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Agricultural Household Response to Avian
Influenza Prevention and Control Policies
Presented by
Robert H. Beach, Christine Poulos, and Subhrendu K. Pattanayak
RTI International
Presented at
Southern Agricultural Economics Association Annual Meetings
Mobile, Alabama, February 4-6, 2007
3040 Cornwallis Road
Phone 919-485-5579
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e-mail [email protected]
RTI International is a trade name of
Research Triangle Institute
Avian Influenza
„
Avian Influenza (AI) viruses occur naturally among wild birds and
generally cause only minor symptoms from which the birds rapidly
recover
„
Many subtypes of AI that vary in pathogenicity and infectivity
„
Classified by the combination of two proteins on the surface of the
virus
z
Hemagglutinins (H1 through H16)
z Neuraminidases (N1 through N9)
„
Numerous strains generally categorized into
z
Low pathogenicity avian influenza (LPAI)
‹ Generally causes only mild illness in birds
z Highly pathogenic avian influenza (HPAI)
‹ Extremely infectious, causes severe illness, and can reach
mortality rates above 50% and often reaching 90-100% in
domesticated poultry, often within 48 hours
2
Strains of Avian Influenza
„
LPAI is endemic in wild birds and outbreaks in poultry are not
unusual and have occurred in countries throughout the world
z
3
Certain birds, particularly migratory waterfowl, often carry the
virus while showing no outward signs of illness, but shedding
virus in saliva, nasal secretions, and feces
„
However, some strains of LPAI (H5 and H7) can rapidly mutate and
become highly pathogenic, especially when moving between bird
species
„
Domestication of poultry has created species subtypes that can be
infected by an AI virus adapted to waterfowl and have it mutate
rapidly into a strain of HPAI
HPAI Infection
„
Poultry can become infected through:
z
Primary introduction of HPAI
‹
‹
z
Secondary transmission
‹
‹
‹
‹
‹
4
Contact with infected wild birds
Live bird markets
ƒ Contamination of people, equipment, or vehicles
Infectivity (amount of virus produced by infected flock)
Susceptibility (amount of virus needed to infect susceptible
bird)
Amount of virus transferred during contact
Contact rate
Number of flocks that make contact
H5N1
5
„
Since 2003, outbreaks of A(H5N1) have led to the death of hundreds of
millions of birds through disease mortality or culling (primarily chickens
and ducks on farms), primarily in Southeast Asia
z FAO estimates $10 billion in losses to SE Asian poultry farmers
„
Adding to economic impacts are trade restrictions and negative demand
shocks
z Livestock disease (particularly zoonotic) potentially results in both
short-run and long-run changes in consumption patterns
„
In addition, the disease has infected humans in 11 countries
z 270 confirmed human cases of H5N1 in humans since 2003 and 164
deaths (60.7% fatality rate) (WHO, January 2007)
„
There is concern that H5N1 could mutate into a form that could spread
between humans, which could lead to a global pandemic
z Estimates that millions of people would be killed (WHO, 2004) and
global economic losses in the hundreds of billions or even trillions of
dollars (e.g., McKibbin and Sidorenko, 2006)
Outbreaks of H5N1 in Poultry
6
Large Potential Impacts for Southern U.S.
7
„
HPAI can have major economic impacts on the poultry industry and
regional agricultural economy
„
U.S. is the world’s largest producer and second-largest exporter of
poultry meat and one of the world’s largest egg producers
z Farm sales of poultry meat and eggs over $28 billion in 2005
„
U.S. poultry production is concentrated in the south
z Georgia – 1.32 billion broilers (15%)
z Arkansas – 1.21 billion broilers (14%)
z Alabama – 1.06 billion broilers (12%)
z Mississippi – 853 million broilers (10%)
z North Carolina – 735 million broilers (8%)
z Texas – 628 million broilers (7%)
z Kentucky – 298 million broilers (3%)
Poultry and Eggs as Percentage of Total
Agricultural Market Value
8
9
Source: Obtained from http://www.topix.net/search/ on December 22, 2006 using "avian or bird" and "flu or influenza" as
search terms.
