The following points highlight the direct cost incurred for managing and treating farm animal disease.
1. Cost Incurred for Treating Large Animal Disease:
Estimates of disease costs based on the output of epidemiological models can draw on scientific knowledge of the mechanisms that govern disease spread. They may thereby escape any bias inherent in studies based on empirical observation. More likely, they will be used in the absence of data necessary for economic analysis.
The problem of infertility in dairy cows (and even some disease problems) is in part due to negative genetic correlations with milk yield and therefore progressive deterioration in response to selection for milk yield. It must therefore be tackled at national level by widening breeding goals.
It will be important to include the benefits of improved fertility in any economic evaluation of such diseases. These are often seen in the short-term as greater output of milk per unit time and reduced replacement costs. However, fertility has a long-term benefit at whole- herd level as it allows the productive animals to be supported by a smaller replacement rearing herd.
Production targets can therefore be met from fewer animals, putting less pressure on the land and resulting in a more sustainable agricultural system. It also facilitates the maintenance of a closed-herd which in turn reduces the risk of introducing disease. By incorporating the long-term effects of fertility on land value, the apparent benefits of fertility will be much enhanced.
It is important to put the cattle disease costs into the context of returns from the associated farm enterprises. By doing so, the relative economic importance of animal disease to fanners can be gauged. The power of such figures to persuade fanners to invest in disease prevention strategies can then be assessed.
2. Cost Incurred for Treating Small Animal Disease:
Foot-rot is one of the most important contagious diseases affecting sheep and should be a high priority for farm-level economic analysis and associated knowledge transfer to farmers.
The main risk factors for lamb mortality are low birth-weight and low serum immunoglobulin concentration. Both factors will be influenced by disease in the pregnant ewe and in the newborn lamb. Rather like fertility in cattle, lamb mortality may be a useful key performance indicator on which to base a knowledge transfer programme to farmers aimed at disease prevention.
Economics of Animal Disease; Total Cost or Avoidable Losses:
The main reason for discrepancy between published disease costs and farmer experience is that most published estimates give the total cost and not the avoidable losses. For many endemic diseases, most of the output loss and some of the control costs will be unavoidable even under best practice. For exotic diseases, it may be prudent to incur some recurrent expenditure in order to reduce the risk of an outbreak.
Such costs are already part of farmers’ income calculations. Total disease costs are therefore inappropriate for direct knowledge transfer to farmers because they give a false impression of the investment potential of disease prevention. However, it may at least provide a first crude, though imperfect, indication of which diseases might give the greatest potential economic benefit from control. Total costs are justified because they can be estimated within inherent livestock disease information constraints.
In general, the greater the expenditure on disease controls, the lower the output loss from the disease. However, at any given level of disease control expenditure, there is a wide range of output losses. Strategies that give the lowest output loss at each level of control expenditure form the loss-expenditure frontier. The point on this frontier that gives the lowest total cost is found on the iso-cost line tangential to the loss-expenditure frontier.
3. Cost Incurred on Initiating Health Schemes for Controlling Farm Animal Disease:
Private health and productivity schemes need to be developed in response to the realisation that most diseases are multifactorial in nature and therefore required a more holistic approach based on herd health rather than ‘fire brigade’ attention to individual animals by the veterinary surgeon.
Early initiatives in the dairy sector involved regular planned health visits from the veterinary surgeon to individual farmer clients. More recent initiatives have extended into the sheep and beef sectors and may involve more formal planning, perhaps as part of a multi-farmer group.
The importance of these schemes is likely to grow given the emphasis on disease prevention and the shortage of large animal veterinary practices to carry out ‘fire brigade’ work. The goals of these schemes are to identify disease problems, priorities them and then plan, implement, monitor and control a programme of remedial actions that are technically and economically efficient.
