Published 14/05/2014

A bank partially funded by the EU taxpayer is investing in factory farming in Turkey and other countries outside the Union, meaning public money is being used to fund animal cruelty, social injustice and environmental degradation.

A new investigation by Compassion in World Farming into the investments of the European Bank for Reconstruction and Development (EBRD) has revealed poor animal welfare on a factory farm in Turkey and funding for factory farming projects in Ukraine.

The investigation reveals a reality far removed from the EBRD’s much trumpeted claims to fund socially and environmentally sustainable development.

The animal welfare abuses uncovered by the investigation were so bad that, if carried out in the EU, they would have breached EU law.

The food company which owns the farm in Turkey, Keskinoğlu was granted a €30million loan for expansion and upgrades.

Keskinoğlu exports to 75 countries and is the first Turkish firm exporting processed chicken products to EU countries (chicken meat from 2009, and eggs from 2012).

This raises the prospect of factory farmed products – produced in ways that breach aspects of EU animal welfare law – financed by the EBRD ending up on EU supermarket shelves, potentially undercutting the Union’s farmers.

Compassion in World Farming’s CEO, Philip Lymbery, says:

This will rightly appal many people. EU tax payers are effectively funding the export of the factory farming model, with the possibility that the Union’s farmers could be undercut by products from the projects that are being funded.

The EBRD makes much of the sustainability criteria it applies to its funding. We think the reality is very different.

Members of Compassion’s Investigations Unit witnessed shocking handling and loading of broiler chickens at a Keskinoğlu farm, handling that would be illegal in the EU. 

They saw crates packed with live chickens being tossed carelessly into a truck – sometimes a crate slid off the top of a pile of crates, tumbling several feet to the ground.

They also saw a catcher throwing chickens roughly into crates. Workers used crates full of live chickens as a step while loading others onto the truck. This inhumane handling makes a mockery of the company's plans to modernise live broiler handling, something that is listed as part of the expansion plan financed by the EBRD loan.

A river close to the discharge of a Keskinoğlu slaughterhouse and processor unit was visibly polluted. It ran dirty with thousands of chicken feathers and an overpowering stench of sewage. Investigators documented both chicken feet and slaughterhouse processing gloves floating in the river or caught up in river bank debris.

An open waste ground accessible to the public was found at the rear of one of Keskinoğlu 's laying hen operations. It was strewn with chicken carcasses, feathers, plastic materials and discoloured pools of wastewater.

The company’s marketing appears to bear little resemblance to the reality of their intensively reared chicken and egg production. Comic strip-style images depict happy chickens playing outdoors and advertising boards outside their industrial units show farmers walking chickens through lush fields. In reality many of their chickens will not be allowed outdoors.  Such marketing would be illegal under EU law, which prohibits misleading labelling and adverts.

The EBRD granted €218 million to 11 projects in the farm animal sector between 2002 and 2011, with the funding covering 43% of project costs on average.

The EBRD launched operations in Turkey in 2008. In 2013, the Bank signed its first deal with a primary agricultural production company in the country, stating that agribusiness has a higher potential for growth in Turkey than other sectors.

All 28 EU member states invest in the EBRD along with the EU as a separate investor.

Ukraine

In western Ukraine, Danish firm Danosha, a subsidiary of the Danish Axzon Group, operates industrial pig farms. In February 2014, the EBRD announced €35million in loans to help the firm’s expansion in the country.

The EBRD has also provided funding to a home-grown Ukrainian company. Myronivsky Hliboproduct (MHP) is the first Ukrainian agro-industrial conglomerate to be listed on the London Stock Exchange. In December 2013 the EBRD announced it was granting a €40m loan to MHP to support the expansion and diversification of the group’s farming activities.

The loan was granted  to increase the capacity of its Vinnytsia chicken complex. When finished, this facility will house up to 35m chickens at one time in a staggering 1,824 rearing houses, making it one of the world’s biggest poultry farms.

The EBRD makes great virtue of its position as “the first Multilateral Development Bank which has an explicit requirement in its mandate to ensure environmentally sound sustainable development in the full range of our investment activities”.

The evidence shows that in these cases the reality is far from the marketing gloss.

Compassion is calling for the EBRD to stop funding factory farming. 

Philip Lymbery adds:

We need an urgent rethink of EBRD funding policies in agriculture.  EU taxpayers’ money should not be used to finance factory farming which is inhumane, harmful to the environment and– because it entails feeding human-edible cereals to animals – an inefficient way of feeding the growing world population.

EBRD funding should instead support grazing systems and integrated crop/livestock farming as these can be environment- and animal welfare-friendly and can enhance the livelihoods of small-scale farmers.

After lobbying by Compassion and other groups, last week the EBRD introduced an explicit policy statement on animal welfare; EBRD livestock investments will now have to meet EU farm animal welfare standards at a minimum. Whilst this is welcome, EU welfare standards still allow for highly intensive farming.

Compassion stands among the growing group of vocal critics against factory farming. As the weight of scientific evidence, along with our investigation, show, factory farming can lead to a range of problems, including animal cruelty, social injustice and environmental degradation. We call on the EBRD to stop funding factory farming.

Find out more

• Watch the video of our investigation in Turkey

• Get the full details on how your taxes are funding factory farming