Our prototype of ethical accounting is based on a rough classification ofstakeholders into four groups: the animals on the farm, consumers, futuregenerations, and the farmer himself (including his family).

    It is a consequence of the individualism described in last section thatwe do not include collective entities, e.g. the food industry or retail trade,among the stakeholders: The good of these entities is reducible to some-thing that in the end must benefit individuals. Furthermore, within theproject we have called the third group consumers, although it may bemore accurate to call it the present generation.

    The aim of ethical accounting is to record consequences of the farmsproductive activity which affect how good the outcome is for each stake-holder group. The individual members of these groups are hereby assumedto have common interests. For each stakeholder group, we have assumedwhat its basic interests are, and we have then tried to develop measurableindicators for how the farms activities affect these interests.

    When it comes to the interests of the animals, there is some controversyas to what animal welfare consists in (Sande and Hurnik, 1996). We haveassumed hedonism, which claims that animal welfare consists in pleasantexperiences and the absence of unpleasant experiences: The more pleasantexperiences and the fewer unpleasant experiences the better. Thus, ourrecordings are particularly directed at indicators on how the animals exper-ience their situation. However, such indicators are not easy to come by, andwe believe that the actual material we gather for judging the welfare of theanimals could be relevant for theories other than hedonism.

    A large part of the research project has been concerned with the devel-opment of reliable methods to judge animal welfare on farm. We try toaggregate information from four sources: Information about the housingsystem, recordings of management routines, observations of the animalsbehavior, and clinical observations and other information on the healthstatus of the animals. For a more detailed account of our methods, seeSande et al., 1997.

    What do consumers expect from the practice of livestock farming ingeneral? The rationale of productive activity is to use up resources in orderto produce commodities which are of greater use to the consumers than arethe resources themselves. Thus, we assume consumers to want the mostvaluable product at the lowest cost. One way to measure this cost/benefitratio is by market prices. Given a competitive market, consumers wouldprefer producers to choose a profit-maximizing production plan, sincethis is what grants them the most efficient use of resources (see Varian,1992).


    However, the economic determination of the most beneficial use ofresources will have to be corrected by a range of other considerations.For one thing, it only counts benefits and harms as they are valued by thepresent generation of consumers. Future generations are not participants inthe present market, nor are the animals. Secondly, it depends on the rathernarrow determination of a consumers welfare as being affected only byhis own consumption of marketable goods. But a persons welfare is likelyto depend also on non-marketable goods, and it might be dependent on theconsumption choices of other persons, too.

    Among the concerns for the effects of livestock production in general,not adequately reflected in economic evaluation, are the following: thepollution of marine and fresh waters and ground water reservoirs fromloss of nutrients and accumulation of pesticides; the use of fossil energy,which is a non-renewable limited resource, whose combustion furthermorecontributes to the greenhouse effect; and the effects on biodiversity andthe beauty of the landscape. All of these issues are believed to affectthe welfare of consumers; and some of these effects have long termconsequences and will affect the welfare of future generations. We believethe interests of future generations to be primarily concerned with longterm, environmental issues.

    In ethical accounting, the economic balance of the farm is supple-mented with balances regarding the flow of N, P, and energy through thefarm as a system. This allows for calculation of the total consumption ofenergy, and the potential loss of nutrients to the environment, and it alsogives detailed insight into the transformation processes on the farm. Notethat these indicators measure the acts on the farm and not the state of therecipients; it is rather difficult to relate the state of the recipients to the actsof an individual farm. For more details on these indicators, see Halberg etal., 1995.

    We have finally tried some indicators relevant for assessing biodiversityon the farm, as well as indicators of the risk of pesticide residues in theenvironment, although it is harder to find adequate measurement attributesin these areas.

    Regarding the farmer as a stakeholder, he should himself state hisinterests. Apart from the technical and economic transactions of the farm,ethical accounting measures the achievement of the farmers personalobjectives by so-called subjective attribute scales (Keeney and Raiffa,1976). In his budget, the farmer states the objectives he would like toachieve for himself and his family during the next period. By the end of theperiod, the farmer is then confronted with these objectives, and he is asked


    to indicate to which degree he believes himself to have achieved each ofthe objectives.

