Economic Impact of the 2001 FMD Release in England
Posted by nonbafks on August 12, 2008
According to a study by the U.K. National Audit Office, the direct cost of the 2001 FMD outbreak to the public sector was estimated at over $5.71 billion and the cost to the private sector was estimated at over $9.51 billion.41 By the time the disease was eradicated, in September 2001, more than six million animals had been slaughtered: over four million for disease control purposes and two million for welfare reasons.42
Compensation and other payments to farmers were expected to total nearly $2.66 billion. Direct costs of measures to deal with the epidemic, including the purchase of goods and services to eradicate the disease, were expected to amount to nearly $2.47 billion. Other public sector costs were estimated at $0.57 billion.43
In the private sector, agriculture and the food chain and supporting services incurred net costs of $1.14 billion. Tourism and supporting industries lost revenues eight times that level—$8.56 billion to $10.27 billion, when the movement of people in the countryside was restricted. The Treasury had estimated that the net economic effect of the outbreak was less than 0.2 percent of gross domestic product, equivalent to less than $3.8 billion.44
41Comptroller and Auditor General, The 2001 Outbreak of Foot and Mouth Disease (London: National Audit Office, June 21, 2002).
42The 2001 outbreak of FMD spread to France, the Republic of Ireland, the Netherlands and Northern Ireland. However, the NAO study did not include the cost incurred by these countries.
43We have converted the British pound to 2001 U.S. dollars and then we adjusted to current value.
44The total cost to the country was estimated at $30.4 billion at current values.
Keywords: England FMD 2001, economic costs, risk, tourism
Page 26 GAO-08-821T
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