The Techno-economics aspect of Animal Diseases

Bhadesiya C. M.; Raval S. K.; Patel P. R.; and Varia T. N. Department of Veterinary Medicine College of Veterinary Science & Animal Husbandry A.A.U., Anand-388001

INTRODUCTION
Wellbeing of people depends on efficient production of animal as an important source of food.

 Animal health economics, a relatively new subject developed to provide quantitative insights into the economic impact of disease and disease control in livestock. A discipline which is progressively creating a framework of concepts, procedures and important data to support the decision-making process in optimizing animal health management. Information pertinent to economics of disease in rural cattle is practically less available in India.

 Principles of economics for livestock population were first broadly outlined in the late 1960s and at the same time, veterinary economics or animal health economics emerged as a specific area of interest in veterinary medicine, especially epidemiology. At farm, national or even international level, the application of economic techniques to animal disease control strategies was increased due to the importance of financial evaluation in intensive livestock enterprises. There is a tendency to consider economic evaluations as separate optional exercises, distinct from epidemiological investigations.

 Economic assessments are integral parts of many epidemiological investigations providing a complementary perspective to that of biological (i.e., technical) studies with which the veterinarian is more familiar because of its professional training.

 Factors which have increased veterinarians interest in economics include, (i) Government veterinary services are increasingly required to justify budget, as the role of the public sector diminishes; (ii) As the relative importance of agricultural output declines in western countries, the economic justification for animal disease control is questioned more closely, and (iii) Rising incomes and changing social values focus attention on qualitative aspect of food production, the welfare of animals, and diseases of companion animals. This necessitates, a widening of economic perspectives from the initial, relatively narrow, evaluation of disease in farm livestock

ECONOMIC CONCEPTS & PRINCIPLES

Economic is concerned with choice at all levels of society, choice by individuals, by firms, and by local and central governments.

The study of why choices are necessary and how they are made, a study generally undertaken with the aim of improving in some way the outcome of choice.

The basic economic model

 Economics illuminates how people exercise choice (i) In the allocation of scarce resource for production; (ii) In the distribution and consumption of products, and (iii) In the consequences of those decisions for individual and social benefits As economists view of the world is based on a set of concepts and generalized abstraction about the nature of their interrelationship (i.e., theory) and this theory is applicable to animal diseases. In economic terms, death actually represents the value of lost output (output foregone) which is different from additional expenditures made on veterinary services, medicines, and managerial efforts (control expenditures) in an attempt to save the cow. In addition, farmers own losses will be termed as private cost and loss affecting whole society will be termed as social cost.

THE PRODUCTION FUNCTION

Production function: Relationship between resources providing inputs to products and the goods and services comprising the output. Input resources can be natural (e.g. land, feed and mineral deposits used to feed animals) or man-made (e.g. building and machinery used for livestock production). Such resources undergo frequent transformations (e.g. iron into steel, feed into body protein) or else facilitate a physical transformation process (e.g. manpower and managerial exercise).

 An empirical evidence shows that the production function is typical non-linear because certain inputs are typically fixed and so beyond a certain point an increase in variable input (i.e., an input whose use varies with the planned level of production) is associated with a less than proportionate increase in output. Normally, diminishing physical returns are the same only if inputs are freed e.g., a farmer can aim for maximum milk yield per cow only when the cows feed is free. If the farmer has to pay for the feed, the optimum economic efficiency (production) is obtained when the yield per cow is less than the maximum technical potential.

In addition, the overall profits will change with variations in relative prices of inputs & outputs and with methods of production. In a similar fashion, animal disease can be changed with relative prices and techniques of production.

 Disease in domesticated and sometimes non-domesticated livestock population reduces the quantity and/or quality of livestock products available for human consumption (i.e., benefit). Diseases cause production from a given quantity of resources to be of a lower quantity and/or quality than could be obtained in its absence. Diseases increase costs in two ways (i) Because resources are being used inefficiently, the product actually obtained are for an unnecessary high resource cost: in the absence of disease, the same (or more) output could be obtained from a smaller (or the same) expenditure of resources; and (ii) There is a cost to people, who are deprived because they have fewer, or lower quality products to consume; that is, they obtain lower benefits.

 In summary, diseases increase expenditure (production costs) and decrease output (consumer benefits).

DISEASE - AN ECONOMIC PROCESS

Livestock production gaining output undergoes a series of transformational processes.

How disease impairs the transformation process? Basic resources for production are destroyed (e.g., death of breeding and producing animal), Decreased profitable output or its unit value (e.g., low milk yield from a diseased cow or poor quality of milk obtained from a cow with mastitis), Decreased efficiency of production process and the productivity of resources used (e.g., lowered feed conversion efficiency or reduced growth rate), Making livestock products unsuitable for processing, or generating additional costs in the distribution chain (e.g., drug residues in milk), Direct effects on human health (e.g., zoonotic infections such as brucellosis), More diffuse economic effects to reduce the value of livestock to society (e.g., animal welfare and concern for poor food quality; constraints on trade and tourism etc.)