12
/2
1/
6
06
00
20
/2
06
6
06
00
20
6
6
6
6
06
00
00
00
00
20
/2
3/
/7
/2
12
11
6/
6
06
20
/2
/2
/2
/2
6
06
00
20
2/
/9
/2
/1
28
14
31
17
11
10
10
9/
9/
8/
8/
6
6
6
6
6
06
00
20
/2
3/
20
8/
7/
/2
6/
22
7/
6/
00
00
00
00
00
6
06
00
20
/2
/2
/2
/2
/2
/2
8/
25
11
27
13
30
16
6/
5/
5/
4/
4/
3/
3/
6
06
00
20
/2
2/
16
3/
2/
20
6
06
05
00
20
20
/2
2/
19
2/
1/
2/
5/
/2
1/
12
Global Media Index for Avian Influenza
600
500
400
300
200
100
0
10
19
/
2/
20
06
2/
20
2/
0
16 6
/2
0
3/ 06
2/
20
3/
0
16 6
/2
3/ 006
30
/2
4/ 006
13
/2
4/ 006
27
/2
5/ 006
11
/2
5/ 006
25
/2
0
6/ 06
8/
2
6/ 006
22
/2
0
7/ 06
6/
20
7/
0
20 6
/2
0
8/ 06
3/
20
8/
0
17 6
/2
8/ 006
31
/2
9/ 006
14
/2
9/ 006
28
/
10 200
/1
6
2/
10 200
/2
6
6/
2
11 006
/9
/
11 200
/2
6
3/
2
12 006
/7
/
12 200
/2
6
1/
20
06
1/
05
00
6
/2
0
5/
2
/2
2
1/
12
Media Index for Avian Influenza:
United States
300
250
200
150
100
50
0
Source: Obtained from http://www.topix.net/search/ on December 22, 2006 using "avian or bird" and "flu or influenza" and
country name as search terms.
Outbreaks in 2007
„
Europe/Near East
z Azerbaijan – suspected human case
z Britain – first case of HPAI in captive birds this week (2,600 birds died, >160,000 to be
culled); has increased fears of spread across Europe
z Hungary – H5N1 in goose farms (90 birds died, 3,265 culled)
„
Africa/Middle East
z Egypt – 1 human death
z Nigeria – 1st human case; concerns that official quarantine is not being enforced
„
Asia
z
z
z
z
z
z
z
11
Hong Kong – 2 poultry outbreaks suspected
Indonesia – 6 human cases (5 deaths), poultry outbreaks, mass culling in Jakarta
Japan – 3 poultry outbreaks (7,032 birds died, 69,468 culled)
Russia – 1st outbreak of the season this past week
South Korea – 5 outbreaks (9,757 birds died, 319,746 culled)
Thailand – 3 provinces with poultry outbreaks (336 died, 3,734 culled)
Viet Nam – 52 poultry outbreaks (10,314 birds died, 15,485 culled)
AI Outbreaks: Turkey
Source: http://declanbutler.info/blog/?cat=6
12
13
Animal Outbreaks
Human Cases
Fresh Chicken
Media Index/10
Sep 25 2006
Sep 04 2006
Aug 14 2006
Jul 24 2006
Jul 03 2006
Jun 12 2006
May 22 2006
May 01 2006
Apr 10 2006
Mar 20 2006
Feb 27 2006
Feb 06 2006
Jan 16 2006
Dec 26 2005
Dec 05 2005
Nov 14 2005
Oct 24 2005
Oct 03 2005
AI Events/Media Index
70
60
50
40
30
20
10
0
1,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Fresh Chicken Sales (kg
Turkey - Fresh Chicken
AI Outbreaks: Italy
Source: http://declanbutler.info/blog/?cat=6
14
15
European Media
Source: Lexis-Nexis Academic database
Italy Specific
Sep 10 2006
Aug 13 2006
Jul 16 2006
Jun 18 2006
May 21 2006
Apr 23 2006
Mar 26 2006
Feb 26 2006
Jan 29 2006
Jan 01 2006
Dec 04 2005
Nov 06 2005
Oct 09 2005
Sep 11 2005
Aug 14 2005
Jul 17 2005
Jun 19 2005
May 22 2005
Apr 24 2005
Mar 27 2005
Feb 27 2005
Jan 30 2005
Jan 02 2005
Dec 05 2004
Nov 07 2004
Oct 10 2004
Sept 12 2004
Aug 15 2004
European Media Index
3,000
600
2,500
500
2,000
400
1,500
300
1,000
200
500
100
0
0
Italy Media Index
Avian Influenza Media Indices Used in
Analysis of Italian Meat Consumption
Elasticities of Poultry Demand with Respect
to Media Reports on Avian Influenza
16
„
Calculated elasticity with respect to media reports at sample means for
the two media indices used
„
Long-run elasticities (40-week period)
z Fresh (-0.088 avrow; -0.061 avit)
z Frozen/processed (-0.024 avrow; -0.118 avit)
„
