Resource Institute: A
U.S. & International Resource on the Scope of Humanitarian Assistance
Director of Research
Resource Institute Biodefense Reference Library
Animal and Zoonotic Disease Center
USA: (203) 668-0282 Western USA: (775) 884-4680
APHIS ECONOMIC DISCUSSION &
RECOMMENDATIONS TO PROTECT THE US ECONOMY AND AGRICULTURAL INDUSTRY
According to the report:
the Economic Impact of Foot and Mouth Disease in the UK: Results from
the Nottingham Model, Christel DeHaan Tourism and Travel Research Institute,
Nottingham University Business School, University of Nottingham:
The Nottingham Model of the
UK includes production relationships for 115 sectors of the economy and
markets for 115 goods and services. Detailed data on tourism demand in
each region of the UK provide the ability to assess the effects of FMD
on tourism. The Nottingham model quantifies the links between sectors,
between government, households, firms and other institutions. It includes
direct, indirect and induced impacts of tourism demand and agricultural
restrictions, as well as labour market, capital market, and foreign exchange
market links between sectors. It does this through a modelling technique
known as computable general equilibrium, which simultaneously computes
economic models of each sector and market.
The Nottingham Model results
The agricultural export ban
of restricted products affects exports worth £923 million per year.
This export ban will lead to a reduction in GDP of £563 million per
year for as long as the export ban is in place. The main results assume
that the export ban will be lifted by the end of the year 2001.
The effects of FMD on domestic
tourism will reduce annual expenditures of domestic tourists by £1.5
billion and of same-day visitors by £3.6 bn. The main results assume
that domestic and same-day visitor revive when the restrictions on movement
are fully removed, with a limited follow-on effect in 2002.
FMD has reduced international
tourist receipts by £2.3 bn annually. This corresponds to 19% of
the level that tourism receipts would have been in 2001 in the absence
of the FMD crisis. Reductions in visitors are the largest in the UK’s largest
source market, North America, where visitor expenditures have fallen by
26% compared with the level that they would have reached without FMD. The
main results assume that international visitor numbers start to pick up
Total expenditures by tourists
and day visitors in the UK will fall by £7.5 billion in 2001 as a
result of FMD. The largest reductions in domestic travel expenditures are
in Scotland (£2 bn per year), London (£1.3 bn) and the Midlands
(£1 bn). These relative sizes reflect the size of tourism in different
regions of the country, the evidence of domestic tourism reductions in
each region, the reliance on international (and in particular North American)
tourists as well as the seasonality of tourism in each region.
The damage to tourism firms
is likely to be highest in Cumbria, Scotland and Wales. The percentage
reduction in expenditures due to FMD is highest in these regions. Cumbria
will lose 31% of its tourism revenues in 2001.
Overall, GDP will fall
by £2.5 bn in 2001 as a direct result of the FMD crisis. This will
be followed by a smaller fall in GDP (of £1.46 bn) in 2002. The largest
part of this fall in GDP is accounted for by the effects of tourism expenditure
reductions, which will reduce GDP by £1.93 bn in 2001.
Value added in the hotels and
restaurants sector falls by £2.0 bn as a result of the tourism reductions
associated with FMD. The size of the falls in income in this and other
tourism-related sectors are far higher than the reduction of earnings in
agriculture and its related sectors. Farm earnings fall by £60 million
after compensation payments for slaughtered animals have been received.
Value added in transport sectors falls by a total of £1.4 bn; in
recreation and entertainment sectors value added falls by £245 million.
The reduction in value added in the hotels and restaurants sector alone
is larger than the total earnings in 2001 from clothing manufacturing in
Given these results:
Tax revenues will fall by a
total of £581 million in 2001, and by £379 million in 2002.
These tax revenue falls are a consequence of reductions in the levels of
economic activity following the FMD crisis. Including the estimated £1.4
bn to be paid to farmers in compensation payments, the government stands
to lose around £2.4 bn over two years.
The danger of a re-occurrence
of the FMD crisis risks large-scale damage to the UK’s tourism sector.
A cost-benefit analysis of the danger of re-occurrence would be inadequate
if it did not quantify the likely effects on tourism.
Government policies relating
to FMD should be re-examined in the light of the costs of the disease to
the tourism sector. This applies both to policies that influence the risks
of future outbreaks and to policies that are in place to contain the current
The policy of vaccination should
be re-examined to take into account the benefits that vaccination would
bring to the tourism industry, not just in avoiding a re-occurrence
of the FMD crisis, but also in allowing tourism-related businesses to plan
in the knowledge that under a vaccination programme the crisis would not
A vaccination programme would
also prevent the adverse effects on the welfare of the entire UK population
– who have viewed the effects of FMD at first or second hand.
