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The economic impacts of a hypothetical foot and mouth disease outbreak in Australia

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  • Glyn Wittwer

Abstract

This study uses a multi-country, dynamic quarterly CGE model, GlobeTERM, to estimate the economic impacts of a hypothetical foot and mouth disease outbreak in Australia. State government protocols in response to an outbreak concerning Local Control Areas and disease eradication have local severe short-term economic impacts. However, the national welfare losses arising from the outbreak depend mostly on the duration of trade sanctions by importers of Australian animal products. If an outbreak is contained within several months, and trade sanctions are dropped within a year of the outbreak, the net present value of Australia’s welfare losses may be around $10 billion. If all importers restore Australian access within a year, other than China which delays by 5 years, welfare losses are around $21 billion. In a less likely scenario, in which trade sanctions persist in all trading partners for 5 years after the disease has been eradicated, contrary to international guidelines, welfare losses may exceed $85 billion. Trading partners also suffer welfare losses due to trade sanctions.

Suggested Citation

  • Glyn Wittwer, 2022. "The economic impacts of a hypothetical foot and mouth disease outbreak in Australia," Centre of Policy Studies/IMPACT Centre Working Papers g-338, Victoria University, Centre of Policy Studies/IMPACT Centre.
    • Handle: RePEc:cop:wpaper:g-338
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    1. Tozer, Peter & Marsh, Thomas, 2012. "Domestic and trade impacts of foot-and-mouth disease on the Australian beef industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(3), pages 1-20.
    2. Olivier Mahul & Bernard Durand, 2000. "Simulated economic consequences of foot-and-mouth disease epidemics and their public control in France," Post-Print hal-01952105, HAL.
    3. Adam Blake & M. Thea Sinclair & Guntur Sugiyarto, 2003. "Quantifying the Impact of Foot and Mouth Disease on Tourism and the UK Economy," Tourism Economics, , vol. 9(4), pages 449-465, December.
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    Cited by:

    1. Liu, Xianglong Locky & Nassios, Jason & Giesecke, James, 2024. "To tax or to spend? Modelling tax policy responses to oil price shocks," Energy Policy, Elsevier, vol. 185(C).

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    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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