The economic impacts of transboundary pests and diseases can be complex and go beyond the immediate impact on the directly affected agricultural producers. Some of the possible effects are illustrated in Figure 36. In specific cases, the actual economic impact will vary depending on factors such as the type of transboundary pest or disease, but the complexity of the effects often makes precise measurement of the economic impacts very difficult.
The most direct economic impact of a transboundary pest or disease is the loss or reduced efficiency of agricultural production - whether it be of crops or animals - which reduces farm income. The severity of the economic effect will depend on the specific circumstances. If the farm economy is relatively diversified and other income opportunities exist, the burden will be reduced. Conversely, if the local economy is heavily dependent on one or a few vulnerable commodities, the burden may be severe and local food security impaired.
The impacts of reduced productivity on crops or animals can be long-lasting. Pest infestations can impair fertilization rates or seed recovery, while pesticide applications can harm soil and water fertility. Diseases can have lasting effects on livestock output in a number of "hidden" ways (such as delays in reproduction, leading to fewer offspring and the consequences of a reduced population) which often exceed the losses associated with clearly visible illness.
Although the loss of output from a transboundary pest or disease may appear easy to identify, it can nevertheless be difficult to measure in precise economic terms. Indeed, such an economic evaluation should not simply measure the value of lost output by multiplying estimated physical loss by the market price. This may exaggerate the likely economic impacts of damage. Actual economic impacts also depend on adaptation by farmers as well as possible market adjustments. Among the ways in which farm communities can respond are replanting, releasing stocks or selling assets and engaging in non-farm income earning activities.
For these reasons, the welfare loss may be less than the value of lost output.11 Only if the farmer livelihood responses are very restricted, or the community economy is heavily dependent on the commodity affected by the pest or disease, are the welfare losses likely to exceed the value of lost output.
Furthermore, the difficulty of distinguishing the production impacts of pests from other impacts - such as climate - has not been effectively overcome. Often, pest infestations and disease epidemics coincide with changes in climatic conditions, such as drought, early rains and other output-reducing events. The lack of record-keeping by farmers in developing countries adds to the uncertainty about how much a given change in production is attributable to pests or diseases, to weather, to farm management, or to other variables.
In addition to impacts on production, there can be variations in prices, which are determined by the supply and demand effects induced by a transboundary pest or disease. Market effects can similarly induce variations in wages for farm and processing employment and can otherwise spread through to upstream and downstream activities. Depending on the market for the affected agricultural products, an infestation or outbreak can lead suddenly to higher prices (if most production is domestically consumed), or to lower prices (if most production is exported and quarantine prevents such export but not domestic consumption.) The relative effects of the production shortfall on producers and consumers depend on the relative elasticities of demand and supply, in other words the responsiveness of demand and supply to price changes. Negative price effects can also occur where consumer health concerns lead to reductions in demand.
Through the demand channel, introduced pests and diseases (mainly quarantine plant pests and animal diseases) can have major implications for farmers and countries that either produce for export or plan to export. Countries that are free from major pests and diseases will tend to protect their local agriculture by totally excluding the importation of products from areas affected by pests and disease or by making importation conditional to a series of precautionary measures. These trade implications of a transboundary pest or disease can have a greater economic impact than direct production losses. Conversely, the benefits of eliminating a transboundary pest or disease can be very large. The desire to gain access to high-value export markets is the driving force behind many plant and disease eradication efforts.
Transboundary pests and diseases can often have significant negative impacts on food security and nutrition in developing countries. The growth of international trade in agricultural produce buffers the potential impacts on food availability, but there can still be major impacts on poorer communities that do not have access to substitute supplies. The food security impact is the paramount concern of many national policy-makers in developing countries and provides one of the main arguments in favour of international assistance for control programmes.
The main threat to human health arises from zoonotic diseases. Such contagion appears to have increased in recent years, perhaps owing to increasingly intensive livestock production in areas of proximity to human populations.12
Increasing concern is arising over threats to the environment, either from pests themselves or from the control measures used against them. Control measures have become a matter of serious concern since attention has focused on pesticide dangers and stockpiles of unused pesticides. There is also growing concern about invasive species, brought in by trade or movements of people, which dominate or otherwise harm the native ecology.
