2294 part 1 final report.pdf - Agra CEAS Consulting

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Prevention and control of animal diseases worldwide Part I: Economic analysis: prevention versus outbreak costs Notes: (i) Includes animal value losses, culling/disposal and control costs (ii) Scenario A includes the following countries: Cambodia, China, Indonesia, Laos, Thailand, Vietnam, S. Korea; Mongolia, Kazakhstan, Russia, Turkey, Romania; Nigeria, Niger, Sudan (iii) Scenario B includes the countries of scenario A plus: N Korea, Malaysia, Brunei, Myanmar, Singapore, Philippines; Bangladesh, Bhutan, India, Nepal, Sri Lanka (iv) Scenario C includes all developing/transition countries, members of the OIE (132 countries in total) Source: “OIE Del1 global costs analysis.xls”, Agra CEAS Consulting. The various indirect costs in the event of an HPAI outbreak have been estimated as a range between 3 possible outcomes from the 3 main scenarios (‘most likely’, ‘low impact’ and ‘high impact’). Global estimates of the indirect impact under the ‘most likely scenario’ are presented on an annual basis and in total terms (i.e. depending on the duration of the impact of the epidemic). Under the ‘most likely’ scenario, ripple costs are estimated at US$ 5.3 billion in terms of domestic market losses in the poultry sector and a further US$ 3.8 billion in terms of export market losses on an annual basis. Assuming a 2 year duration of impact, as is currently the case under the ‘most likely’ scenario based on real market baseline trends, the total ripple impact in terms of domestic and export market losses in the poultry sector would be double the above amounts (i.e. to US$ 10.6 billion and US$ 7.5 billion respectively). The considerable extent to which the relative value of spill-over (tourism) and wider society (human pandemic) costs outweigh the ripple effects is also highlighted. In the case of spill-over effects in the tourism sector alone, these are estimated to amount to US$ 72 billion on an annual basis under the ‘most likely’ scenario and double that amount assuming a 2 year duration of the impact (i.e. US$ 144 billion). Wider society costs, in the event of a human pandemic, are several multiples of all costs, and depending on the severity of the outbreak these are estimated at US$ 311.2 billion (at a 15% attack rate), and at US$ 711.2 billion (at a 35% attack rate) on an annual basis alone. It should be noted that these costs are the minimum expected outcomes, as they exclude certain types of indirect impacts for which it has not been possible to provide estimates on a global scale. Such impacts include ripple effects on upstream/downstream industries (raw material suppliers, catering and distribution, wholesale markets, employment in the sector etc.), spill-over effects (e.g. on the services industry) and other wider society costs (e.g. environmental effects). In this context it is noted that the aim of this study has been to develop a flexible tool, rather than solely providing estimates. This means that the baseline, the assumptions and the scenarios can be improved/refined at any point in time, as further research and evidence on a disease impact becomes available. This tool allows a flexible approach, which highlights the relative importance of the various direct and indirect impacts, so as to provide direction to policy-making in this field. It should also be noted that in this report this tool has been developed specifically for the case of HPAI, but it has the potential to be adapted for application in the case of other TADs such as FMD. Comparing the global cost of prevention and preparedness with that of an outbreak in the case of HPAI, the most recent global needs assessments of prevention and response to HPAI suggest that some US$ 2.27 billion would be required over a 3-year period. Of this amount, prevention and preparedness costs as such account for just over US$ 1 billion. Against this assessment, outbreak costs under the ‘most likely’ scenario and for H5N1 countries only are estimated at US$ 5.34 billion per year for the direct production costs and losses alone (excluding consequential losses) (Figure B). Adding consequential on-farm losses, the total direct impact comes to US$ 11.75 billion per year. Assuming the impact of an outbreak spread over a period of 2 years (‘most likely scenario’) the total direct impacts would be US$ 10.7 billion Civic Consulting • Agra CEAS Consulting 12
Prevention and control of animal diseases worldwide Part I: Economic analysis: prevention versus outbreak costs excluding consequential on-farm losses and US$ 23.5 billion if these losses are included. Moving towards scenarios B and C these costs increase further to US$ 12.3 billion and US$ 26.9 billion respectively (in the case of scenario B) and to US$ 19.4 billion and US$ 42.7 billion respectively (in the case of scenario C). Before even considering the indirect impacts the benefits of improved prevention therefore by far outweigh the potential outbreak costs and losses. Figure B: Prevention versus outbreak costs: comparison under various scenarios, HPAI Total impact including ripple (domestic and export market), most likely scenario / A (total) Total impact including ripple (domestic and export market), most likely scenario / A (annual) Total direct impact (incl. consequential losses), most likely scenario / B (total) Total direct impact (incl. consequential losses), most likely scenario / B (annual) Total direct impact (incl. consequential losses), most likely scenario / A (total) Total direct impact (incl. consequential losses), most likely scenario / A (annual) Direct production costs/losses, most likely scenario / A (total) Direct production costs/losses, most likely scenario / A (annual) Prevention and control of HPAI: global needs (WB) Prevention system for HPAI: global needs (WB) 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 billion US$ Notes: HPAI global needs figures are totals over a 3 year period; Incremental operational costs (a significant part of the total costs of strengthening VS) are excluded from these calculations, due to lack of data; Outbreak costs are quoted in annual and total amounts (total here refers to the duration of the impact, which is assumed to last for 2 years in the most likely scenario). Source: “OIE Del1 global costs analysis.xls”, Agra CEAS Consulting. The report concludes by noting that it is difficult to predict the severity of the threats posed by Transboundary Animal Diseases (TADs). Moreover, different issues arise depending on the nature of the disease. A disease such as HPAI, with its high public health relevance, poses a different set of challenges than a disease such as FMD which has purely commercial and socio-economic implications. Both Civic Consulting • Agra CEAS Consulting 13
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Annexes Prevention and control of a
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