economic & social impacts of avian influenza outbreak in...

Economic & Social Impacts of Avian Economic & Social Impacts of Avian Influenza Outbreak in Bali & Lombok Influenza Outbreak in Bali & Lombok

What Have We Learned?What Have We Learned?

Phil SimmonsPhil SimmonsUniversity of New England University of New England

§§ I would like to thank our partners in this study:I would like to thank our partners in this study:

–– Government of Indonesia Government of Indonesia §§ Disease Investigation Centre (VI Denpasar)Disease Investigation Centre (VI Denpasar)

–– Provincial GovernmentsProvincial Governments§§ Balai Pengkajian Teknologi Pertanian (Bali)Balai Pengkajian Teknologi Pertanian (Bali)§§ Balai Pengkajian Teknologi Pertanian (Bali)Balai Pengkajian Teknologi Pertanian (Bali)

–– Two Indonesian UniversitiesTwo Indonesian Universities§§ Institut Pertanian BogorInstitut Pertanian Bogor§§ Brawijaya University, MalangBrawijaya University, Malang

–– Two Australian UniversitiesTwo Australian Universities§§ University of New EnglandUniversity of New England§§ Australian National UniversityAustralian National University

–– I would also like to thank the Dinas, District Livestock Offices, for their I would also like to thank the Dinas, District Livestock Offices, for their supportsupport

§§ One of the main lessons from the project was how to improve our One of the main lessons from the project was how to improve our management of foreign funded livestock disease projectsmanagement of foreign funded livestock disease projects

§§ Government of Indonesia (GOI) needed in ALL parts of foreign funded Government of Indonesia (GOI) needed in ALL parts of foreign funded projectsprojects

§§ Avian Influenza is an important Indonesian problemAvian Influenza is an important Indonesian problem–– It is not an Australian problemIt is not an Australian problem–– It is not an international problemIt is not an international problem–– Large losses are in poor countries, not wealthy onesLarge losses are in poor countries, not wealthy ones

§§ Solutions to AI in Indonesia are uniquely Indonesian Solutions to AI in Indonesia are uniquely Indonesian –– Policies that work in other countries are unlikely to work in IndonesiaPolicies that work in other countries are unlikely to work in Indonesia–– Solutions need to take account of cultural, social & economic differencesSolutions need to take account of cultural, social & economic differences

§§ Foreign projects to help farmers fight AI need to be run by GOI agenciesForeign projects to help farmers fight AI need to be run by GOI agencies–– There are millions of farmers with poultry in Indonesia ~ only the GOI has the staff & There are millions of farmers with poultry in Indonesia ~ only the GOI has the staff &

resources to implement policies at population levelresources to implement policies at population level–– Foreign agencies need to support GOI programs to help farmers ~ not develop Foreign agencies need to support GOI programs to help farmers ~ not develop

independent programsindependent programs–– Two many foreign programs have not been properly integrated with GOI policiesTwo many foreign programs have not been properly integrated with GOI policies

Day-old chicks from East Java being inspected by a Quarantine Service official in Mataram

Six wheel poultry truck from Surabaya being sprayedby Quarantine Services official in Mataram

Colorful wall poster used by Balai Pengkajian Teknologi Pertanian (BPTP) extension officers in Lombok to teach

smallholders about AI symptoms

What else did we learn?What else did we learn?

We learned about factors influencing transmission of AIWe learned about factors influencing transmission of AI

1.1. Product typeProduct type§§ kampung chickens ~ foraging makes biosecurity difficultkampung chickens ~ foraging makes biosecurity difficult§§ broilers ~ 21 day cycle means cheap to euthanise birds, broilers ~ 21 day cycle means cheap to euthanise birds,

vaccination expensivevaccination expensive§§ layers ~ vaccination could be amortised over 21 months layers ~ vaccination could be amortised over 21 months

production cycle, euthanasia expensiveproduction cycle, euthanasia expensive

2.2. State of industry developmentState of industry development§§ household production ~ smallholders poorly informedhousehold production ~ smallholders poorly informed§§ medium sized commercial operations ~ low margins means medium sized commercial operations ~ low margins means

biosecurity too expensivebiosecurity too expensive§§ large sized commercial operations ~ economies to size and large sized commercial operations ~ economies to size and

higher margins means more optionshigher margins means more options

3.3. Industry structureIndustry structure§§ contracted producers ~ agribusiness firms forced contractors contracted producers ~ agribusiness firms forced contractors

to reto re--stockstock§§ independent producers ~ did not restockindependent producers ~ did not restock

Mohamad Sayuti, a Lombok broiler producer under contractto Nusantara Unggasjaya Mataram, a Thai MNC, inspects

new birds following the firm’s re-stocking program

What Did We Learn About Sector 3 Farmers and AI?What Did We Learn About Sector 3 Farmers and AI?