There are also budgetary implications of transboundary pests and diseases. Control measures generally involve budgetary outlays, including for inspection, monitoring, prevention and response costs. Demand is also often put on governments to extend financial assistance to the affected producers. The costs of some of these measures are proportional to the size of the agriculture sector being protected, while others are less closely related. Regarding the benefits of control measures, the benefits of prevention and emergency preparedness are generally not directly apparent, as they depend on assumptions about avoided costs of infestations and outbreaks.
Published literature on the economics of transboundary animal diseases and their control is relatively scarce.13 A certain amount of unpublished literature exists, but it has a specific emphasis on the commodities that are most important for individual countries. Data on crop losses from pests are not very reliable in developing countries and have generally been derived from site-specific tests rather than from systematic research sponsored by governments.14
The existing literature is mainly focused on a small number of individual developed countries, concentrated on one affected commodity, and specific to a particular outbreak incident. It suffers from several serious omissions. Analyses in economic impact studies are often limited to effects on production, with relatively little regarding subsequent impacts on prices, trade or secondary and tertiary market effects. Neither do they include information on farmers' adaptation to the pest or disease problem. The literature rarely includes costs of international control activities, externality costs either of outbreaks or control efforts, or infrastructure costs. Longer-term impacts, the dynamics of response to outbreaks and farmer or community adaptation are also universally lacking.
Box 6 THREE STEPS TO ANALYSE IMPACTS OF PESTS AND DISEASES The expected economic impact of introduced pests and diseases is the main basis for making decisions about their exclusion or control. In some countries, the law requires an economic analysis of costs and benefits as part of this decision process. Since 1995, the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) has required countries participating in international trade to base their sanitary and phytosanitary measures on international standards or risk assessments. Three types of analysis have been used or proposed to inform the decision-making process for management of transboundary pests and diseases:
Risk analysis Risk analysis is carried out to identify and assess the risks and uncertainties associated with a hazardous activity and to identify management options that mitigate that risk. It consists of two stages: risk assessment, which is a positive or descriptive operation; and risk management, which is normative and essentially subjective. In risk assessment, two major factors need to be determined: the probability of an event occurring (such as the introduction and establishment of a pest) and the consequences of that event. At the risk management stage, the expected outcomes of various management options can be examined in relation to objectives. Risk analysis allows comparisons of the risks in the presence of mitigating efforts, such as pre-entry treatments, vaccination campaigns, inspections and post-entry control measures. In each case, the benefits of reducing risk can then be balanced against the costs. The results of risk analysis must confront a set of identifiable objectives. This step is subjective and depends on the risk attitude of the decision-maker. All major commodity-importing countries undertake some risk analyses for the most serious pests and diseases they face. Cost-benefit analysis Cost-benefit analysis is an objective process, intended to show the economic impacts of specific management options. Costs and benefits are projected over the relevant time period and for the population affected. Among the management options examined might be the level of exclusion, detection or response for a potential introduced species or disease. Cost-benefit analysis is important for assessing the economic returns from options that have impacts over time or that affect different populations. A cost-benefit analysis may be expected to indicate the management option that has the greatest net benefit, but it does not by itself determine the best management choice. Non-economic criteria may be imposed, otherwise the risk analysis may limit the available choices. For example, even an option with a benefit-cost ratio of less than 1 may still be desirable if it reduces an even very small risk of an unacceptable outcome. Insurance is an example of this. The period of time considered in a cost-benefit analysis and the discount rate are significant when there are high initial costs (for instance, in establishing a detection system or undertaking eradication) and long or delayed benefits. The longer the period the greater the opportunity to gain benefits that recover the initial costs. However, a longer time period also allows for more uncertainty associated with the losses or benefits. Intangible costs and benefits include aesthetic, option, existence and bequest values, all of which may apply to aspects of introduced organisms. Defoliating insects reduce the aesthetic impact of trees, and this can have an important value to homeowners and tourists, beyond the purely economic impact experienced by foresters and orchard owners. The presence of a destructive pest not only reduces yields for existing growers of a crop, it also reduces the option for new growers to grow that crop. The preservation of the existing natural environment in its original state may have an intrinsic value to many people. Finally, people may wish to pass on that natural environment in its original state to future generations. These values may be significant compared with directly identifiable economic values for many introduced organisms, particularly in natural environments, and cost-benefit analyses may need to take them into account. Contingent valuation, in which interested groups are asked to indicate their willingness to pay to prevent the loss of value, is one method that has been used to determine these values. Another method used is to calculate the expenditure people make in order to obtain or avoid similar benefits or losses. Risk acceptability In many cases decisions regarding the exclusion of unwanted organisms are based on the view that practically no risk is acceptable. This "precautionary approach" is sometimes taken when subsequent eradication of a pest or disease is unlikely to be achieved, since an introduction would be irreversible. An example of this is the use of "clean" lists, whereby only organisms determined to have an economically acceptable impact are allowed to enter a country; all others are excluded. Such an approach may be taken in cases where the costs of undertaking a risk analysis are likely to be high relative to the marginal costs of exclusion. Alternatively, some introductions may be considered inevitable and not worth delaying, or they may be acceptable for some other reason. |
The results of the existing studies almost always demonstrate a net benefit from the control of transboundary pests and diseases, although such conclusions may be premature - for a number of reasons. The first reason is that studies of transboundary pests and diseases usually examine a choice between control or no control. This is not necessarily an appropriate method of analysis because it tells nothing about the marginal decision faced by policy-makers: whether to carry out one more or one less unit of control. Thus, it cannot be used to determine what the appropriate level of control is.
