Economic Analysis of the Policy for Accreditation of Dairy Farms Free of Bovine Brucellosis and Tuberculosis: Challenges for Small and Large Producers in Brazil

Abstract

One of the cornerstones of the National Program for Control and Eradication of Bovine Brucellosis and Tuberculosis in Brazil is the voluntary accreditation of free herds. We developed a stochastic cost-benefit analysis model for two types of dairy herds (high yield Holstein-Zebu crossbred females and lower productivity smaller scale herds) to identify the technical and economic constraints of this process. The initial prevalence of infected animals and the impact of the disease in the structure and performance of the herd were derived from secondary data. Information on the costs and benefits of herd sanitation were compiled into a cost-benefit model at the herd level. The last step consisted of a scenario simulation to evaluate the impact of alternative policies to the certification process. For each scenario, we calculate the probability over time of a Benefit-Cost Ratio greater than 1 and of an Internal Rate of Return above 1% (the discount rate used in the model). Results show that larger and more intensive dairy farms, and also herds affected by brucellosis compared with tuberculosis-positive herds, are more likely to achieve financial gains from the certification investment. The compensation for culled animals is important in the initial phase of herd sanitation and the premium payment on milk would help farmers to achieve a return on the investment over time. The model can be adapted to different and dynamic production, epidemiological and economic settings.

Risk of Introduction of Bovine Tuberculosis (TB) Into TB-Free Herds in Southern Bahia, Brazil, Associated With Movement of Live Cattle

“…In addition, the need for risk-based surveillance should consider herds with a previous history of the disease, which is pointed out in several studies as an important risk factor for the occurrence of TB ( 13 , 14 ). Our results indicate that the risk of introduction of infected animal into free herds of Southern Bahia is very low, despite the wide range of values used in the model to represent the uncertainty about sensitivity of the CCT ( 5 ). However, it should be stressed that the implementation of a test-and-slaughter policy in the region may warrant the use of the single intradermal test, which is more sensitive and may be the best method of choice for use in the final stages of TB control.…”

“…These are highly variable. Minimum, most likely, and maximum values for the Se of the CCT were estimated as 0.5, 0.807, and 0.98, respectively ( 5 ).…”

“…However, the number of certified properties in Brazil is negligible, with only 798 TB-free certified farms in 2016, out of a total of about two and a half million cattle farms. The number of TB-free certified farms in Brazil is low because there are not enough direct financial benefits for the farmer and certification costs are high ( 4 , 5 ). Compensation for culled animals is important in the initial phase of herd sanitation and the premium payment on milk would help farmers to achieve a return on the investment over time, none of which is so far available to the vast majority of cattle farmers in Brazil ( 5 ).…”

“…The number of TB-free certified farms in Brazil is low because there are not enough direct financial benefits for the farmer and certification costs are high ( 4 , 5 ). Compensation for culled animals is important in the initial phase of herd sanitation and the premium payment on milk would help farmers to achieve a return on the investment over time, none of which is so far available to the vast majority of cattle farmers in Brazil ( 5 ). Similarly, the adoption of a TB-free seal in milk packaging has been suggested as a way to add value to dairy products ( 6 ).…”

An interdisciplinary approach to the economics of animal health: Introduction

“…Henessey and Wolf () present a modelling approach of principal‐agent issues to explore the weaknesses of managing endemic disease, and Gilbert & Rushton () extend this with a review of the different applications of economic and social science research to incentives to participate in disease control management. A final paper (Leite et al ., ) looks at a much more practical application of economics in decision making process for the management of brucellosis and tuberculosis with a classic use of cost benefit analysis methods.…”