    There are several methods to support the reflection on and articulationof objectives (e.g. Keeney, 1992; Bogetoft and Pruzan, 1991; Keeney andRaiffa, 1976). We have tried out some of these in the present project. Westarted out by convening the participating farmers and their wives in smallgroups to discuss among themselves their values and objectives, under theguidance of a facilitator. Later, we arranged an exercise in ethics where theparticipating farmers and wives were invited to discuss how to weigh upconflicting interests in certain stylized farming cases. Finally, the farmershave been together to discuss real cases concerning long-term planning ona farm.

    Some of the farmers have been engaged in long-term ethical budgeting.The longer term makes it possible to consider new investments. Roughly,the budgeting has involved an iterative planning process, in which initialsuggestions first gave rise to a number of alternative future produc-tion plans for further consideration. Researchers have then estimated theconsequences of these plans and presented their calculations to the farmer.The farmer has then adjusted the plans he still found interesting to hispreferences and has asked the researchers for new calculations, and so on.


    The prototype of ethical accounting for a livestock farm has beendeveloped in co-operation with twenty Danish cattle and pig farms. It hasbeen performed during three consecutive periods. After each presentationof accounts, there has been an external evaluation made by social scientists.In telephone interviews, the farmers have been asked about their opinionregarding the contents of the accounting statement and the presentation ofit on the farm. The farmers evaluation, as well as the research teams ownevaluation, have then been used to adjust the prototype for the next period.

    The results from the project are to be applied at different levels. Thus,the Danish livestock industry has been involved in the project, and thenational advisory system is expected to further develop the prototypefor direct commercial application. However, the farm level indicators foranimal welfare, environmental effects and resource use which have beendeveloped could also be used in other contexts. These methods are goingto be developed further in other research projects, in Denmark as well asin other countries.

    Supposing ethical accounting were offered to farmers on commercialterms, i.e. that they themselves were to bear the costs of using it, two


    questions naturally arise: Would farmers want to use ethical accounting?And would society benefit from farmers using ethical accounting?

    If there are good ethical reasons for changing the production practicein some way, it might be said to be the responsibility of the consumersto demand what they want in this regard, so that they bear the costs ofimproving production systems. Or, if public goods such as an accept-able level of animal welfare, or a better environment, are wanted bythe consumers, but cannot be provided by the market, it is arguably theresponsibility of governments to provide them through regulations oreconomic incentives.

    The individual farmers, on the other hand, are seriously constrained bya competitive market. They cannot afford but to make profit maximisationthe dominant criterion of choice; otherwise they will inflict costs on them-selves and may eventually have to go out of business. So why, one mightask, should an individual farmer want to engage in ethical considerationsand eventually act on them?

    It is true that farmers are not the only responsible agents involved inthe practice of animal agriculture. Food industry, retail trade, governments,and not least consumers, all make decisions affecting the total practice. It isindeed unreasonable to expect a single farmer to act in isolation from whatother responsible agents do, or to bear higher costs than his competitors.Major changes in production practice, therefore, can only come about if allparties are made to co-ordinate their decisions. In the end, it is hard to seehow this could happen without the introduction of economic incentives orsome other form of government intervention.

    Nevertheless, we believe that farmers might be motivated to engagethemselves in ethical accounting for at least two reasons. The firstreason is that farmers are likely to have ethical convictions of their ownconcerning their production practice. We believe that most farmers areconcerned about the welfare of their animals, want to protect the envir-onment, etc. Ethical accounting is intended to help the farmer organizehis production better according to his own values so that he can justify hischoices to himself and to other parties. The problem is to what degree hecan act on these convictions and still secure a reasonable living.

