Government intervention leads to market failure?

[oli]

There's a piece of data to look at:

'In 1861, Mrs Beeton, the then authority on cookery and household management and the Victorian equivalent of Delia Smith, wrote that her readers should always make their own vinegar. This was because shop bought vinegar of the day tended to consist of diluted sulphuric acid.
Today, food manufacturers and retailers are so strictly controlled by government regulations that this could not happen. Some argue, though, that such regulations are excessive. Government red tape restricts the opening and running of new businesses. Consumers have to pay higher prices for their food because it costs firms money to conform to government regulations. For instance, in 1999, costs of production to UK pig farmers went up because they could no longer rear pigs in stalls. Animal welfare activists would like to see battery hen production stopped and all chickens reared in free range conditions, but why shouldn't consumers have the choice about whether or not they buy cheaper battery produced eggs and chickens?'

Ok, the question:
Discuss whether, in the examples given in the data, government intervention leads to market failure.
My answer:

The underlying motive for government intervention in the data examples is to improve the quality of food for consumers. In terms of economic welfare, government intervention does lead to market failure in the data; resources are in effect 'wasted' for potential businesses who do not conform to government specifications and hence cannot open and run business. Consumers end up paying more for food products since firms incur more cost conforming to government regulations, whereas they could be paying less.
Looking at things from a non-purely financial perspective, it may be of benefit to the consumer to eat healthy, naturally well developed chicken meat from chickens that have been able to use their muscles to forage in free range conditions. This is as opposed to those who spend their lives crammed against each other in cages unable to support themselves on their legs due to lack of movement, having their beaks clipped to prevent them from attacking one another in such a crammed environment, never seeing the light of day, unable to maintain hygiene, being injected with water/steroids to increase their weight (along with other substances not naturally found in chicken meat), producing eggs of lower nutritional quality than free range and generally being subject to an abominable state of being that no creature should have to experience.
As to why consumers shouldn't 'have the choice about whether or not they buy cheaper battery produced eggs and chickens'; most consumers are swayed by price, they are not choosing to buy battery produced - if free range were cheaper then that would be the preference. The reason why battery produced is cheaper is because it does not incorporate the cost of animal welfare in production as there is none (meaning a negative externality somewhere along the line). Buying such goods will encourage mal-practice and intensive farming methods and applied to all things, the ethos of 'exploiting everything to the hilt' for economic (meaning primarily financial) welfare will lead to degradation of the environment and irreversible social costs.
Higher prices for animal products ensure better quality produce for consumers and decent living standards for the animals that produce comes from. Without government intervention, producers could apply whatever rearing methods they want to result in greatest economic returns, with consumers ingesting things they aer unaware of; similar scenario to the 'diluted sulphuric acid' vinegar. If consumers were made more aware of what, say, battey farming looks like, perhaps paying a bit extra for free range might also give them a clearer consience.
Bearing in mind that government is supposed to act for the good of the people it governs (which primarily consists of wellbeing) government intervention, in this case to set benchmarks for food standards does not lead to market failure; there is no misallocation of resources in my view.'

So that's my answer. I'm worried it's a bit long and also that I probably sound too much like an animal rights activist, given that this is an Economics question.
If anyone would take the time to provide feedback that would be very helpful,
many thanks

[Sipra M]

Govt. intervention is required :
* when market economy fails to work.
* to maximize social gain.
* to redirect the National resources in a socially desired way.
* to control economic power in the hands of the few.