The activities associated with this type of health scheme are referred to as ‘farm health planning’ in the outline health and welfare strategy. In the dairy cow at least, early signs of disease may be very subtle, involving disruption of the normal association between weight change and production rather than a sudden drop in productivity. By using developments in information technology to spot such changes, health scheme members may be able to react more quickly and hence more effectively to impeding health/welfare problems.
As well as or instead of ‘farm health planning’, some health schemes aim to detect, eradicate and then demonstrate continued freedom from specific diseases in the members herd/flock. If such schemes deal with specific epidemic or zoonotic diseases they are the proper preserve of the public sector. However, in recent years, many schemes associated with specific endemic diseases have been privatized.
By doing so, a supply of breeding stock of certified health status becomes available to all farmers. The process also allows timely control or preventive action to be taken. An important aspect of these schemes is biosecurity; i.e., ensuring that once a disease is eliminated it is not reintroduced into the herd/flock. This is a painstaking and potentially expensive aspect of scheme membership. Biosecurity measures are valuable to scheme members and indicate the best way to allocate resources to biosecurity activities.
The costs of preserving health status may be greatly reduced if all farmers in a region are committed to an appropriate health scheme. This point can be exploited in remote areas of the country. However, as long as health schemes are voluntary, the problem of ‘free-riders’ makes it difficult to achieve eradication in more extensive regions. Nevertheless, some countries are committed to eradication of endemic cattle diseases such as BVD differentiation between countries in terms of animal health status could therefore arise and impede progress towards global free trade in livestock.
There is also the problem of number and diversity of health schemes in agriculture. Health schemes may exist to provide farm assurance, improve animal welfare, protect public health, reduce dependence on pharmaceuticals and facilitate administration as well as improve productivity or eliminate specific diseases. Given that the best interests of all stakeholders will not coincide there will be a need for some intervention to strike an appropriate balance.
A promising initiative that addresses some of the issues combines health planning and surveillance with disease eradication. It is a farmer-directed business that aims to create a pool of high health status herds for farms. The mandatory core of the programme involves annual veterinary inspections and associated health plans. A key element is an educational component for farmers to encourage uptake.
This is centred on participating veterinary practices linked by computer network and e-mail to a central database. Details of farm visits are recorded on this database and made available for outside evaluation on a ‘need to know’ basis. These features ensure credibility through transparency and traceability. The next step is to link the whole system to other quality assurance programmes.
4. Cost Incurred for Managing Risk of Farm Animal Disease:
Although aetiology and disease management (preventive measures and monitoring programmes, etc.) is an important strategy, it is only part of an integrated approach. It follows that under increased world trade competition; preventive veterinary medicine is likely to be of increasing importance to farmers as part of a wider strategy for risk management.
The importance of disease in wider farm business risk management and the inherent risks associated with animal disease have led to the use of standard risk management techniques in animal health economics. Such techniques are often termed ‘decision analysis’. Decision analysis often involves construction of a decision tree as a pictorial representation of the flow of events including both decisions (e.g., treatment options) and possible outcomes (e.g., mortality).
The sum of probability weighted monetary values associated with each possible outcome is known as the expected value of the decision option. Decision options can be selected on the basis of their expected values. The approach is explicit, quantitative and prescriptive. It is flexible and easily understood.
Although uncertainty often surrounds many of the quantitative assumptions, methods have been developed to elicit subjective values from the decision-maker. The aim is to make the best decision given the available information. This will not always be the right decision but the process can greatly improve the understanding of the decision-maker and his/her advisers.
Greater understanding will improve subsequent decisions and raise awareness of key issues such as the relative impact of animal health on farm incomes and farm income risk. These features make decision analysis a useful basis for knowledge transfer in support of the animal health and welfare strategy. However, most recent applications in animal health economics have been aimed at decision-makers beyond the farm gate, while studies of farmer decision-making in this context suggest a more subjective approach.
Care is needed when using average costs of disease and standard measures of dispersion to support farm level decision-making under risk. This is because the distribution of such costs is often skewed.