PRODUCTION FUNCTION: HEALTHY & DISEASED A loss of efficiency, which poses both technical & economic problems. Figure depicts the technical efficiency loss as the difference between the production functions of healthy and diseased animals.

The disease acts as negative input and hence, it lowers the output and curve is shifted downwards. The efficiency loss is smaller with low input and low-output production. The potential economic importance of disease varies between farms, regions and countries.

PRINCIPLE TO RECOVER PLANNED OUTPUT

The Goal: To restore technical efficiency and the economic objective is to find the least cost method to restore health status and productivity.

As shown in figure, one output is daily weight gain. Inputs when taken as nonveterinary variable inputs, 1 will be the curve for the healthy animal (as production function) and 2 will be the curve for diseased animals.

 G1 and G2 is the loss in technical efficiency as far as daily weight gain is reduced. With veterinary intervention, one step which can be adopted is reducing G2 to G1. Reduction of disease commonly does not depend exclusively on veterinary services and medicines. Reducing X2-X1 by non-veterinary inputs also reduces G2 and G1.

While practicing, these may remain as an additional curve/intermediate curve which is 3.

 Production is then lifted from G2 to G1 in two parts.

The proportion of G1-G2 given by RS is achieved by veterinary expenditures, while the remainder (claiming from S to T) is achieved by increasing non-veterinary inputs from X1 to X2.

The main goal of economic evaluation is to identify the path corresponding to RST, which enables G1, rather than G2, to be obtained most cheaply; that is, identify the combination of veterinary and other inputs that will minimize the costs of recovery.

ASSESSING THE ECONOMIC COSTS OF DISEASE

The total economic cost of disease can be measured as the sum of output losses and control expenditures. A reduction in output is a loss because it is a benefit that is either taken away (e.g., when milk containing antibiotic residues is compulsorily discarded) or unrealized (e.g., decreased milk yield). Expenditures, in contrast are increase in input, and are usually associated with disease control. Examples of control expenditures are veterinary intervention and increased use of agricultural labor, both of which may be used either therapeutically or prophylactically.

 Economic parameters for quantification of monetary loss are (i) Treatment cost, (ii) Losses due to reduction in milk production, (iii) Losses due to mortalities, and (iv) Losses due to condemnation of organ/meat.

(i) Treatment cost:

(ii) Losses due to reduction in milk production:

(iii) Losses due to mortalities:

(iv) Losses due to condemnation of organ/meat:

 Economic losses due to Fasciolasis in Slaughter Buffalo (1997):

Projected Economic losses for the buffalo population of survey group 1 2 Treatment cost Losses in milk production 15,320.00 2,733.00 9000.00 26000.00 9000.00 750.00 250.00 63,053.00

Losses due to mortality In milk 1 X 9000 = Dry 4 X 6500 = Heifers 2 X 4500 = Female calves 1 X 750 = Male calves 1 X 250 =
Grand Loss

Average loss per animal per year was 318.44 ,i.e., Rs. 318/Total 33.3 kg liver was condemned, Average price of liver Rs. 40 per kg, Total monetary loss was Rs. 1332/-, Economic loss was Rs. 11.68 ,i.e., RS. 12 per animal slaughter. Dr.S.K.Raval & Dr.P.R.Patel, Department of Vet. Medicine, Veterinary College, Anand.

 Economic Analysis of Periparturient Diseases in Buffaloes (1999):

The per day treatment cost for periparturient disorders was 1. Postpartum prolapse of genitalia (Rs.317/-) 2. Dystocia (Rs.271/-) 3. Clinical ketosis (Rs.185/-) 4. Milk fever (Rs.140/-) 5. Retention of fetal membranes (Rs.215/-) 6. Prepartum prolapse of genitalia (Rs.99/-) 7. Clinical and subclinical mastitis of single quarter (Rs.97/each) 8. Postpartum metritis (Rs.96/-)

Dr.G.C.Mandali & Dr.P.R.Patel, Department of Vet. Medicine, Veterinary College, Anand.

 Economic losses due to major disease conditions in horses (2009):

Treatment cost for major disease conditions in horse

Sr. No.

Name of disease

No. of animal affected

Average treatment cost/ case/day(Rs.)

Average days of treatment

Total cost of treatment (Rs.)

1. 2. 3. 4.

Colic Trypanosomosis Babesiosis Mange mite infection Total

24 11 04 12

550 575 556 447

1.5 3.3 2.8 5.4

19,800.00 20,872.50 6,227.20 28,965.60

76,865.30

Dr.S.V.Mavadiya, Dr.S.K.Raval & Dr.P.R.Patel, Department of Vet. Medicine, Veterinary College, Anand.

Quantification of economic losses due to mortality in horse

No. of Sr. No. Name of disease Group animal died 1 Equine influenza Adult female Adult stallion Aged stallion Gelding 1 1 1 2

Total losses due

to mortality
50,000 40,000 15000 40000

Colic
Total

Adult Stallion

1
06

40000
1,55,000

Dr.S.V.Mavadiya, Dr.S.K.Raval & Dr.P.R.Patel, Department of Vet. Medicine, Veterinary College, Anand.