Furthermore, studies generally measure crop losses rather than reductions in farm income. Crop losses are defined in terms of final yields or output, whereas the change in farmers' welfare is measured by loss of income, which depends on farm management choices, the possibility of compensation and other socio-economic factors. As an example, in the United States, farm production declines as a result of adverse weather or pests, but farm income may increase because of a combination of higher prices and government compensation.
Cost-benefit analyses for transboundary pest and disease management options generally deal only with direct costs and benefits. External costs or benefits to others who are not directly involved (nearby farmers, consumers) and environmental considerations are usually omitted.
The following sections look at studies of the different types of economic impacts caused by the presence or threat of migratory pests, quarantine pests and, finally, animal disease. There are two types of study: the first measures the proportion of potential output lost from infestations and outbreaks of pests and diseases, sometimes with monetary values attached; and the second type provides a monetary cost-benefit estimate of control efforts. The results of some of these studies are summarized in Table 45.
Table 45
SUMMARY RESULTS OF SELECTED STUDIES ON THE IMPACT OF TRANSBOUNDARY PESTS AND DISEASES
Pest/disease |
Period |
Country/region |
Estimated losses from |
Type of |
Study |
MIGRATORY PLANT PESTS |
|||||
African |
- |
Kenya, Ethiopia |
Cost of control: |
Financial
|
1 |
African |
During |
Sub-Saharan Africa |
Losses: 20-60% |
Production |
1 |
Grasshopper |
1986 |
Sahel |
Losses: 15% of |
Production |
2 |
Quelea birds |
- |
Sahel |
Losses: 5% of national |
Production |
3 |
Quelea birds |
- |
Savannah Africa |
Losses: 1% |
Production |
4 |
Australian locust |
1984 |
Australia |
Net benefit of |
Financial and |
5 |
QUARANTINE PLANT PESTS |
|||||
Mediterranean |
- |
United States |
Potential loss: $800 |
Production |
6 |
Fruit flies |
- |
Egypt |
Losses:$100 million/year |
Production |
7 |
Fruit flies |
- |
Pakistan |
Losses:$200 million/year |
Production |
8 |
Carambola |
- |
Latin America |
Potential net benefit
of control: $709-$938 |
Benefits and |
9 |
Alien weeds |
- |
United States |
Losses: $35 billion/ |
Total economic |
10 |
Alien insects |
- |
United States |
Losses: $20 billion/ |
Total economic |
10 |
ANIMAL DISEASES |
|||||
Rinderpest |
Different |
Ethiopia, Kenya, |
Benefit/cost ratio |
Net benefit |
11 |
Classical swine |
- |
Haiti |
Losses: $2.7 million/year |
Production |
12 |
Foot-and-mouth |
Early 1980s |
Kenya |
Losses: KSh 230 million/ |
Production |
13 |
Foot-and-mouth |
1996 |
Uruguay |
Benefits of eradication:
$20 million actual and
|
Trade |
14 |
BSE |
2000 |
United Kingdom |
Losses: e5 billion |
Trade, |
15 |
Sources: | |||||
Impacts on production, prices and trade. Two types of study have been conducted on the impacts of migratory pests: estimates of potential damage, and cost-benefit analysis of control efforts. Estimates of potential crop damage from migratory pests in the absence of control have been made by measuring damage as a proportion of total feasible output. Estimates of damage during outbreaks and plagues range from 100 percent of the planted crop to insignificant losses, depending on the year, country and pest species (see sources 2, 6, 16 and 17 in Table 45).
