Input-Output Analysis: The Case of Foot-And-Mouth Disease in Brazil

Brazil is an important supplier of meat on the international market, occupying the position of largest exporter of beef and fourth largest exporter of pork. As a result, the country increasingly needs to implement measures to ensure compliance with the health requirements imposed by the markets that import these products. A widely discussed issue, in this context, is foot-and-mouth disease (FMD), a highly contagious disease that affects animals with bipartite hooves and causes several restrictions on trade between countries. This paper aims to measure the economic impacts of an outbreak of FMD, from the closure of importing markets for beef and pork from Brazil, using an Input-Output model. The results show that the closing of the international market could cause a reduction in the value of Brazilian production between R$ 7.1 billion and R$ 8.1 billion, a drop in GDP between R$ 2.6 billion and R$ 3 billion, in addition to reducing the number of employed people by 60-70 thousand. These losses are approximately 30 times greater than the budget spent on agricultural defense by the Brazilian government. The results indicate that adverse events to animal health can cause significant socioeconomic losses, showing the importance of maintaining the health of herds in Brazil.