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Market Impact of FMD Control Strategies: A UK Case Study

Siyi Feng, Myles Patton and John Davis

No 258658, 91st Annual Conference, April 24-26, 2017, Royal Dublin Society, Dublin, Ireland from Agricultural Economics Society

Abstract: Foot and Mouth Disease (FMD) poses a serious threat to the agricultural sector due to its highly contagious nature. Outbreaks of FMD can lead to substantial disruptions to livestock markets due to loss of production and access to international markets. In a previously FMD-free country, the use of vaccination to augment control of an FMD outbreak is increasingly being recognised as an alternative control strategy to direct slaughtering (Stamping-Out). Specific choice of eradication strategies depends on their costs and benefits. Economic impact assessments are often based on Benefit-Cost frameworks, which provide detailed information on the changes in profit for a farm or budget implications for a government (Rich et al., 2005). However, this framework cannot capture price changes caused by the outbreak. Market equilibrium and hence prices are expected to change due to the outbreak as both production and demand (especially export) would be disrupted. The implications of a particular control strategy on the different market aspects can be positive or negative. Therefore, modelling systems able to capture the market impacts are needed for strategy evaluation. This paper provides assessment of sectoral level impacts of the eradication choices of FMD outbreaks, which are typically not available from Benefit-Cost frameworks, in the context of the UK. The FAPRI-UK model, a partial equilibrium model of the agricultural sector, is utilised to investigate market outcomes of different control strategies (namely, Stamping-Out, and Vaccinate-to-Die) in the case of FMD outbreaks. The outputs from the simulations of the EXODIS epidemiological model (number of animals culled/vaccinated and duration of outbreak) are used as inputs within the economic model to capture the overall price impact of the animal destruction and export ban.

Keywords: Agricultural and Food Policy; Health Economics and Policy; Livestock Production/Industries (search for similar items in EconPapers)
Date: 2017-04-26
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DOI: 10.22004/ag.econ.258658

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