Market Impact of Foot-and-Mouth Disease Control Strategies: A UK Case Study.

Siyi Feng,John Davis,Myles Patton

doi:10.3389/fvets.2017.00129

Siyi Feng, John Davis + Show 1 more

Open Access

https://doi.org/10.3389/fvets.2017.00129

Copy DOI

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 recognized as an alternative control strategy to direct slaughtering [stamping-out (SO)]. The choice of control strategy has implications on production, trade, and hence prices of the sector. Specific choice of eradication strategies depends on their costs and benefits. Economic impact assessments are often based on benefit–cost framework, which provide detailed information on the changes in profit for a farm or budget implications for a government (1). However, this framework cannot capture price effects caused by changes in production due to culling of animals; access to international markets; and consumers’ reaction. These three impacts combine to affect equilibrium within commodity markets (2). This paper provides assessment of sectoral level impacts of the eradication choices of FMD outbreaks, which are typically not available from benefit–cost framework, in the context of the UK. The FAPRI-UK model, a partial equilibrium model of the agricultural sector, is utilized to investigate market outcomes of different control strategies (namely SO 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, export ban, and consumers’ response.

Highlights

Foot-and-mouth disease (FMD) poses a serious threat to the agricultural sector due to its highly contagious nature, which can lead to substantial disruptions to livestock markets
The more severe the disease outbreak, the greater the negative price impact, as demonstrated by comparing the median and 95% percentile versions of the scenarios. While the latter results in the culling of more animals compared to the former, which exerts an upward impact on price, this is more than offset by the market impacts of the longer duration of the export ban
The response is unlikely to be instantaneous. The results of this analysis indicate that the price and value of output impacts are lower under V-t-D compared to SO. This conclusion holds when longer term impacts are taken into account

Summary

INTRODUCTION

Foot-and-mouth disease (FMD) poses a serious threat to the agricultural sector due to its highly contagious nature, which can lead to substantial disruptions to livestock markets. Under the V-t-D strategy, Market Impact FMD Control UK vaccinated animals are culled. When Argentina used vaccination to eradicate FMD in the early 2000s, the economy experienced severe downturns during this period, making it difficult to isolate the market impacts of the control strategy. This paper investigates the market impacts of the strategies of SO versus V-t-D in FMD control in the case of the UK using a partial equilibrium modeling framework. Outputs from the simulations of the EXODIS model (number of animals culled/vaccinated and duration of outbreak) are used as inputs within the FAPRI-UK model to capture the price impact of the destruction of animals and restrictions to internal trade. We begin with a review of the literature in Section “Literature Review.” This is followed by descriptions of the economic partial equilibrium model, the FAPRI-UK model and alternative scenarios in Section “Model and Scenarios.”. We begin with a review of the literature in Section “Literature Review.” This is followed by descriptions of the economic partial equilibrium model, the FAPRI-UK model and alternative scenarios in Section “Model and Scenarios.” The results are presented in Section “Results” and conclusions are drawn in Section “Summary and Discussion.”

LITERATURE REVIEW

RESULTS

SUMMARY AND DISCUSSION