Economic costs of the foot and mouth disease outbreak in the United Kingdom in 2001

Abstract

The authors present estimates of the economic costs to agriculture and industries affected by tourism of the outbreak of foot and mouth disease (FMD) in the United Kingdom (UK) in 2001. The losses to agriculture and the food chain amount to about Pound Sterling3.1 billion. The majority of the costs to agriculture have been met by the Government through compensation for slaughter and disposal as well as clean-up costs. Nonetheless, agricultural producers will have suffered losses, estimated at Pound Sterling355 million, which represents about 20% of the estimated total income from farming in 2001. Based on data from surveys of tourism, businesses directly affected by tourist expenditure are estimated to have lost a similar total amount (between Pound Sterling2.7 and Pound Sterling3.2 billion) as a result of reduced numbers of people visiting the countryside. The industries which supply agriculture, the food industries and tourist-related businesses will also have suffered losses. However, the overall costs to the UK economy are substantially less than the sum of these components, as much of the expenditure by tourists was not lost, but merely displaced to other sectors of the economy. Overall, the net effect of FMD is estimated to have reduced the gross domestic product in the UK by less than 0.2% in 2001.