During outbreaks of the African armyworm, estimated grain losses in individual locations have reached as much as 60 percent (5). Grain losses in Sahel countries during the grasshopper outbreaks of 1986 were estimated to be 15 percent, in spite of control operations (16), in contrast with the 2 percent lost in non-outbreak years between 1992 and 1994 (6). Damage to cereal crops by quelea birds in specific locations could be as much as 100 percent but was estimated to be about 5 percent nationally in Sahel countries (9) and at about 1 percent for all of savannah Africa (17).
These estimates imply that migratory pests can cause substantial damage to crop production locally, but the losses often appear to be relatively contained on a national scale. Some studies may overestimate the potential crop losses caused by migratory pests. They rarely account for farmers' response to mitigate the effects of pests and are often based on calculations of optimal production conditions. In both ways, they may overstate the losses caused by the pests. They are also based on estimates of production in the absence of specific migratory pests.
Cost-benefit analysis looks at both the estimated losses from the migratory pest and the cost of trying to prevent losses. However, it is difficult to calculate the threat of pest damage in these studies. Preventive control is the preferred action of responsible international bodies (including FAO) against migratory pests15 and, in most countries, major campaigns are mounted as soon as outbreaks and plagues of migratory pests begin. Therefore, the actual crop damage reported in recent years does not reflect the situation that would have developed if no control had been initiated.
Another complicating factor is how to assess the impact of a campaign on subsequent pest generations. For example, one well-timed campaign may prevent the movement of locust swarms to other regions where extensive campaigns would have been required for a number of years. The damage that would have resulted over such long periods in the absence of control is not directly measurable.
Recent analyses have combined actual, but limited, data with a theoretical modelling approach to assess impacts of the desert locust. In FAO (1998), Joffe16 used a simulation model to estimate both the costs and the benefits of desert locust control. These were analysed by estimating the difference in crop losses with and without control (by simulating what losses would have been in the absence of control) and comparing those benefits to actual control costs (average of fixed and variable over a period of years). Joffe concluded that generally accepted control methods were technically effective but not economically efficient, owing to poor information, poor management and excess expense.
Belhaj17 studied the impacts of desert locust on agriculture in Morocco and the Sudan during the plagues and upsurges of the 1980s and 1990s. During these periods, extensive control campaigns were carried out both within the Sudan and in its neighbouring countries. Belhaj found no evidence of harm to agricultural yields from desert locust invasions. In fact, high cereal production levels were reported in invasion years in the Sudan. This surprising result is due in part to the coincidence of locust invasions with years of good rainfall, leading to higher yields and greater land area in production.
Nonetheless, the sudden and dramatic localized damage that can be inflicted by migratory pests is still the justification for trying to control the pests when they appear. There is great fear of the desert locust on the part of farmers in affected countries. A survey of farmers in the Niger showed that 57 percent consider the desert locust to be the largest threat to their production of pearl millet throughout their farming lifetime, but other pests were mentioned as the greatest problem for any given growing season.18
Since these results have become widely known, there have been calls for control efforts to concentrate more on a strategic approach in primary breeding areas and less on widespread spraying of affected areas. Farmers in Morocco and the Sudan have expressed a willingness to pay for alternative strategies.
Given the likely economic inefficiency, why do decision-makers continue with current policies? Some point out that risk aversion by policy-makers is the strongest factor upholding the status quo, while net benefits tend to be overestimated by the omission of some important factors such as farmers' adaptation and excluded costs.19
Studies of other migratory pests have been carried out by focusing on estimated damage in the absence of control and comparing them with direct costs of control operations. Thus, these studies have the same drawbacks. In all likelihood, they give an incomplete picture of the true net benefits of pest control.
