The economic impacts of foot and mouth disease – What are they, how big are they and where do they occur?

Abstract

Although a disease of low mortality, the global impact of foot and mouth disease (FMD) is colossal due to the huge numbers of animals affected. This impact can be separated into two components: (1) direct losses due to reduced production and changes in herd structure; and (2) indirect losses caused by costs of FMD control, poor access to markets and limited use of improved production technologies. This paper estimates that annual impact of FMD in terms of visible production losses and vaccination in endemic regions alone amount to between US$6.5 and 21 billion. In addition, outbreaks in FMD free countries and zones cause losses of >US$1.5 billion a year.FMD impacts are not the same throughout the world:FMD production losses have a big impact on the world's poorest where more people are directly dependent on livestock. FMD reduces herd fertility leading to less efficient herd structures and discourages the use of FMD susceptible, high productivity breeds. Overall the direct losses limit livestock productivity affecting food security.In countries with ongoing control programmes, FMD control and management creates large costs. These control programmes are often difficult to discontinue due to risks of new FMD incursion.The presence, or even threat, of FMD prevents access to lucrative international markets.In FMD free countries outbreaks occur periodically and the costs involved in regaining free status have been enormous.FMD is highly contagious and the actions of one farmer affect the risk of FMD occurring on other holdings; thus sizeable externalities are generated. Control therefore requires coordination within and between countries. These externalities imply that FMD control produces a significant amount of public goods, justifying the need for national and international public investment.Equipping poor countries with the tools needed to control FMD will involve the long term development of state veterinary services that in turn will deliver wider benefits to a nation including the control of other livestock diseases.

Cost-benefit analysis of foot and mouth disease control in Ethiopia

“…This GDP proportion is slightly higher than the 0.10% estimate for Africa that was made based the annual FMD loss estimates of Knight-Jones and Rushton (2013). The current estimated costs of the disease can be considered conservative as it excludes some costs of the disease such as reproductive loss, loss of condition in fattening animals, losses related to chronic forms of the disease, losses in small ruminants, and indirect costs such as use of suboptimal technology due to fear of the disease.…”

“…Despite the recognition of FMD as the most important livestock disease in the world, the economic return from its control is not always positive in all countries (Knight-Jones and Rushton, 2013). In FMD free countries, control of outbreak incursions involves huge costs (0.3-0.6% of GDP), but generates positive returns to the national economy (Knight-Jones and Rushton, 2013).…”

“…In FMD free countries, control of outbreak incursions involves huge costs (0.3-0.6% of GDP), but generates positive returns to the national economy (Knight-Jones and Rushton, 2013). In endemic countries, the economic returns of control depend on the prevailing production systems and the export potential of the country.…”

“…Economic returns from FMD control are considered more beneficial to commercial production systems than to subsistence systems (Perry et al, 2003;Rushton, 2009Rushton, , 2008. Moreover, in countries with limited export, the control has to be targeted to high risk regions or sectors to generate positive economic returns (Knight-Jones and Rushton, 2013).…”

“…Highly contagious diseases such as FMD are not easily contained and generate serious externalities as they create problems to all livestock owners who are connected to an infected population. These externalities imply that a coordinated FMD control produces a significant amount of public goods, justifying the need for a national public investment (Ekboir, 1999;Forman et al, 2009;Knight-Jones and Rushton, 2013). However, before embarking on large scale control the economic profitability of the control has to be examined and the most profitable option has to be chosen among the available alternatives.…”