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Cost sharing challenge

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A MOVE towards new ‘cost sharing’ arrangements for animal disease control — with producers having more say in how animal disease outbreaks are dealt with while taking on more responsibility in this area and bearing more of the costs — seems increasingly inevitable. In the uk, the period allowed by the Government for comments on a report from a joint industry/government working group on the issue has just ended, and the bva will be one among many organisations to have submitted a response. The Government plans to publish a further consultation document by the end of this year. This will set out its proposals on cost sharing and, if all goes to plan, it intends to introduce a Bill into Parliament in 2007/08 (see VR, July 22, 2006, vol 159, p 93).

In Brussels, meanwhile, the European Commission is in the throes of developing a new Community Animal Health Policy (cahp). A recent evaluation report on the existing cahp, which is being used to underpin discussions that will determine the European Union's (eu's) animal health strategy for 2007 to 2013, also sees cost sharing as the way forward. It calls for a harmonised framework for cost and responsibility sharing across the eu, aimed at encouraging a culture of biosecurity (see VR, September 9, 2006, vol 159, p 329). Both the uk and the eu reports are as concerned with managing the economic risks of animal disease outbreaks as they are with the health risks, and the thinking behind them is similar. Essentially, the idea is that, if farmers have more control over their actions, and have to pay for the consequences, they will take more interest in biosecurity and act more responsibly.

The significance of these changes and the extent of the challenges they present should not be underestimated. The scale of the challenges at the European level are set out by Bernard Van Goethem, acting director of Directorate D (Animal Health and Welfare) at dg Sanco, in an interview in the latest issue of the fve (Federation of Veterinarians of Europe) newsletter. Commenting on the results of the European evaluation in the context of eu enlargement, he notes that it indicated that ‘a system of harmonised schemes sharing the responsibilities and costs of epidemic livestock diseases could help prevent major financial risks for member states' and Community budgets, enhancing the welfare of operators and providing incentives for disease prevention’. He adds, however, ‘Whether these benefits can be achieved in practice depends on the details of the operational principles that have to be defined at eu level, and on their implementation at member state level. It would be without doubt the greatest challenge of the future policy to put in place such a scheme in an enlarging eu. This is a complex issue that needs to be duly addressed at all levels political, economic and legal.’

An indication of the challenges at national level was provided in the report of the uk's joint industry/government working group, whose starting point was that ‘the overriding objective for sharing responsibilities between industry and government must be to achieve better management of animal disease risks so that overall risks and costs are reduced’. It concluded that a joint approach between government and industry was the right one but that this had to be based on a genuine partnership. To this end, it recommended that a new statutory body should be established, with both industry and government representation. The shared responsibility, it made clear, should extend to all aspects of the development and delivery of exotic animal disease control policies, including policies on how outbreaks are handled.

In advocating a partnership approach, the working group presumed that the primary responsibility for the health and welfare of animals lies individually and collectively with livestock farmers, who are better placed than others to deal with many of the risks of exotic disease spread at farm level. At the same time, it recognised that government has an important role to play in securing the country's borders against disease incursions, and bringing public resources to bear in eradicating animal disease where there is a real possibility of a serious impact on public health, the industry or the environment. The European evaluation report also notes the responsibility of governments for public prevention and control measures to manage the risks of publicly relevant diseases, but nevertheless emphasises the responsibilities of farmers and makes clear that they will be expected to contribute more to the costs of controlling disease outbreaks in future.

Determining the balance of responsibilities and putting a price on the ‘public interest’ in relation to different diseases presents significant challenges in itself, as, indeed, will developing appropriate funding mechanisms. Regarding funding, the uk working group argued that a compulsory levy on the industry was the way forward, but was less clear about whether this should be a prospective or retrospective levy, or possibly a combination of both. It also suggested that the industry contribution should be capped. The European document took what could be seen as a harder line on funding, and also suggested a role for insurance. Discussions will doubtless continue, but what is clear is that additional costs are unlikely to be welcomed by, and could potentially be counterproductive in, an industry that is already financially hard pressed. The frameworks being developed will only be acceptable if the objective of ‘better management of animal disease risks so that overall risks and costs are reduced’ is achieved.

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