Economic assessment of foot-and-mouth disease outbreaks in Brazil

Abstract

AbstractFoot-and-mouth disease (FMD) outbreaks in cloven-hoofed animals cause substantial economic impacts because of animal depopulation, increased government spending on control, eradication and surveillance measures, and bans on international trade. This study employs a computable general equilibrium (CGE) modeling framework in tandem with results from an epidemiological model to evaluate the economic consequences of a hypothetical FMD outbreak in Brazil. FMD-induced productivity losses and restrictions on international trade of livestock and meat products are applied as exogenous shocks in the economic model. Results show increased bilateral trade of beef and pork, mainly in South America, North Africa, and Russia. Simulated welfare losses in Brazil range from $132 million to $271 million depending on the severity of trade restrictions imposed. This study expands the rich literature on animal health economics. Results highlight the importance of maintaining the health of Brazilian herds, especially when considering Brazil's position as one of the main meat suppliers in the international market.