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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
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INTRODUCTION • Wellbeing of people depends on efficient production of animal as
an important source of food.
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• ‘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.
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• 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.
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• 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
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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
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• 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’.
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• 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.
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• 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.
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• In summary, diseases increase expenditure (production costs) and
decrease output (consumer benefits).
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DISEASE - AN ECONOMIC PROCESS
• Livestock production gaining output undergoes a series of
transformational processes.
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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.)
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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.
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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.
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• 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.
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• 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.
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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.
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• 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:
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(ii) Losses due to reduction in milk production:
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(iii) Losses due to mortalities:
(iv) Losses due to condemnation of organ/meat:
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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.
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• 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.
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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.
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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