Estimates indicate that news outside of Italy had more impact on
consumption of fresh poultry than Italy-specific news
z No domestic outbreaks until Feb 2006, almost 18 months after the
start of our sample
z Italian consumers may have already partially adjusted to AI news
from other regions
„
The opposite is found for frozen/processed poultry, where Italy-specific
news had a much larger impact on consumption
17
European and Italy-specific media
European media only
Sep 24 2006
Aug 13 2006
Jul 02 2006
May 21 2006
Apr 09 2006
Feb 26 2006
Jan 15 2006
Dec 04 2005
Oct 23 2005
Sep 11 2005
Jul 31 2005
Jun 19 2005
May 08 2005
Mar 27 2005
Feb 13 2005
Jan 02 2005
Nov 21 2004
Oct 10 2004
Weekly sales as a proportion of simulated sales without media reports o
Simulated Effects of AI Concerns on Italian
Fresh Poultry Sales, Proportionate Change
1.00
0.90
0.80
0.70
0.60
0.50
18
European and Italy-specific media
European media only
Sep 24 2006
Aug 13 2006
Jul 02 2006
May 21 2006
Apr 09 2006
Feb 26 2006
Jan 15 2006
Dec 04 2005
Oct 23 2005
Sep 11 2005
Jul 31 2005
Jun 19 2005
May 08 2005
Mar 27 2005
Feb 13 2005
Jan 02 2005
Nov 21 2004
Oct 10 2004
Weekly sales as a proportion of simulated sales without media reports on
Simulated Effects of AI Concerns on
Frozen/Processed Poultry Sales, Proportionate
1.00
0.90
0.80
0.70
0.60
0.50
European Media Index
Poultry Production and Avian Influenza
Table 1. Classification of Poultry Production Systems
System
Biosecurity
Bird and product
marketing
Sector 1
Sector 2
Sector 3
Sector 4
Industrial
integrated
Commercial
Commercial
Village or
backyard
High
Moderate to high
Low to minimal
Minimal
Commercial
Usually
commercial
Birds usually
sold in live bird
markets
Birds and
products
consumed locally
Source: FAO (2004).
19
„
Scale and production technology vary enormously between and within
countries
„
Sectors 3 and 4 generally considered to be more susceptible to infection
due to low levels of biosecurity, although losses may be larger in the event
of an infection in Sector 1 and concentration of birds may increase
probability of virus circulation and mutation
Poultry Systems in Southeast Asia
Country
Cambodia
Sector 1
Sector 2
Sector 3
Sector 4
Believed not to exist
~0.4 million poultry
0.4 million chickens
0.8 million ducks
99.9% of farms and
90% of poultry (12
million chickens and
2.7 million ducks)
Indonesia
9.7 million poultry, export
oriented but large
proportion for national
consumption
58.2 million poultry
for the national
market
32.4 million poultry
174 million poultry
Lao PDR
Believed not to exist
Relatively
insignificant
10% of poultry
90% of poultry
Thailand
70% of national
production, important
export market
20% of national
production
36% of farms and
7% of production
61% of farms and
3% of production
Viet Nam
Relatively insignificant
20-25% of
production, but very
few producers
10-15% of
production, but very
few producers
65% of production
with possibly 70%
of the country’s
population involved
Source: Rushton et al. (2005).
20
Duck Production Systems in Thailand
21
„
A) Closed system with high
biosecurity, an evaporative
cooling system, and strict
entrance control.
„
B) Open system but with netting
to prevent entrance of birds.
Biosecurity was not strictly
enforced. This system is no
longer approved for the raising of
poultry.
„
C) Free-grazing ducks.
Biosecurity is never practiced in
this system.
