Economic consequences of a scrapie outbreak in Australia

Overview
The ABARES report presents estimates of the economic impact of a hypothetical outbreak of scrapie in Australia's sheep and goat population under three disease spread scenarios: • eradicable epidemic - an outbreak occurs and is successfully eradicated • managed spread - eradication is unsuccessful and spread is slowed by control measures • uncontrolled spread - without control measures in place, the disease spreads uncontrolled.

ABARES also estimated the trade impacts that may result following an outbreak of scrapie. Due to uncertainty around the extent of export market disruptions, three export ban scenarios by China, Japan and the Republic of Korea were modelled - as these countries have been sensitive to outbreaks of notifiable livestock diseases in the past.

The ABARES report indicates that Australia benefits significantly from remaining free of scrapie, and that in the event of an outbreak, it would also likely benefit from measures to eradicate the disease or control its spread.

Key Issues Scrapie is a progressive neurodegenerative disease affecting sheep and goats. It belongs to the group of livestock diseases which includes mad cow disease (bovine spongiform encephalopathy or BSE) in cattle. Scrapie (unlike BSE) is not associated with any known human health risks. Australia is one of the few major sheep producing countries that is free of scrapie and only allows imports of live sheep or genetic material under strict conditions from selected countries.

Australia would benefit significantly from preventing the entry of scrapie, and from detecting it relatively early if it enters. If detected within 10 years of entry, efforts to eradicate the disease are likely to be both successful and cost effective. Eradication would likely be achieved an average of eight years after detection of the disease, but outbreaks could last up to 50 years.

If detected early enough to be eradicable, modelled costs of controlling and eradicating scrapie-ncluding income losses from movement restrictions, were modest-estimated at an average of $4.7 million (in 2016 dollars). Most of the economic impact from an eradicable outbreak came from trade losses. • For example, if the outbreak led to a three-month ban on sheep meat by China and Japan, and a three-month ban on beef by Korea, the estimated trade losses would be $70 million over 10 years, of which $36 million would be lost by the beef industry. • A three-month ban on beef to Korea is based on existing agreed certification with Korea requiring Australian exporters to include an attestation that Australia is free of scrapie on export certificates for a range of beef and sheep meat products..

An eradication campaign is estimated to yield a benefit-cost ratio between 5:1 and 10:1, based on an assumed cost of $3 million to run epidemic control centres.

If the disease was not detected in time to be eradicable, it would still be cost-effective for Australia to implement measures to slow the spread. ABARES estimated the cost of uncontrolled spread to be in excess of $406 million (in 2016 dollars), compared to the estimated $119 million to $150 million cost of slowing the spread.