–– Farmers had low awareness of Avian InfluenzaFarmers had low awareness of Avian Influenza§§ They thought Newcastle Disease, Snot, Infectious Bursal Disease and They thought Newcastle Disease, Snot, Infectious Bursal Disease and

respiratory disease were more importantrespiratory disease were more important§§ May be because it is a new disease ~ do sector 3 farmers see AI as a May be because it is a new disease ~ do sector 3 farmers see AI as a

temporary problem rather than an endemic disease?temporary problem rather than an endemic disease?

–– Small and middleSmall and middle--scale poultry farms were more likely to get AI due to their scale poultry farms were more likely to get AI due to their lower biolower bio--securitysecurity§§ Larger sector 3 farms were better informed about AI & spent more money on Larger sector 3 farms were better informed about AI & spent more money on

biobio--securitysecurity§§ Smaller sector 3 farms need extension & support to fight the diseaseSmaller sector 3 farms need extension & support to fight the disease

–– Farmers visited by extension services had same chance of being struck by Farmers visited by extension services had same chance of being struck by AI as farmers not visitedAI as farmers not visited§§ The services provided by government were not useful for preventing AI in the The services provided by government were not useful for preventing AI in the

current season. However such activities may well have benefits flowing to current season. However such activities may well have benefits flowing to future influenza seasons. future influenza seasons.


§§ Price effects outweighed production losses as a source of economic losses in Price effects outweighed production losses as a source of economic losses in early flu seasonsearly flu seasons

–– The major source of losses was reduced prices from safety conscious consumersThe major source of losses was reduced prices from safety conscious consumers–– This impact has diminished as consumers have learned to live with the disease.This impact has diminished as consumers have learned to live with the disease.–– In the 2007In the 2007--2008 flu season the price effects were almost zero for broilers and eggs2008 flu season the price effects were almost zero for broilers and eggs

§§ The effect of appropriate bioThe effect of appropriate bio--security on the likelihood of farms being struck security on the likelihood of farms being struck with AI ranged from 20 to 40 per centwith AI ranged from 20 to 40 per cent

–– Where bioWhere bio--security was undertaken by farmers it was effective as a preventative security was undertaken by farmers it was effective as a preventative measure. measure.

§§ The cost of bioThe cost of bio--security, including labour, was around 13 per cent of poultry security, including labour, was around 13 per cent of poultry revenues so the expected private benefits from undertaking biorevenues so the expected private benefits from undertaking bio--security were security were relatively lowrelatively low


§§ Policy Suggestions from the SurveyPolicy Suggestions from the Survey–– Government should ensure Day Old Chicks are healthyGovernment should ensure Day Old Chicks are healthy–– Restrict chicken movements Restrict chicken movements

§§ Into Bali & LombokInto Bali & Lombok§§ Within Bali & LombokWithin Bali & Lombok

–– Providing technical assistanceProviding technical assistance§§ ExtensionExtension§§ Monitoring servicesMonitoring services§§ VaccinationsVaccinations

–– If there is no compensation for production losses:If there is no compensation for production losses:§§ Farmers will not reveal losses Farmers will not reveal losses §§ Farmers will not coFarmers will not co--operate with ‘stamping out’ policy when it is neededoperate with ‘stamping out’ policy when it is needed§§ Farmers will attempt to sell diseased birdsFarmers will attempt to sell diseased birds

What We Learned about Smallholders and AI in BaliWhat We Learned about Smallholders and AI in Bali

§§ AI and PovertyAI and Poverty–– The survey indicated losses to Balinese smallholders from AI are relatively small The survey indicated losses to Balinese smallholders from AI are relatively small

compared to total incomes for these householdscompared to total incomes for these households

§§ This reflects the large proportion of household income derived from offThis reflects the large proportion of household income derived from off--farm and that poultry farm and that poultry is not a large part of the enterprise mixes of these households. is not a large part of the enterprise mixes of these households.

