The costs and benefits of animal disease prevention: The case of african swine fever in the us

Abstract

Potential damage from animal diseases, especially epizootics such as foot-and-mouth disease, hog cholera, and African swine fever, are great, but largely unknown. The recent example of Taiwan's pork industry suffering a major, and likely permanent, setback with the discovery of FMD brings home the importance of the issue. The last major hog disease to be an ongoing problem in the United States was hog cholera, a disease responsible for killing an estimated 7.5% of the US national herd annually. Now, mostly because of the General Agreement of Tariffs and Trade (GATT) and the expected increase in trade that it will bring, especially in agricultural goods, there have been renewed calls for economic analysis of consequences of an animal disease outbreak. In this paper we use a flexible and simple technique to assess the likely damage from an outbreak of African swine fever, a potentially devasting disease, in the United States and the benefits of its prevention by the Swine Health Program. The paper combines economic and biological models to assess the social costs and benefits of disease prevention. A dynamic simulation model of the hog and pork sector accounts for producer decision-making and assesses the costs, while epidemiological spread is incorporated using a state-transition matrix. Five outbreak scenarios and their associated probabilities of occurrence are used to aggregate a range of possible outcomes. Results indicate that the benefit cost ratio for the current prevention program is high, over 450. The net benefit of prevention efforts was estimated to be almost $4,500 million at a cost of $10 million for the 10-year period considered. The model framework developed allows the estimates to be revised by hand or with a spreadsheet, given new probability estimates on the likelihood and size of outbreaks. Slight modifications would allow the analysis of other hog diseases such as hog cholera. Impacts of diseases that affect other species or multiple species, such as FMD, would require a new or more complex live-stock model.