Outbreaks of foot and mouth disease (FMD) result in a range of direct and indirect costs, and public opinion can play a significant role in response and outcomes. Those were key messages as Sebastian Heath, VetMB, PhD, branch chief of program development with the Federal Emergency Management Agency kicked off this week’s FMD Symposium in Louisville, Ky. The symposium, focusing on FMD preparedness, took place in conjunction with the National Institute for Animal Agriculture’s annual conference.
For his presentation, Heath drew upon his experience with several FMD outbreaks around the world. He recently published a 10-year retrospective on the 2002 FMD outbreak in the United Kingdom documenting short- and long-term impacts on rural communities.
If there were an outbreak in the United States, Heath says, we would recover and return to FMD status, but long-term effects in affected areas would be significant. People tend to focus, he says, on immediate costs associated with culled animals, but the impacts reach much further. Heath outlined four types of costs associated with FMD outbreaks;
- Transaction costs – These are the direct costs or additional costs of doing business in an outbreak, such as federal compensation for culled animals and interest on loans for recovery. In the UK outbreak, direct costs totaled around $2.4 billion.
- Lost revenue – These are indirect costs such as revenue not earned on depopulated herds, affects of quarantines on livestock species not affected by FMD and non-agricultural impacts such as loss of tourism.
- Marginal costs – Following an outbreak, new production costs kick in for producers and the industry overall. These could include new requirements for testing or record-keeping. Heath notes the surveillance costs for BSE in the United States as an example.
- Opportunity costs – These costs of choosing one option over another could be positive or negative. During the UK outbreak, for example, the government paid about $263 million less in export subsidies in 2002 than in 2001, about equal with the lost trade revenue. For years after the outbreak Heath says, waste management companies were doing lucrative business managing runoff and seepage from the sites where thousands of culled animals were buried. Someone was making money from the outbreak, it just wasn’t farmers. Eventually, some of the burial sites, which formerly were in agricultural production, became National Trust land for recreation and wildlife habitat.