NON-INDEMNIFICATION COSTS

The values for government costs used in the 2010 SSRA are adjusted for inflation and are used to determine government non-indemnification costs. There is extensive reporting of depopulation and vaccination costs in Section 6, but it is not clear why that information is not used to model economic impact in Section 7 of the uSSRA. Government costs that would have been incurred regardless should be excluded, and only additional costs incurred by government should be included; otherwise, the estimated government non-indemnification costs that are reported are higher than the actual additional costs incurred.

SUMMARY

The economic modeling approaches used in the uSSRA are frameworks that, if used properly, can address the economic impacts of an FMD outbreak that results from a breach of containment at the NBAF. The uSSRA attempts a more comprehensive analysis than existing analyses. Nevertheless, there remain concerns about the uSSRA. The information provided in the text and tables is insufficient to determine whether the analysis was done correctly. There are concerns about aggregating the results of differing modeling approaches into an aggregate economic impact. The economic consequences are generated from results obtained in the epidemic modeling. The committee believes those depopulation and duration estimates are underestimated, and consequently the supply reductions and the demand reductions used as inputs into the economic analysis are also underestimated.

REFERENCES

Ekboir, J.M. 1999. Potential Impact of Foot-and-Mouth Disease in California: The Role and Contribution of Animal Health Surveillance and Monitoring Services. Agricultural Issues Center, Division of Agriculture and Natural Resource, University of California, September 1999.

Hagerman, A.D., B.A. McCarl, T.E. Carpenter, M.P. Ward, and J. O’Brien. 2012. Emergency vaccination to control foot-and-mouth disease: Implications of its inclusion as a U.S. policy option. Appl Econ Perspect Pol 34(1):119-146.

Paarlberg, P.L., J.G. Lee, and A.H. Seitzinger. 2002. Potential revenue impacts of a foot and mouth disease outbreak in the United States. J. Am. Vet. Med. Assoc. 220(7):988-992.

Paarlberg, P.L., A. Hillberg Seitzinger, J.G. Lee, and K.H. Mathews Jr. 2008. Economic Impacts of Foreign Animal Disease. Economic Research Report ERR-57. Economic Research Service, U.S. Department of Agriculture: Washington, DC.

Pendell, D.L., T.C. Schroeder, J. Leatherman, and G.S. Alward. 2007. The economic impacts of a foot-and-mouth disease outbreak: A regional analysis. J Agr Appl Econ 39:19-33.



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