The closure of footpaths in
the countryside in response to the FMD outbreak should be re-evaluated
in the light of the costs that this policy imposes on other sectors of
the economy as well as on scientific evidence relating to the likelihood
of walkers passing FMD between animals.
Note: At the present time, the
United States Foot and Mouth Disease Federal Response Plan encompasses
the policy of eradicating the disease by depopulating affected and exposed
animals with no alternative policy for vaccination. Reference to the lack
of a vaccination policy is significant in the light of current reports
from the UK which recommend the implementation of a vaccination strategy
for future outbreaks of foot-and-mouth disease due to the uncontrolled
spread, economic costs and change in the macro view of the current epidemic
Planning for a Multi-State FMD Outbreak Crucial to Avoiding a UK Level
Uncontrolled Epidemic of Foot and Mouth Disease in the United States).
UK agricultural policies (and
more generally, any policy that relates to a particular part of the economy)
need comprehensively to consider the costs and benefits to other areas
of the economy.
USDA ANIMAL AND PLANT
HEALTH INSPECTION SERVICE ANIMAL DISEASE RISK ASSESSMENT, PREVENTION AND
The following USDA APHIS release focuses
on the subject of economic impacts on the national, state, local economies
and agricultural industry that would be directly associated with a Foreign
Animal Disease Outbreak into the United States (see: FMD
US Economic Discussion & Producers Crucial Role in a Successful Eradication
Tuesday, August 07, 2001 4:32 PM EST
Washington, DC, Aug 07, 2001
DEPARTMENT OF AGRICULTURE Animal and
Plant Health Inspection Service Animal Disease Risk Assessment, Prevention,
and Control Act
USDA APHIS is seeking comments and
suggestions regarding the development of a report required by the Animal
Disease Risk Assessment, Prevention, and Control Act of 2001. The report
will discuss the economic impacts that would be associated with the potential
introduction of foot and-mouth disease, bovine spongiform encephalopathy,
and related diseases into the United States; the potential risks posed
by those diseases to public and animal health; and recommendations to protect
the health of animal herds and U.S. citizens from those risks. We will
use the information gathered through this notice and a public meeting to
assist us in developing this report.
DATES: We invite you to comment on
this docket. We will consider all comments that we receive by September
6, 2001. We will also consider comments made at a public meeting that will
be held on August 24, 2001 from 9:00 a.m. to 12:00 p.m. AGENCY: Animal
and Plant Health Inspection Service, USDA. ACTION: Notice of public meeting
and request for comments.
8.14.2001 (EIDNET) APHIS
Economic Discussion & Recommendations to Protect the US Economy and
Agricultural Industry A Review of the Study of the Economic Impact
of FMD in the UK by the Nottingham University Business School, University
of Nottingham and current efforts by USDA APHIS to develop a report required
by the Animal Disease Risk Assessment, Prevention, and Control Act of 2001.
FMD US Economic Discussion & Producers Crucial Role in a Successful
Eradication Campaign Includes note on consequential losses
and the equestrian industries contribution to the US GDP.
Planning for a Multi-State FMD Outbreak Crucial to Avoiding a UK Level
Uncontrolled Epidemic of Foot and Mouth Disease in the United States
In the United States, if ground zero of an FMD outbreak were to occur at
an auction barn where the movement of animals included transport to multiple
states, all movements for three day window, in which animals are infectious
prior to symptoms, plus the time needed for an official confirmation would
require tracking, implementation of the appropriate response plans and
Agricultural Statistics Service: Agricultural Statistics 2001...Cattle,
Hogs & Sheep
Exercise 2000: Final
US Reports & Summaries - Canada - Mexico - United States
Foreign Animal Disease Response Simulation Exercise.
Texas Prepares for Emergency Animal Disaster Ground Zero: Tripartite
Information sources, papers, articles.
14 Points: Foot & Mouth Preparedness - USA (06) Lessons learned
from other countries and a collection of necessary points which need to
be addressed as part of any plan in the United States.
Animal Health Emergency System: Current Disease Issues/Natural
Disaster Issues, Ag Bioterrorism Concerns, OIE Reportable Diseases, Strategic
Plan, Steering Committee, State Standards, Training Opportunities.
to the Foot & Mouth
Disease Reference Library
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