Economic assessment of foot-and-mouth disease outbreaks in Brazil

Abstract

Foot-and-mouth disease (FMD) outbreaks in cloven-hoofed animals cause substantial economic impacts because of animal depopulation, increased government spending on control, eradication and surveillance measures, and bans on international trade. This study employs a computable general equilibrium (CGE) modeling framework in tandem with results from an epidemiological model to evaluate the economic consequences of a hypothetical FMD outbreak in Brazil. FMD-induced productivity losses and restrictions on international trade of livestock and meat products are applied as exogenous shocks in the economic model. Results show increased bilateral trade of beef and pork, mainly in South America, North Africa, and Russia. Simulated welfare losses in Brazil range from ${\$}$132 million to ${\$}$271 million depending on the severity of trade restrictions imposed. This study expands the rich literature on animal health economics. Results highlight the importance of maintaining the health of Brazilian herds, especially when considering Brazil's position as one of the main meat suppliers in the international market.

Potential economic impacts of foot‐and‐mouth disease in Brazil: A case study for Mato Grosso and Paraná

“…The results of this paper are complementary to the results from Menezes et al (2022). The previous paper uses the same epidemiological data for Paraná as the present study and simulates the economic impacts of an FMD outbreak in Paraná using the GTAP model.…”

“…This shows the uneven distributive effects of FMD outbreaks on the Brazilian society as negative impacts fall predominantly on workers, and consequently, households with lower income. 9 The results of this paper are complementary to the results from Menezes et al (2022). The previous paper uses the same epidemiological data for Paraná as the present study and simulates the economic impacts of an FMD outbreak in Paraná using the GTAP model.…”

“…The outputs of the epidemiological model are used as inputs for the comprehensive interregional CGE model, which allows the simulation of potential FMD‐related economywide effects. This research expands the work of Menezes et al (2022), which uses a similar approach but employs a national‐level model. This study is not an assessment of PNEFA, but the analysis is based on hypotheses related to guidelines established by PNEFA in case of FMD outbreaks in Brazil.…”

“…The present study shows the impacts of an outbreak in Paraná or Mato Grosso on each Brazilian region and on households with different levels of income. Therefore, this research can be considered as a regional, disaggregated evaluation of potential FMD economic impacts in Brazil, while Menezes et al (2022) is a national, aggregated study, with a focus on international trade of beef and pork.…”

“…The epidemiological data used in this study were generated by an FMD spread model for Brazil 3 and were also used by Menezes et al (2022). More details about the model are presented in the Supporting Information: Appendix Section A3.…”