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An Economic Assessment of the BSE Crisis in Canada: Impacts of Border Closure and BSE Recovery Programs

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  • Weerahewa, Jeevika
  • Meilke, Karl D.
  • Le Roy, Danny G.

Abstract

Using a static, multi-market, partial equilibrium model this paper assesses the economic consequences three alternative government responses to the BSE crisis in Canada: 1) expansion in slaughter capacity, 2) partial destruction of the cattle herd, and 3) deficiency payments. Each of these policies is evaluated under four different border situations 1) free trade in young beef only, the 2004 baseline situation; 2) autarky; 3) free trade in young beef and cattle; and 4) complete free trade. The results of the policy analysis are quite sensitive to the border assumptions employed making it impossible to select a "best" policy without perfect foresight with respect to the timing and the degree of border opening.

Suggested Citation

  • Weerahewa, Jeevika & Meilke, Karl D. & Le Roy, Danny G., 2007. "An Economic Assessment of the BSE Crisis in Canada: Impacts of Border Closure and BSE Recovery Programs," Working Papers 24154, Canadian Agricultural Trade Policy Research Network.
    • Handle: RePEc:ags:catpwp:24154
    DOI: 10.22004/ag.econ.24154
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    File URL: https://ageconsearch.umn.edu/record/24154/files/wp070001.pdf
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    References listed on IDEAS

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    1. Giancarlo Moschini & Karl D. Meilke, 1992. "Production Subsidy and Countervailing Duties in Vertically Related Markets: The Hog-Pork Case Between Canada and the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(4), pages 951-961.
    2. Danny G. Le Roy & K.K. Klein, 2005. "Mad Cow Chaos in Canada: Was It Just Bad Luck or Did Government Policies Play a Role?," Canadian Public Policy, University of Toronto Press, vol. 31(4), pages 381-400, December.
    3. Le Roy, Danny G. & Weerahewa, Jeevika & Anderson, David P., 2005. "Disruption in the NAFTA Supply Chain for Beef and Cattle: An Evaluation of Possible Policy Responses," 2005 NAAMIC Workshop II: Agrifood Regulatory and Policy Integration under Stress 163865, North American Agrifood Market Integration Consortium (NAAMIC).
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    Cited by:

    1. Sarker, Rakhal & Ratnesena, Shashini, 2014. "Revealed Comparative Advantage and Half-A-Century Competitiveness of Canadian Agriculture: A Case Study of Wheat, Beef and Pork Sectors," Working Papers 165675, Canadian Agricultural Trade Policy Research Network.
    2. Randall Wigle & Jeevika Weerahewa & Maury Bredahl & Sudarma Samarajeewa, 2007. "Impacts of BSE on World Trade in Cattle and Beef: Implications for the Canadian Economy," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 55(4), pages 535-549, December.
    3. Jared G. Carlberg & Derek G. Brewin & James I. Rude, 2009. "Managing a Border Threat: BSE and COOL Effects on the Canadian Beef Industry," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(4), pages 952-962, December.

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    Livestock Production/Industries;

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