Without control efforts, the 1984 Australian locust plague would have resulted in lost output of an estimated $A 103 million. Control costs were $A 3.4 million; actual damage was $A 3.6 million. The control costs, therefore, were far lower than potential damage.20
The costs for controlling armyworm outbreaks in Ethiopia, Kenya and the United Republic of Tanzania and were compared with estimates of potential damage in the absence of control. The value of saved crops ranged from $11 per hectare (average between January and June) to $15 (average between October and December) whereas, for ground control operations, costs were usually less than $10 per hectare, and costs of aerial control operations averaged $16 per hectare. Therefore, the control costs closely approximated the value of saved crops.21
Impacts on food security. The effects of migratory pest damage on the food security for a whole country have not generally been analysed, but studies have tended to find that, because of improved rainfall, production is higher in locust years than in years when locusts are not present.22 This effect means that any widespread impact on food security is unlikely, and it also tends to reduce price effects. Joffe found that the production of coarse grains in Mali was up by 44 percent from the previous year in the locust and grasshopper year of 1985/86 and prices for grain in rural areas were severely depressed. Similarly, large harvests were expected in affected countries in 1993 and 1994 during desert locust upsurges.
However, at the local level, food security can be temporarily threatened when a rural area is not well connected to distant markets, when stockpiles are low or non-existent or when non-farm income opportunities are low. An example of this was observed in 1988 in the Sudan, where several districts experienced production shortfalls of 50 percent while national output was diminished by only 7 percent.
Impacts on production, prices and trade. The economic damage caused by fruit flies has been the subject of more study than other quarantine pests because of the threat they pose to a country's ability to export and because of the effectiveness of detecting their outbreaks. Studies have focused on production losses, together with estimates of foregone trade, in the event of infestation. Research has not been carried out on the implications for prices, labour costs and food security.
Based on existing volumes of trade and phytosanitary restrictions, the Mediterranean fruit fly (see Map 11) would cause more than $800 million per year in lost output and trade if it became established in the United States.23 Again including both production and trade losses, the economic impact of fruit flies (from both the endemic Mediterranean fruit fly as well as the newly introduced peach fruit fly) in Egypt is projected to be as much as $100 million.24 A similar economic study in Pakistan found economic losses caused by Bactrocera dorsalis and B. zonata fruit flies of approximately $200 million annually, with a disproportionate impact falling on small farmers.25
A study of the economic feasibility of eradicating the carambola fruit fly shows net benefits of between $709 million and $938 million (1995 value) over a 12-year period, while the net benefits of suppression would be somewhat less than half this amount.26 The study examines the effects of suppressing or eradicating the fruit fly across its potential range of 12 countries in and near the Caribbean region. The benefit figures include the value of crop production protected and the continuation of exports. The costs refer to expenditures for control and eradication efforts.
A serious production impediment in many developing countries is the spread of introduced weed species, which results in much greater manual weeding, generally by women, for staple crops such as maize and rice. Hand weeding is often the main limiting factor in determining the area of rice, maize and other important food crops that can be cultivated by subsistence farmers. The extra labour demand it implies reduces the amount of land that can be farmed as well as the productivity of the farming activity. Weed infestation accounts for production losses of 44 percent of potential output in Asia, but only 4 percent in Africa.27
A different problem arises when pests are listed as quarantine pests but do not in fact cause severe damage. This situation can arise when information on the pest is lacking, or tools to control it once it is introduced are unavailable, as well as in response to industry demands for protection. The costs include lost trading opportunities as well as the direct costs of implementing quarantine. The eventual solution may be for all countries to drop restrictions on these less damaging pests. This outcome is entirely dependent on a scientific panel ruling at WTO in the event of a trade dispute.
Impacts on the environment. The impacts of plant pests on biodiversity and other ecological functions are causing environmental advocates to have a growing interest in sanitary and phytosanitary issues. Most environmental impacts of introductions have not been quantified, if indeed they have been identified. There are examples of both intentional and unintentional introductions, however, that are known to have caused extensive damage to a native environment.
A study of 79 alien species introduced into the United States since 1900 estimated the cost to native species to be $96 billion.28 Another study has put the annual cost of non-indigenous species at $123 billion, with $35 billion incurred by alien weeds and $20 billion by alien insects.29 Such figures may or may not be accurate, but they suggest a strong need to examine the spread of invasive species around the world more systematically. The cost to agricultural industries and to native environments could become the most serious burden of globalized trade.30
Impacts on production and prices. All transboundary animal diseases have the potential to kill affected animals, but the severity of the disease will vary depending on factors such as the species and breed of animal, its age and nutrition and the disease agent. Many transboundary animal diseases have mortality rates of between 50 and 90 percent in susceptible animals. Rift Valley fever normally produces only a mild infection in local African breeds of cattle, sheep and goats, while exotic breeds of the same species may experience severe spates of abortion. Under experimental conditions, some "mild" strains of classical swine fever virus kill less than half of the infected pigs while other "virulent" strains may kill up to 100 percent. The first outbreak of rinderpest in East Africa in 1887 was estimated to have killed about 90 percent of Ethiopia's cattle and more than 10 million cattle on the continent as a whole. Widespread famine resulted.