–– AI is not a major contributor to the broader problem of smallholder poverty on Bali AI is not a major contributor to the broader problem of smallholder poverty on Bali and should not be seen as such and should not be seen as such

–– Controlling Avian Influenza is not the major constraint on increasing smallholders Controlling Avian Influenza is not the major constraint on increasing smallholders consumption of animal proteinsconsumption of animal proteins

–– Smallholders really need Smallholders really need

§§ more intensive husbandry practices across a range of animal speciesmore intensive husbandry practices across a range of animal species§§ better genetics & breedingbetter genetics & breeding§§ programs to deal with a range of animal diseases, not just AIprograms to deal with a range of animal diseases, not just AI

§§ Targeting of AI PolicyTargeting of AI Policy

–– Respondents in the sample were homogeneous with remarkably similar social characteristicsRespondents in the sample were homogeneous with remarkably similar social characteristics

§§ They had a surprisingly even income distribution and responses to AI were very similar They had a surprisingly even income distribution and responses to AI were very similar across the sample. across the sample.

§§ No small, vulnerable groups where tightly targeted policy could achieve very high benefitNo small, vulnerable groups where tightly targeted policy could achieve very high benefit--cost ratios were identifiedcost ratios were identified

–– This suggests policies should be This suggests policies should be broadly targetedbroadly targeted

§§ Favors use of broad based extension techniques such as television campaigns covering Favors use of broad based extension techniques such as television campaigns covering human deaths as well as farm losseshuman deaths as well as farm losses

§§ Also favors using existing market: subsidising, or make free, vaccines or other investments Also favors using existing market: subsidising, or make free, vaccines or other investments in biosecurityin biosecurity

–– Broad based approaches likely to be more effective than expensive household visits by Broad based approaches likely to be more effective than expensive household visits by government officialsgovernment officials

§§ Dinas cannot cover all households because of budget constraintsDinas cannot cover all households because of budget constraints


§§ More Biosecurity & Extension is NeededMore Biosecurity & Extension is Needed

–– Smallholders spent relatively little on vaccines or other biosecuritySmallholders spent relatively little on vaccines or other biosecurity

–– Purchasing more vaccines is likely to be an effective & profitable strategy for Purchasing more vaccines is likely to be an effective & profitable strategy for smallholders to reduce AI lossessmallholders to reduce AI losses

–– Public benefits accrue from greater use of vaccines and other biosecurityPublic benefits accrue from greater use of vaccines and other biosecurity

§§ Each infected farm is likely to be a source of infection for other farmsEach infected farm is likely to be a source of infection for other farms§§ There are public health issues ~ this is a zoonotic diseaseThere are public health issues ~ this is a zoonotic disease

–– Increased extension of information to smallholders about vaccines and other Increased extension of information to smallholders about vaccines and other biosecurity measures would be effective biosecurity measures would be effective

–– Incentives are needed to reduce costs of biosecurity: possibly subsidies for vaccines Incentives are needed to reduce costs of biosecurity: possibly subsidies for vaccines and other relevant chemicalsand other relevant chemicals


§§ More Research is Needed ~ What are the transmission mechanisms at farm level?More Research is Needed ~ What are the transmission mechanisms at farm level?

–– Higher income groups have larger flock losses from AI in absolute and proportional Higher income groups have larger flock losses from AI in absolute and proportional termsterms

§§ Is this a a biosecurity issue?Is this a a biosecurity issue?

–– Lifestyle differences between wealthier and poorer households?Lifestyle differences between wealthier and poorer households?–– Differences in husbandry: size of flocks held by these high income households and Differences in husbandry: size of flocks held by these high income households and

differences in production intensity?differences in production intensity?

§§ Scientific research is needed on how AI is transmitted between households. Need to Scientific research is needed on how AI is transmitted between households. Need to consider:consider:

–– differences in transmission across all income groupsdifferences in transmission across all income groups–– ‘overflows’ from AI infected smallholders to more vulnerable Sector 3 farms ‘overflows’ from AI infected smallholders to more vulnerable Sector 3 farms –– If smallholder poultry production is causing AI on Sector 3 farms, greater investment If smallholder poultry production is causing AI on Sector 3 farms, greater investment

in Sector 4 biosecurity is needed to protect Sector 3in Sector 4 biosecurity is needed to protect Sector 3


Some ConclusionsSome Conclusions

§§ Need to increase resourcing for existing Need to increase resourcing for existing biosecurity programsbiosecurity programs§§ Need more extension to smallholders to Need more extension to smallholders to

increase awareness of the AIincrease awareness of the AI§§ Need better research on how the disease is Need better research on how the disease is

transmitted between farmstransmitted between farms

economic & social impacts of avian influenza outbreak in...

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