The Economic Impact of Crop and Livestock Diseases

Infectious disease is one of the few reasons authorized by the World Trade Organization for blocking imports of agricultural products. Restrictions on trade may continue for up to two years, resulting in lost sales ranging from millions to tens of billions of dollars. For example, after karnal bunt, a fungal disease of wheat, was discovered in north Texas in 2001, more than 25 countries banned wheat imports from the four affected counties, resulting in a loss of revenue of about $250 million.⁴

Animal diseases can also have a major economic impact. A highly pathogenic form of avian influenza known as the “fowl plague” first appeared in Italy around 1878. Since then pathogenic avian influenza was first recognized in the United States in 1924-25. In 1983, an outbreak of highly pathogenic avian influenza occurred in Pennsylvania that took two years to control and required the destruction of some 17 million chickens. The direct costs of the outbreak were $62 million, and the indirect costs were estimated at more than $250 million.⁵ Similarly, an outbreak of mad-cow disease in England in the 1990s cost between $9 billion and $14 billion in compensation costs to farmers and laid-off workers, and another $2.4 billion from loss of export markets.¹

The accidental or intentional release of a major agricultural pathogen would have serious economic effects, resulting in production losses, market declines, and increased unemployment in the food and agriculture sector. Quarantines and restrictions on animal movement in the disease-affected regions would paralyze the rural economy. Moreover, even a small outbreak of a serious animal disease would prompt trading partners to impose strict embargoes on imports of livestock and animal products that could carry the infectious agent.