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Prevention and control of animal diseases worldwide
Part I: Economic analysis: prevention versus outbreak costs
5.2.4. Comparison of prevention versus outbreak costs
The animal health component of Vietnam’s national Operational Programme for Avian Influenza and
Human Influenza (OPI) for the 2006-2010 period comes to US$ 83.74 million. Of this total, the most
significant amount (US$ 55.17 million) is earmarked for control activities (Table 12). Excluding the
provision for control costs in the event of an outbreak (culling and compensation), total prevention and
control activities as such (during ‘normal times’) come down to US$ 70.14 million. Other key components
include the strengthening of VS as such, which accounts for US$ 15.8 million over the 5-year period, and
vaccination (US$ 25.7 million). Estimates of the various components of surveillance, vaccination and
biosecurity are also provided in some literature (Table 13).
Against these figures, the analysis of existing data suggests that direct costs of the 2004-05 HPAI
outbreaks (including culling and control costs, excluding consequential on-farm losses) amounted to US$
124.2 (Table 15). Our own estimates of a potential HPAI outbreak occurring in future suggest that, under
the scenarios and assumptions presented in section 6, Vietnam could face total direct costs and losses
(including consequential on-farm losses) of US$ 115.4 million a year.
These direct impacts are compounded by multiple indirect effects as described in Table 14. According to
one source, the outbreak in 2004 is estimated to have resulted to total GDP losses in Vietnam of US$ 0.3
billion for that year alone (Table 6).
The comparison of the relative scale of the required investment for the next 5-10 years (as provided in the
OPI budgets and estimates from literature) against the actual and potential outbreak costs involved is
depicted in Figure 13. It is noted that the national OPI prevention and control figures are totals over a 5
year period, and the estimates of the various prevention and control components from the literature are
totals over a 10 year period, while the outbreak costs are quoted as annual amounts. It is also noted that
comparisons have been made only between the public investment components and the total costs.
Components of an effective prevention and control system covered by the private sector, notably
investment on biosecurity which is normally covered by farmers, have not been taken into consideration
here. The scale of this investment (min US$500-700 in Vietnam) is considered prohibitive for the
smallholder sector (Table 13).
The comparison clearly points to the fact that the potential benefits that can accrue from improving
prevention and control are worth several times the investment. It is noted, however, that this relies on the
assumption that a certain investment would result in gains in productivity and export earnings. The extent
to which this will occur will depend on the effective design and implementation of the investment, to
ensure the effective control of the disease. A risk factor will be the re-appearance of the disease, as is often
the case in practice.
The above calculations do not take into account the incremental operational costs involved, which can be a
significant part of the cost of strengthening VS.
On the other hand, the investment in strengthening the control of a particular disease, e.g. HPAI, can have
important spill-over benefits on the entire VS.
Although these conclusions are made at macro-economic level, they have important implications at microlevel
for individual farmers and other business relying on the poultry sector, particularly in the poorer
rural parts of the Vietnamese population.
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