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Livestock disease outbreaks cause economic hardships

Producers suffer financial losses from a drop in consumer sales and assume costs associated with disease treatment or culling

EDMONTON — Major economic fallout often follows a serious livestock disease outbreak but the issues of animal welfare and producer stress are often forgotten.

“We can’t underestimate those social effects of diseases,” said Ellen Goddard, who studies agricultural marketing and business at the University of Alberta.

“We don’t understand too much about the behaviour of individuals in industries affected by livestock diseases or in the public who may be responding in their own way to some of these effects of the livestock disease,” she said at an infectious disease conference at the University of Alberta May 2-3.

A British study said there are seven major economic impacts in any livestock disease outbreak. These include declines in sales, domestic and internationally, reduced quality of products, costs associated with prevention and control, culling costs or potential public health costs if the disease is zoonotic

The government responds by trying to restore trade and it may pay farmers for the cost of animal losses or income shortfalls, as well as subsidize the cost of vaccinations or other treatments.

The BSE crisis in cattle and porcine circovirus associated disease in swine were handled differently.

Trade in beef and live animals halted as soon as the first domestic case of BSE was announced in 2003. The federal and provincial governments sent money to producers through business risk management programs or in payments to cover various losses.

In the early days of BSE, animals were not traded and value dropped but they still had to be fed and maintained. Canadians rallied and bought more beef so there was a small increase in the rate the supply was drawn down.

In 2003, the federal government provided $1 billion to the industry and more in following years. Some went to support producers and other funds went to upgrade processing plants and for research.

The Alberta Prion Research Institute was formed and it has invested $42 million in research from 2005-14. Were it not for the BSE discovery in Canada, none of this would have happened.

Nevertheless, there were no definitive policies to deal with a crisis of this type and the fallout .

“Most people would say when BSE hit, they were working blind,” she said.

Corporations received considerable support.

“A lot of these programs were paid on the number of animals that were slaughtered. They were hugely controversial. The big meat packing plants in Alberta owned about 45 percent of the animals that got slaughtered so they got the biggest payment and farmers did not get anywhere near as big a payments,” she said.

“We don’t know how this money was received by farmers in terms of decisions they would make. We don’t know if people were more proactive about disease management or less proactive,” she said.

When circovirus hit Canada, the approach was different.

In 2007, the federal government contributed $76 million over four years to combat disease and enhance prosperity and stability in the hog sector.

“This was an unusual thing for the federal government to fund and there was a lot of research support behind this funding,” she said.

A vaccine was also developed as part of this initiative and money was available to cover the costs of diagnostic testing and 50 percent of the price of vaccines for farmers. Remaining money created the Canadian Swine Health Board that worked on circovirus and other infectious hog diseases.

The Canadian hog industry went through rapid restructuring at the same time for a number of reasons but changes were not as pronounced as the impact of BSE.

“The vaccine subsidy was important. People responded to it and made the decision to vaccinate their hogs so presumably we probably had less spread of the disease, but we did end up with more hogs in Canada,” she said.

If farmers had to pay the whole cost of the vaccine without subsidy, they might not have adopted it as readily, said Goddard.

A serious disease like circovirus encourages big steps forward in research. For example Genome Canada and other funding groups have spent $12.48 million to discover disease resistance among pigs.

Research has shown taxpayers often favour supporting projects to control disease but too often government does not decide to invest in disease research until it reaches the crisis point.

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