Reductions in mortality and improvements in animal productivity are the traditional goals of disease eradication programmes. Access to export markets is now becoming an equally important reason. Improved response to outbreaks and increased access to vaccine have reduced the likelihood of many disease epidemics, but this experience is countered by increased trade, smuggling and susceptibility of small poultry and ruminant populations raised in intensive conditions.31
The only international cost-benefit analysis of animal disease control is a study of the Pan-African Rinderpest Campaign in Ethiopia, Kenya, Uganda and the United Republic of Tanzania.32 The study estimated the production losses attributable to rinderpest with and without the control campaign and found benefits exceeded costs in each country. The benefit/cost ratio ranged from 1.35:1 to 2.55:1. As mentioned in relation to the desert locust cost-benefit studies, there are many variables that are not considered in a simple evaluation of costs and losses that might lead to an underestimation of the costs and/or an overestimation of the benefits of a control campaign.
Most analyses of animal disease do not include the cost of treatment, perhaps because it is regarded as minor. As with measurements of costs and benefits of desert locust campaigns, loss estimates are based on what the damage might have been in the absence of control. The effects of disease on animal productivity depend on the actual disease incidence, which may be reduced by a control campaign.
The economic loss from animal mortality continues to accrue because of lost productivity over the time period until the original population size has been re-established.33 For example, the continued presence of classical swine fever in Haiti, with recurring outbreaks, has been estimated to result in a reduction of potential offtake of 10 percent, or 38 000 pigs, per year. At an average price of $70 per slaughter pig, this would amount to an annual reduction in income of $2.7 million for the local smallholder producers.34
Productivity losses can persist even in animals that survive disease. Abortions caused by Rift Valley fever do not only entail the loss of offspring but also the loss of one lactation and thus reduced milk supply for human consumption in the year following an outbreak. Foot-and-mouth disease leads to considerable loss in milk production in dairy cattle. In Kenya, losses caused by foot-and-mouth disease in the early 1980s amounted to KSh 230 million (1980 value) annually, approximately 30 percent of which were due to reduced milk production.35
The transitory effect of outbreaks on prices of livestock and livestock products can be exemplified by the most recent epidemics of classical swine fever, CBPP, Rift Valley fever and foot-and-mouth disease in Haiti, Botswana, the Horn of Africa and Taiwan Province of China, respectively. In each case, there were sharp upward or downward movements in domestic prices, depending on the supply effect on the local market: where animals for domestic consumption were slaughtered, prices rose; where animals for export were sold domestically, prices dropped. Consumer health fears in some cases also reduced demand and prices. However, in none of these cases is it known how long price impacts lasted.
Impacts on trade. The 1997/98 outbreaks of Rift Valley fever in eastern Africa severely affected the pastoralist economy of the Somali region, although the region itself only experienced minimal incidence of the disease. The economic impact on the region stems from the ban declared by Saudi Arabia on all livestock originating from the Horn of Africa. Until 1997, approximately 3 million animals, mainly small ruminants, had been exported annually through the Somali ports of Berbera and Bossasso, generating more than 90 percent of all the foreign exchange receipts of Somaliland. After the imposition of the ban, livestock exports through the above ports dropped by more than 75 percent. The region's economy came close to a standstill because foreign exchange for the purchase of imports such as grains, sugar, medicines and fuel was scarce. In urban centres, a large proportion of the shops closed and prices of commodities such as grain and sugar skyrocketed, while the purchasing power of the general population declined dramatically.
Uruguay provides an example of a country that is gaining access to high-value markets after the eradication of foot-and-mouth disease. Uruguay was officially recognized as being free from foot-and-mouth disease without vaccination in 1996 and has consequently been able to take advantage of its export quota of 20 000 tonnes of beef to the United States. Exports increased by more than 100 percent by weight and 52 percent by value after the country was declared free from the disease. The higher price obtained for its beef in the United States relative to its sale on the domestic market - more than double in the case of chilled meat - has been estimated to provide an additional revenue to the country in the order of $20 million per year. In the medium term, access to Pacific Rim markets was estimated to provide Uruguay with potential additional revenues of more than $90 million per year. Prior to the disease's eradication, Uruguay was spending between $8 million and $9 million annually on foot-and-mouth disease vaccination.36 Therefore, control costs are currently about 50 percent of revenues but may eventually be as low as 10 percent of revenues from exports alone.