„
D) Backyard Muscovy ducks; no
biosecurity is practiced in this
system
Free-grazing duck husbandry in Asia
22
„
Found to be important risk factor
in spreading HPAI in duckproducing regions of Asia
„
Ducks infected with H5N1 may
show few clinical signs while
shedding enough of the virus to
form a potential reservoir for
continued infections
„
Frequently rotated between rice
paddy fields after rice harvest to
feed on leftover rice grains,
insects, and snails
„
Come into contact with wild birds
and then brought together with
other flocks of free-grazing ducks
and other poultry as they are
rotated
H5N1 in Thai Production Systems
23
„
Songserm et al (2006) conducted tests for H5N1 during the 2004
outbreak in Thailand that resulted in 60 million poultry being killed
„
Found no H5N1 in the closed industrial system (about 1% of every flock
was sampled before slaughter, over 10,000 birds)
„
H5N1 was found in all three open systems:
z Open house system: 4/17 flocks (23.5%) tested positive
z Free-grazing duck system: 28/61 flocks (45.9%) tested positive
‹ 10 flocks studied in more detail; no evidence of H5N1 while they
were in brooding houses but all 10 tested positive within 12-63
days of moving to rice fields
z Backyard poultry: 56% of backyard chicken flocks and 27% of
backyard duck flocks tested positive
Responses to Outbreak in Viet Nam
24
„
Delquigny et al. (2004) examined three outbreaks in Viet Nam and found highly varied
responses
„
In the first outbreak, the company notified the Vietnamese veterinary services of high
death rates and the birds in the region were destroyed, although the level of
destruction of birds and eggs varied across villages
„
In a second outbreak that took place in a village with no official veterinary services,
data collected on the fate of sick and apparently healthy birds showed that almost 29%
of sick birds and 56% of healthy birds were consumed, 70% of sick birds and 8% of
healthy birds were destroyed, and 1% of sick birds and 36% of healthy birds were sold
„
The third outbreak took place on two commercial farms. In a 5,000 bird broiler farm,
chickens began dying on day 1 with 50% mortality by the end of day 2. On day 3, the
remaining birds were killed and buried using quicklime. In a 1,200 bird layer farm, 50%
of hens died by the second day of the outbreak, but the farmer sold the rest to a
trader. The farm also had 600 chicks that all died on the third day and were disposed
of in a public rubbish area.
„
Thus, in addition to the importance of incentives for reporting disease and ensuring
that infected birds are destroyed, proper incentives are also necessary for
encouraging adequate procedures for disposal of infected carcasses
Prevention and Control Measures
25
„
Provision of information and technical assistance
„
Disease surveillance
„
Improved biosecurity practices
„
Culling and disposal
„
Vaccination
Information and Technical Assistance
26
„
Poultry producers may not have sufficient information on HPAI
and appropriate disease prevention and control strategies to
make efficient decisions on adoption of control measures
„
Backyard growers may not be aware of the potential severity of
HPAI and could have more difficulty identifying an outbreak
because villagers in many developing countries may accept
significant poultry losses as “normal” (Rushton et al., 2004)
„
Development and dissemination of this information lowers the
private cost of control measures for producers by reducing the
time and human capital required to identify and adopt
appropriate actions, thereby increasing expected adoption
Disease Surveillance
„
Another important measure for controlling the spread of disease
is surveillance of poultry operations to monitor birds for disease
and immediately report any suspected cases of AI
„
Proper incentives are vital for inducing producers to report
suspected outbreaks
z
„
27
In some Asian countries, low or no compensation for birds
lost is a significant impediment to disease reporting
As part of surveillance, it is important to understand the
epidemiology, ecology, and economics of the disease and
assess spatial and temporal patterns to improve the
effectiveness of control programs
Improved Biosecurity Practices
„
28
Strict biosecurity practices that prevent exposure to any animals or
other items potentially contaminated with AI are vital for preventing and
controlling the spread of disease
z
Closed poultry housing
z
Ensure wild birds cannot access poultry feed and water supplies
z
Isolate new birds or avoid their introduction into existing flocks
z
Limit access to poultry houses and thoroughly clean all clothing,
shoes, equipment and vehicles before and after coming in contact
with birds
z
Restrictions on transportation and marketing, especially at live bird
markets
Culling and Disposal
29
„
Culling infected birds as well as birds that may have come in
contact with the sick birds has been a typical response to an
HPAI outbreak and is often credited with limiting the spread of
the disease, particularly in countries such as Hong Kong and
Thailand, which moved quickly to quarantine and destroy
potentially affected flocks
„
Reduces flock infectivity by removing the flock altogether
„
In conjunction with surveillance, early detection and culling
reduces amount of virus produced by infected birds
„
Compensation level is vital for producer cooperation
Vaccination
„
Vaccination reduces the probability of infection and the amount of virus
produced by an infected flock
„
Currently being used in several countries, including Indonesia, Viet
Nam, and China, which has instituted a major initiative to inoculate
poultry in areas considered susceptible to AI infection
z
30
China inoculated 2.68 billion birds, primarily chickens, ducks, and
geese between February 2004 through January 2005
„
Potentially costly to administer
„
Concerns that vaccination may suppress the symptoms of the virus for
vaccinated birds that get infected, allowing it to continue spreading
without notice – e.g., Thailand and South Korea are not vaccinating
Farm-level behavior
31
„
Increase in risk of poultry production will provide incentives
to shift away from poultry production towards non-poultry
farm production and non-farm income, other things being
equal
„
Because of potential income losses (and the fact that
human cases have generally been poultry workers in direct
contact with live infected birds), there are clearly incentives
for poultry farmers to take precautions against HPAI
„
Nonetheless, there are externalities that will not be fully
taken into account
Adoption of Control Measures
„
32
Producers adopt control measures to the point that the private
marginal benefits are equal to the private marginal costs
z
Tend to under-invest relative to socially optimal level
z
Decision to invest in avoiding primary introduction depends
on the farmer’s ability to impact likelihood of introduction into
region
‹ For regions where HPAI is not yet present, producers
may determine it is optimal not to invest in avoiding
introduction into the area if they have little impact on
probability of regional introduction
Public Policy
33
„
Providing information to improve private decision-making
„
National surveillance program
z Analyze the epidemiology, ecology, and economics of the disease and
assess spatial and temporal patterns to improve the effectiveness of control
programs.
