The Economics of Animal Disease

How livestock diseases cause losses for farmers and the economy, why vaccination campaigns are public goods, and lessons from lumpy skin disease and bird flu.

Animal diseases cause huge economic losses: dead animals, lower milk yields, lost trade and costs of control. Preventing them is one of the most valuable investments in rural economies.

Major diseases

Foot and mouth disease (FMD): reduces milk yields and working capacity of cattle and buffaloes, and blocks exports of animal products.
Brucellosis: causes abortions and infertility in cattle and can infect humans.
Lumpy skin disease: spread across India in 2022, killing large numbers of cattle and reducing milk production in states such as Rajasthan, Gujarat and Punjab.
Bird flu (avian influenza): leads to mass culling of poultry.
PPR in goats and sheep.

Why vaccination is a public good

When one farmer vaccinates, neighbouring animals are also protected because disease spreads less. This positive externality means individual farmers may under-invest in vaccines. Governments therefore fund mass vaccination.

India’s National Animal Disease Control Programme, launched in 2019, aims to control FMD and brucellosis through free vaccination of cattle, buffaloes and other animals.

Lumpy skin disease lessons

Rapid spread overwhelmed veterinary services.
An Indian-developed vaccine was introduced.
Farmers faced heavy losses, and some states compensated owners.
Milk supply dipped, contributing to higher milk prices.

Culling and compensation

For bird flu, authorities cull birds within a zone around outbreaks to stop spread. Compensation for farmers is important: without it, farmers may hide outbreaks, allowing disease to spread further.

One Health

Many animal diseases can spread to humans. The One Health approach links human, animal and environmental health, a lesson reinforced by COVID-19.

Investing in vets

India has relatively few veterinarians compared with its huge animal population. Mobile veterinary units and trained village animal health workers help fill gaps.

The vaccinated village

In one village, all cattle are vaccinated against FMD in a government campaign. When an outbreak hits a nearby area, the village's milk production is unaffected, while unvaccinated herds elsewhere suffer losses for months.

Thinking animal disease only affects individual farmers

Diseases spread across farms, raise food prices and can block exports, affecting the whole economy.

Key takeaways

Animal diseases cause deaths, lower yields and lost trade.
Vaccination is a public good because it protects neighbouring animals.
India's NADCP (2019) targets FMD and brucellosis.
Fair compensation encourages farmers to report outbreaks.