Studies in Bolivia and Thailand found that control of foot-and-mouth disease would be financially worthwhile only if it allowed entry into export markets, thereby increasing prices for farmers.37 The steps needed to enter export markets and maintain an emerging export industry can be costly. Countries need to impose sanitary and phytosanitary measures, such as inspection and testing of imported livestock, and prevent illegal smuggling of potentially diseased animals. However, once a country has reached a disease-free state, it is likely to take extraordinary measures to protect it. Based on a risk reduction strategy, the preferred response to an outbreak of CBPP in Botswana was slaughter and compensation for farmers, rather than vaccination, surveillance and movement control - even though the latter cost only 78 percent of the former.38 This is because slaughter guarantees disease-free status sooner and provides opportunities for trade.
Impacts on community development. In some cases, the agriculture sector in a community is extremely undiversified, and the threat or appearance of a particular pest or disease can undermine the entire economy. An example is the important link between cattle farming and the Botswana macroeconomy. The introduction of CBPP led to slaughter of more than 300 000 cattle in Ngamiland, the worst-affected province. The immediate result was the closure of the export meat processing plant, which employed more than 200 people before cattle were destroyed. Exports then came to a standstill. In Ngamiland, the livestock sector was a very important catalyst for the overall economy, and a survey of the business sector after the eradication campaign showed that business turnover had generally declined by an average of 15 percent, which was attributed to the loss in disposable income from cattle. The indirect effects were further estimated to be more than seven times the amount attributed to direct losses.39
Impacts on food security and nutrition. Unfortunately, no quantitative information on the impact of transboundary animal diseases on food security and nutrition could be found in the published literature. As mentioned above, impacts on food security are expected to be minor and short-lived, as long as substitute food sources exist and the community has either purchasing power or emergency assistance. For those countries that can afford multiple sources of supply, the globalization of markets reduces the impact of localized shocks from disease.
In poor countries and communities, however, other threats to food security and nutrition can arise from animal diseases. Livestock, in particular, contribute indirectly to food security and nutrition as a source of protein, micronutrients, animal power and tradable assets. However, McLeod and Leslie40 caution against a conclusion that livestock disease control is always beneficial to the poor. It is necessary to study the production system, costs and methods of control before assessing the distributional impacts on subpopulations in a country.41 The authors conclude that an export-oriented programme of disease control will benefit the poor only if the sector is already export-oriented or if targeted policies that include poor farmers are included.
Impacts on human health and the environment. Some animal pests and diseases can affect humans directly and even more may use animals as vectors that aid transmission. Areas with conflict or poor health controls pose a greater risk of human infection from animal disease. Larger production units and increased contact among animals also increases the impact of outbreaks.
The phenomenon of animals infecting humans (zoonosis) occurs even in highly developed countries with excellent sanitation, as has been demonstrated by BSE and vCreuzfeld-Jakob disease in some European countries (see Box 9, p. 262, on the spread of BSE).
The majority of transboundary animal diseases do not cause epidemics in humans, although occasionally humans can become infected. The viruses causing rinderpest, peste des petits ruminants, classical swine fever and Asian swine flu, as well as the causative agent of CBPP, are not infective for humans. Foot-and-mouth disease virus has been isolated from around 40 people worldwide following a mild course of disease.
Rift Valley fever virus can infect humans, where it causes a febrile illness, which is sometimes complicated by haemorrhage, encephalitis and blindness. The virus is transmitted among animals and from animals to humans by certain mosquito species, which gives rise to the distinct association of Rift Valley fever epidemics with periods of high rainfall. Humans also appear to contract the infection through direct contact with infected tissues and fluids of animals at slaughter. In 1977/78, a major epidemic occurred in Egypt, with an estimated 200 000 human cases of the disease and about 600 deaths. It is believed that up to 500 000 people became infected with Rift Valley fever during the 1997/98 epidemic in eastern Africa, of which about 500 may have died from the haemorrhagic form of the disease.
