The economic impacts of foot and mouth disease – What are they, how big are they and where do they occur?

Although a disease of low mortality, the global impact of foot and mouth disease (FMD) is colossal due to the huge numbers of animals affected. This impact can be separated into two components: (1) direct losses due to reduced production and changes in herd structure; and (2) indirect losses caused by costs of FMD control, poor access to markets and limited use of improved production technologies. This paper estimates that annual impact of FMD in terms of visible production losses and vaccination in endemic regions alone amount to between US$6.5 and 21 billion. In addition, outbreaks in FMD free countries and zones cause losses of >US$1.5 billion a year. FMD impacts are not the same throughout the world: 1. FMD production losses have a big impact on the world's poorest where more people are directly dependent on livestock. FMD reduces herd fertility leading to less efficient herd structures and discourages the use of FMD susceptible, high productivity breeds. Overall the direct losses limit livestock productivity affecting food security. 2. In countries with ongoing control programmes, FMD control and management creates large costs. These control programmes are often difficult to discontinue due to risks of new FMD incursion. 3. The presence, or even threat, of FMD prevents access to lucrative international markets. 4. In FMD free countries outbreaks occur periodically and the costs involved in regaining free status have been enormous. FMD is highly contagious and the actions of one farmer affect the risk of FMD occurring on other holdings; thus sizeable externalities are generated. Control therefore requires coordination within and between countries. These externalities imply that FMD control produces a significant amount of public goods, justifying the need for national and international public investment. Equipping poor countries with the tools needed to control FMD will involve the long term development of state veterinary services that in turn will deliver wider benefits to a nation including the control of other livestock diseases.