„
May be welfare-improving for government to compel or provide incentives for at
least some producers (often largest) to adopt biosecurity (Hennessey, 2006)
„
Once these producers have adopted, the probability that other farmers would be
the source of introduction increases, which may make it optimal for them to adopt
as well
„
Similarly, vaccination of a certain fraction of the susceptible population by
government may help avoid major epidemic
„
In the event of an outbreak, government involvement in proper culling and
disposal likely to be important
Compensation
„
Producer compensation for losses is a major issue
„
Costly for governments to provide, but important tool for reducing
severity of outbreaks
„
Too low
„
34
z
Less surveillance
z
Do not report suspected infections
Too high
z
Little incentive for costly control measures to avoid HPAI
z
Possibly even incentive to get birds infected!
Current Compensation Levels
35
„
Varies widely
z Thailand: 70-100% of market price
z Viet Nam: 20-30% before being raised to 50-60% in November 2005
z China: 80% of market price
z Cambodia: 0%
z Egypt and Nigeria provide compensation, but exclude smallholders
z Canada: 100% market value after adjustments for age and salvage value
z US: 100% of costs associated with eradication (for H5/H7 LPAI, those involved in the
National Poultry Improvement Plan are also eligible for 100%, 25% for those that are
not as of September 2006)
„
The Economist reported in late January 2007 that
z Indonesia is offering equivalent of $1.38 per bird but the central government has
expressed concern that local authorities have been slow to pay
z China’s central government has promised to spend $1 billion over the next two years on
HPAI and other animal epidemics, but there have been concerns that local officials do
not report all outbreaks, are slow to investigate others, and have been slow to cull
infected birds due to the cost of poultry farmer compensation
Conclusions
36
„
Poultry producers play a vital role in containing HPAI
„
Spatial dimension of agricultural production is important for
infectious animal diseases
„
There are averting and mitigating options available to farm
households, but numerous barriers to adoption especially in
smallholder systems
z Information and resource constraints
z Social and cultural barriers
z Disease control efforts substitute for those of other producers
in the region
z Difficulty of monitoring and enforcement
Conclusions (2)
37
„
Public policy design is very important for providing socially optimal
incentives for infectious disease control
z Provision of information
z Compensation level for culled poultry
z Compulsory vaccination or biosecurity vs. market incentives
„
Comparisons between alternative control strategies need to reflect the
incentive structures under each strategy
„
Appropriately designed policies that account for producer response can
help overcome the coordination failure that otherwise arises under
market equilibrium conditions and improve household welfare
z Government resource limitations
z Difficulty in monitoring and enforcement
z Implications for poultry production systems
Future Directions
38
„
Empirical research to quantify implications of farm behavior for
the spread of avian influenza, the distribution of impacts, the
extent and cost of private disease prevention behavior, and the
effectiveness of public disease control programs
z Requires detailed farm household-level data from before and
after the recent H5N1 outbreaks as well as information on
outbreaks and local ecological and market conditions
z Examination of producer responsiveness to incentives in
reporting disease and cooperation with depopulation
„
Incorporation of potential human health effects
„
Integration with economy-wide modeling of impacts using CGE
model