Checking pesticide stocks in storage
Pest outbreaks are erratic and difficult to predict so there is a danger that more pesticides than needed will be ordered or that the pest will migrate out of the country before their arrival
FAO/20093/A. WODAGENEH
Animal diseases directly affect the size and composition of animal populations and thus indirectly have repercussions on the environment. In conjunction with other environmental factors, major livestock diseases determine which production system, species and breeds of animals are adopted by livestock owners. Thousands of hectares of fertile land in Africa remain underutilized as a result of animal trypanosomiasis leading to increased population pressure on land in adjacent disease-free areas.
All campaigns against invasive species of pests tend to occur over large areas, thereby affecting a significant amount of territory and people. Use of pesticides in an effort to control pests, both introduced and indigenous, can lead to serious health effects in developed and developing countries. Control of animal diseases is far less risky to people and the environment. Again, economic impacts of these health effects have not been measured.
It is widely understood that pesticide use can be dangerous to farmers, nearby exposed populations and the affected environment. There are almost 5 million cases of pesticide poisoning in developing countries each year.42 WHO has estimated that there are 3 million severe human pesticide poisonings in the world each year, with approximately 220 000 deaths. While developed countries use about 80 percent of the world's pesticides, they have less than half of this number of deaths. It is not known how many of these poisonings should be attributed to control measures against transboundary plant pests.
However, pest eradication or the prevention of spreading can require pesticides for a shorter term and in a smaller area than would be employed if the pest were to spread. Therefore, it is important to balance the risk of pesticide use for control at different stages of pest outbreaks against the potential negative impacts. Few experts believe that pesticide use is currently at optimal levels.
Concerns remain about worker exposure, residues on food and harm to domestic and non-target wild animals. Fish and invertebrates are frequently vulnerable, especially aquatic arthropods (see sources 8 and 10 in Table 45). The effect of locust control operations on honeybees has also been a problem in certain areas (16).
Stocks of obsolete pesticides have also become a serious health and environmental problem in many countries of Africa and the Near East. Since pest outbreaks are erratic and difficult to predict, there is a danger that more pesticides than needed will be ordered or that pests will migrate out of the country before the pesticides arrive. As a consequence of the need to be prepared for initiating a control campaign at short notice, stockpiles of pesticides can be found in many of the countries affected by migratory pests. Often they are not stored correctly, which has resulted in corroded containers, lost labels and release of the chemicals into the environment.
The affected countries regard pesticide stockpiles as a very important problem that requires urgent attention, especially for stocks near urban areas where there is a risk of the pesticides contaminating drinking-water, food or the air. However, in general they lack the resources and technology to mount appropriate disposal campaigns. Progress has been made in recent years by assisting countries during clean-up campaigns as well as by establishing improved storage conditions, more careful planning and systems for donating surplus stocks to other countries.
As mentioned earlier, published economic studies on the impacts of transboundary pests and diseases and on their control are relatively scarce and generally limited in scope, focusing on specific countries, commodities and cases of outbreaks. Their frequent methodological limitations were also mentioned: impact analysis is often limited to immediate production impacts, without considering more indirect market effects, dynamic responses or farmers' adaptation to transboundary pest and disease outbreaks or longer-term impacts.
There is no uniform and widely used approach to the economic assessment of the impacts that transboundary pests and diseases can have. The studies that deal with migratory pests tend to focus on the immediate production impacts. They show that impacts can be quite significant but that they are frequently quite localized, with relatively less significant effects occurring at the national level. Local food security can nevertheless be temporarily threatened.
Studies on quarantine plant pests have focused both on production losses and on foregone trade, both of which can be very significant. Existing studies show large potential losses from pests and significant benefits from control efforts.
Studies on animal diseases have also focused on impacts on production and trade. Losses have been shown to be potentially very substantial for both. There are also examples of the closing of export markets causing major economic damage in general to developing countries. Studies on control efforts and eradication programmes have revealed instances of significant returns in terms of expanded trade opportunities. Although most animal diseases do not cause epidemics in humans, human health concerns can in some cases augment the damage from transboundary pests and diseases; the spread of BSE in Europe is a case in point.
The results of the existing studies almost always demonstrate a net benefit from control of transboundary pests and diseases. However, because of the general methodological problems affecting many studies, it is premature to conclude that this will be true in all cases. The evidence may thus require further scrutiny owing to problems such as insufficient data, overestimation of actual economic losses, neglect of secondary effects and externalities in transboundary pest and disease control. Indeed, specific studies have revealed certain externality costs associated with eradication and control efforts.