    However, the point of thinking explicitly about values is the possiblecreation of new alternatives that one would not otherwise have comeacross. Of course, economic considerations constrain the farmer. Even so,there will be room for choice between alternative courses of action, eachhaving approximately the same economic consequences, but one of thembeing significantly better than the others, from an ethical point of view. It isthe aim of ethical accounting to facilitate the search for such alternatives.


    But even if a farmer decides not to change his production practice, hewould probably benefit from a well-founded stand on the ethical problemswhen engaging in dialogue with, e.g., consumers.

    The second reason concerns uncertainty as regards the future. It issimply uncertain what form of production will turn out to be mostprofitable in the long run. When long term economic consequences ofinvestment choices are uncertain, farmers will have to base their choiceson what they believe to be valuable in the long run. Thus, uncertaintynecessitates reflection on which fundamental objectives the farmer wantsto achieve with his farm.

    Furthermore, as we mentioned in the introduction, ethical considera-tions can be expected to play an increasing role in the regulation of thestructural conditions for livestock production, on a national as well as on aninternational level. Awareness of the ethically relevant consequences of theproduction enables the farmer to improve his planning for the more distantfuture, and eventually to benefit from anticipating changes in demand orthe constitutional conditions of production. Ethical accounting offers thefarmer the opportunity to document the ethically relevant consequences ofhis actual performance. He could benefit from this opportunity either byimproved governmental support, by less restrictive legislation, or by higherprices on products.

    The focus of our research project is mainly on the potential of ethicalaccounting as a management tool for the individual farmer. However,we, as well as the participating farmers, are aware of further perspect-ives from the point of view of society. But would widespread use ofethical accounting guarantee that farmers start behaving ethically morecorrect? Probably not. It is still likely that many farmers would keep actingon the basis of narrow economic motives. Nevertheless, we believe thatby making information available on how other stakeholders are affected,ethical accounting will change the minds of at least some farmers. At thepresent stage, however, we can only hypothesize in this regard.

    We believe it to be in the interest of society that farmers engage inethical considerations. Whatever social policies and regulations societymight implement, if the farmers do not want to co-operate, because theyare not convinced by the underlying values, these measures are doomed tobe inefficient. On the other hand, farmers motivated to search for the bestpossible outcome under the circumstances will benefit any society.

    Furthermore, ethical accounting might help to make clearer theconflicts of interests as regards livestock farming by identifying the prob-lems that cannot be solved without higher costs of production. This might


    help governments to a more goal oriented use of economic incentives intrying to solve these problems.


    We are indebted to the work of Peter Pruzan and Ole Thyssen, Copen-hagen Business School. They originally conceived the idea of ethicalaccounting for organizations in a Danish context as a form of value-basedmanagement with an explicit ethical dimension. Even though we deviatesubstantially from their ideas, we have benefitted a lot from discussionswith them and their colleague Thorbjrn Meyer. (See Pruzan and Thyssen,1990 for an English introduction to their ideas.)

    Thanks are also due to all the other participants in the research project:Lis Alban, Niels Peter Bdsgrd, Carsten Enevoldsen, Niels Halberg,Karin Hjelholt Jensen, Torfi Johannesson, Erik Jrgensen, Erik SteenKristensen, Ole Kristensen, Lene Munksgaard, Bjarne K. Petersen, PeterSande and Ellen Margrethe Vestergaard.

    We would like to thank Peter Bogetoft, Anders Ringgaard, NielsHalberg, Peter Sande and particularly Alex Dubgaard and an anonymousreferee for helpful comments on earlier versions of this paper. Finally, wewish to thank the Danish Ministry of Agriculture and the Danish ResearchCouncils for financial support.


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    Karsten Klint JensenUniversity of CopenhagenDepartment of Education Philosophy and RhetoricNjalsgade 80DK-2300 Copenhagen S.DenmarkE-mail:

    Jan Tind SrensenResearch Centre FoulumDanish Institute of Agricultural ScienceDepartment of Animal Health and WelfareP.O. Box 39DK-8830 TjeleDenmarkE-mail: