1. Who Should be Responsible for Farm Animal Diseases: The Government or the Farmers? Jeremy Phillipson Centre for Rural Economy Newcastle University www.ncl.ac.uk/cre

2. Structure of Presentation Introduction: Are we dealing with animal disease outbreaks efficiently? Example of 2001 Foot and Mouth outbreak in the UK and its impact Lessons learnt from 2001 The changed political context for combating animal disease The Responsibility and Cost sharing agenda

3. Costly Disease Outbreaks Worldwide Are the costs of animal disease control becoming too high? The approach is profoundly reactive Is it also outmoded? Does it get right the balance of risks and responsibilities between government, society and producers? DiseaseCost (US$m) Impact on GDP BSE UK 1996/97 3,800-0.4% FMD Taiwan 1997 6,600-0.64% Classical Swine Fever Netherlands 1997/98 2,300-0.75% FMD UK 2001 9,200-0.2% Avian Influenza Vietnam 2003/04 76 / 450-0.3 / -1.8% Avian Influenza Netherlands 2003 681Not available

4. The ‘Stamping Out’ Approach to Exotic Diseases Isolation and culling since 15th Century International rules – disease-free to trade EU Directive UK responsible for contingency planning

5. FMD 2001: Unprecedented Factors Airborne infection of sheep Time of year – virus survival – movements of sheep Absence of signs of disease in sheep

6. Delay in reporting disease Movement of sheep through markets before disease suspected FMD 2001: Unprecedented Factors

7. FMD 2001: Unprecedented Scale of Stamping Out Culled-out farms: 2026 Infected farms; 256 Slaughter on Suspicion; 8230 Dangerous Farms Slaughtered animals: 4.2 million for disease control; 2.5 million for welfare disposal Manpower: 2000 vets; 6000 technical /administrative; 2000 military Infected farms in Northern England

8. Photos from website of the BBC

9. FMD 2001: Unprecedented Scale of Stamping Out

10. Farm Holdings and Livestock Culled

12. FMD 2001: Unprecedented Scale of Stamping Out Disease control and eradication -slaughter of stock on infected premises and stock at risk of spreading disease -livestock movement restrictions -biosecurity regimes -vaccination not used Access restrictions -blanket closure of footpaths -wholesale discouragement of visits to countryside -closure of major visitor attractions Response driven by agricultural considerations Impacts upon wider rural economy a secondary concern

13. Photos from website of the BBC

14. “It is imperative that every local council which has rural footpaths and rights of way within its boundaries closes them immediately. There must be a blanket ban across the country. I implore everyone again: please, please stay away from the countryside” Ben Gill, National Farmers Union “Though we are not at direct risk from this disease, we can play a part, unknowingly, in spreading it. FMD is a highly infectious virus which can be picked up by us on our boots, clothes and cars and carried many miles. By staying away from farmland, by keeping off any footpaths through or next to farms or open land with livestock, we can help the efforts to eradicate this disease. We are giving local authorities today the power to enforce the temporary closure of footpaths and rights of way, but we hope people will voluntarily stay away in any case” Tony Blair

16. Severity of impact on Individual Firms (%)

17. Sectoral Costs - to agriculture $500 million - to food industry $200 million - to tourism $4,400 million - to tourism-support services $2,900 million $8,000 million

19. $8 billion cost to private business Massive losses but only 141 business closures officially registered Households acted as buffers to firms and rural economies Micro-business-Household Interactions: FMD 2001

20. Coping responses based on access to human, social, physical and financial capital of households and local communities Household income portfolio compensated for reduced flow of business income and maintained business cash flow Cut backs in household consumption, investment and spending Values and power relations influenced access to household assets by firms Micro-business-Household Interactions: FMD 2001

23. Lessons Learnt Improved global and regional monitoring Customs officials now responsible for import checks: substantial increase in seizures. Better contingency planning – worst case - mandatory Better surveillance and preparedness for exotic diseases:

24. Lessons Learnt Rapid diagnosis National movement ban from day 1 Vaccination to be given greater emphasis as a control option Ramping up resources Keeping the countryside open More decisive control of disease outbreaks:

25. Lessons Learnt Greater attention to farm animal health planning and biosecurity 6/20 days standstill when an animal has moved between farms ‘Burden sharing’ between farmers and government over disease control A more proactive, risk-based approach to exotic diseases:

26. Burden Sharing: The Broader Politics Concern over the huge public costs of FMD Other sectors seemingly sacrificed to defend farming Public disquiet at large-scale slaughter of (mostly uninfected) animals Farming leaders’ veto of vaccination in 2001

27. Burden Sharing: The Broader Politics After FMD, Ministry of Agriculture → Department of Environment, Food and Rural Affairs Ongoing costs of public support for agriculture questioned $1 billion annual public expenditure on animal health and welfare Reform of Common Agricultural Policy, shifting justification of funding to farmers from production supports to maintenance of sound farming (including animal health and disease prevention) Farmers opposed to red tape; government keen on deregulation

28. Burden Sharing: The Policy Context Animal Health and Welfare Strategy (2004) set out broad principles: Animal owners have the primary responsibility to meet the health and welfare needs of their animals Prevention of disease (through high health standards and biosecurity) is better than cure Disease prevention requires a partnership between farmers, the farming industry and government The justifications for government intervention are to protect: public health, animal welfare, society’s interests and international trade

29. Burden Sharing “A new approach to handling the risks of animal disease is required, one which allows joint problem solving between industry and Government and permits industry to find efficient and effective market based solutions. This approach aims to ensure that Government intervenes only when necessary, and seeks to do so in agreement with industry on what should be done and how costs should be borne” Government looking specifically for those who benefit from disease prevention and control to bear greater responsibility and bear more of the costs. - use general taxation to fund the provision of public goods only - ensure private beneficiaries of public intervention meet the costs Government also looking for more flexible means and partnership approaches to disease management

30. Burden Sharing Principles of Responsibility and Cost Sharing for Animal Health and Welfare (2006) Sharing responsibilities guided by the aims of cost effectiveness, efficiency and best value for money Sharing costs only where the activity provides a clear benefit Focus cost sharing where most likely to reduce disease risk Responsibilities should be shared where costs are shared but cost sharing should not be the boundary to responsibility sharing The total regulatory burden should be reduced

31. Examples of Cost Sharing Initiatives in other EU Member States Germany Animal Disease Fund in each Land (province) – legal bodies financed by livestock keepers and the Länder and Federal governments. Disease control expenses, such as vaccination banks, research and development, financed jointly by the livestock keepers and the government. Costs of dealing with disease outbreaks are met 50:50 by government and livestock keepers. Netherlands Disease outbreak costs financed by livestock producers up to a predetermined limit. Representatives of livestock keepers and government negotiate the limit and this is set out in a five year agreement. France Disease outbreak costs are met by the Government of France, but there is a regional system of industry driven self help to improve animal health and welfare.