'Technoeconomics Aspect' of Animal Diseases

7/28/2019 'Technoeconomics Aspect' of Animal Diseases

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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 developedto 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.



• Factors which have increased veterinarian’s 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 inwestern countries, the economic justification for animal

disease control is questioned more closely, and

(iii) Rising incomes and changing social values focus attention onqualitative 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, astudy generally undertaken with the aim of improving in some waythe 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 economist’s 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, andmanagerial efforts (control expenditures) in an attempt to save the

cow.

• In addition, farmer’s own losses will be termed as ‘ private cost’ and

loss affecting whole society will be termed as ‘social cost’.



• 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 lessthan 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 cowonly when the cow’s 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 asmaller (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 thedifference 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 withlow 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 isdaily weight gain.

• Inputs when taken as non-

veterinary 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 additionalcurve/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 veterinaryexpenditures, while the remainder (claiming from S to T) is

achieved by increasing non-veterinary inputs from X1 to X2.

• The main goal of economicevaluation is to identify the pathcorresponding to RST, which

enables G1, rather than G2, to beobtained most cheaply; that is,identify the combination of veterinary and other inputs thatwill 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 Treatment cost 15,320.00

2 Losses in milk production 2,733.00

3 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 =

9000.00

26000.00

9000.00

750.00

250.00

4 Grand Loss 63,053.00

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.



• 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/-)

Economic Analysis of Periparturient Diseases in Buffaloes (1999):

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



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. Colic 24 550 1.5 19,800.00

2. Trypanosomosis 11 575 3.3 20,872.50

3. Babesiosis 04 556 2.8 6,227.20

4. Mange mite

infection

12 447 5.4 28,965.60

Total 76,865.30

Treatment cost for major disease conditions in horse Economic losses due to major disease conditions in horses (2009):

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

Sr. No. Name of disease Group

No. of

animal

died

Total losses due

to mortality

1 Equine influenza Adult female 1 50,000

Adult stallion 1 40,000

Aged stallion 1 15000

Gelding 2 40000

2 Colic Adult Stallion 1 40000

Total 06 1,55,000

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

'Technoeconomics Aspect' of Animal Diseases

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