Foreign animal disease can cause serious damage to the United States (US) agricultural
sector and foot-and-mouth disease (FMD), in particular, poses a serious threat. FMD
causes death and reduced fecundity in infected animals, as well as significant economic
consequences. FMD damages can likely be reduced through implementing pre-planned
response strategies. Empirical studies have evaluated the economic consequences of
alternative strategies, but typically employ simplified models. This dissertation seeks to
improve US preparedness for avoiding and/or responding to an animal disease outbreak
by addressing three issues related to strategy assessment in the context of FMD:
integrated multi region economic and epidemic evaluation, inclusion of risk, and
information uncertainty.
An integrated economic/epidemic evaluation is done to examine the impact of various
control strategies. This is done by combining a stochastic, spatial FMD simulation model
with a national level, regionally disaggregated agricultural sector mathematical
programming economic model. In the analysis, strategies are examined in the context of
California's dairy industry. Alternative vaccination, disease detection and movement
restriction strategies are considered as are trade restrictions. The results reported include
epidemic impacts, national economic impacts, prices, regional producer impacts, and
disease control costs under the alternative strategies. Results suggest that, including trade
restrictions, the median national loss from the disease outbreak is as much as $17 billion when feed can enter the movement restriction zone. Early detection reduces the median
loss and the standard deviation of losses. Vaccination does not reduce the median
disease loss, but does have a smaller standard deviation of loss which would indicate it is
a risk reducing strategy.
Risk in foreign animal disease outbreaks is present from several sources; however,
studies comparing alternative control strategies assume risk neutrality. In reality, there
will be a desire to minimize the national loss as well as minimize the chance of an
extreme outcome from the disease (i.e. risk aversion). We perform analysis on FMD
control strategies using breakeven risk aversion coefficients in the context of an outbreak
in the Texas High Plains. Results suggest that vaccination while not reducing average
losses is a risk reducing strategy.
Another issue related to risk and uncertainty is the response of consumers and domestic
markets to the presence of FMD. Using a highly publicized possible FMD outbreak in
Kansas that did not turn out to be true, we examine the role of information uncertainty in
futures market response. Results suggest that livestock futures markets respond to
adverse information even when that information is untrue. Furthermore, the existence of
herding behavior and potential for momentum trading exaggerate the impact of
information uncertainty related to animal disease.
| Identifer | oai:union.ndltd.org:tamu.edu/oai:repository.tamu.edu:1969.1/ETD-TAMU-2009-12-7503 |
| Date | 2009 December 1900 |
| Creators | Hagerman, Amy Deann |
| Contributors | McCarl, Bruce A. |
| Source Sets | Texas A and M University |
| Language | en_US |
| Detected Language | English |
| Type | Book, Thesis, Electronic Dissertation, text |
| Format | application/pdf |
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