PETER CAVE: By 2008, most egg producers around Australia will be required to increase cage sizes from 450 square centimetres per bird to 550 square centimetres, in an effort to improve conditions for battery hens.

The new law means that farmers will have to build bigger sheds, sell their businesses, or move to new sites, all of which they say is prohibitively expensive for an industry already in decline.

Emma Alberici reports.

EMMA ALBERICI: Australia's $300-million a year egg industry is facing its biggest change in 25 years. It will improve conditions for the country's laying hens, but it could send hundreds of farmers to the wall.

WARREN STARICK: There used to be 80 producers in South Australia about three, four years ago, and I'd say in 2008 we'll probably be down to about 10, at the most.
WARREN STARICK: The investment is literally millions of dollars, and so that uncertainty's contributed, plus of course what happened when the new legislation was announced, equity in our farms virtually disappeared overnight.

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