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Mycotoxins are an underestimated threat in our food and feed production. Little data is available on their economic impact, but what data are known illustrate a huge economic impact.
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Economic
Impact of
Mycotoxins
by Alois Fellinger
Mykotoxin Seminarium
10 juni 2014, Göteborg
How to calculate
Economic Impact?
John M. Mantle: Benefits and costs of food safety regulation. Food Policy, 24, 605-623, 1999
Calculation Example
B = e · p · n(c · s · fs + v · d · fd)
B Benefit (measured in US$)
e effectivness of regulations for preventing incidents
p percentage of food-borne illness associated with food
n size of the population
c cost of illness (in US$)
v value of a statistical life
s, d observed frequencies of illness and death in population
fs, f
dexpansion factors for illness and death translating observed
data into estimated rates for the population
c(y,q,w,k,a,b,g) = vc(y,q,w,k,a) + qc(q,w,k,b) + fc(k, g)
c total costs
vc variable costs, joint in conventional production inputs and
some quality control inputs)
qc variable costs, non-joint in conventional inputs and certain
quality control inputs,
fc conventional fixed cost component independent of both
output and quality.
a,b,g parameters of the respective components of the cost
function
• handling, preparation, and storage
• loss of human and animal life
• health care and veterinary care costs
• loss of livestock production
• loss of forage crops and feeds
• regulatory costs
• research cost
• trade impact
• …
What to consider?
In short, it‘s about …
Flashlights
1-5Mio EURO
Loss of revenue in Turkey “X”
incident (UK, 1960s)
Mio EUROEstimated direct and indirect
losses 1998 in a wheat epidemic
in Hungary
Billion $Annual cost of mycotoxins in
Canada and United States
Mio EUROWorldwide impact on rejections to
“ready-to-eat” almonds, hazelnuts
and pistachios applying the EU limits
for aflatoxins (4 ppb) as calculated
2007 in a JECFA/WHO study
0,5 - 1,5Billion $
Estimated annual lost crop revenues and cost of research and
monitoring activities, in the United States to manage mycotoxic
fungi and the toxins they produce (not including secondary
industry and international trade losses
Data on the economic impact of
ochratoxin A in grapes and wine are
not available or are not in the public
domain because their release could
cause a collapse in the wine market,
which is a high value product but not
considered as essential
30-50Mio $
Annual cost for aflatoxin testing alone in the United States
17,7Mio $
USDA's Agricultural Research Service
(ARS) mycotoxin research program
(approx. 60 scientists) for year 2000
11,9Mio $
• $4.7 million for mycotoxin research by USDA's
Cooperative State Research Education and Extension
Service (CSREES),
• $5.1 million from US states at their land grant institutions,
and an additional,
• $2.1 million from other Federal agencies at these
institutions in year 2000
Economic Impact
per US-Citizen
Annual cost of mycotoxins
16,00 $
Reports of direct crop revenue losses due to mycotoxins.
Robens J. and Cardwell K.
“The Costs of Mycotoxin Management to the USA: Management of Aflatoxins in the United States”
Journal of Toxicology - TOXIN REVIEWS, 22, 2 & 3, 139–152, 2003
Crop Location/Year
avg. annual
production
(tons x 1000)
Toxinavg.
Contamination (%)
est. annual revenue
loss (US$ x 1000)
Cotton AZ, 1977-1999 397 Aflatoxin 55 4.367
(at $20/ton)
Cotton TX, 1999 502 Aflatoxin 70 7.000
(at $20/ton)
Peanut GA 25.000
Corn TX, 1999 (4 districts) 2.100 tons
(375 Bu)
Aflatoxin 50 15.000
(at $0,40/Bu)
Corn MS, 1998 1.400 tons
(50 Bu)
Aflatoxin 20 discounted,
4 abandoned
2.000
Walnuts CA, 2000-2001 236 Aflatoxin 4 38.700
Almonds CA, 1995-2001 366-830 Aflatoxin 3 23.000-47.000
Barley ND, SD, MN, 1993-1998 DON 406.000a
(5 years)
Wheat ND, SD, MN, 1993-1998 DON 1.000.000b
aDoes not include abandoned acreage.
bIncludes actual production losses.
„Let me give one example: the European regulation
on aflatoxins. A World Bank study has calculated that
this regulation costs Africa 670 million dollars each
year in exports of cereals, dried fruit and nuts. And
what does it achieve? It may possibly save the life of
one citizen of the European Union every two years.“
Kofi Annan - Statement on the Challenge of Eradicating Poverty
for Sustainable Development; Third United Nations Conference
on the Least Developed Countries, May 14, 2001
Relative to Codex*
Relative to the
pre-EU harmonization
(1998 trade)**
Loss in the value of
African Food exportsUS$ 670 000 000 US$ 340 000 000
Number of cancer
death saved2.3 persons 0.9 persons
The value of African food exports and human health
risk under the new EU harmonized standard relative to
those under the alternative regulatory scenarios
* 9ppb aflatoxin B1, calculated from Codex 15ppb aflatoxin total standard
** 4.8ppb aflatoxin B1
(average of 1998 individual EU countries aflatoxin regulations)
Otsuki T., Wilson J.S. and Sewadeh M.
“Saving two in a billion: quantifying the trade effect of European food safety standards on African exports”
Food Policy 26, 495-514, 2001
Otsuki T., Wilson J.S. and Sewadeh M.
“Saving two in a billion: quantifying the trade effect of European food safety standards on African exports”
Food Policy 26, 495-514, 2001
Trade flow of cereals and nuts
2 groups of countries
15 importing countries
Australia, Austria, Brazil, Canada, France, Germany, India, Israel, Italy, Japan, Malaysia, Nigeria, Spain, UK, USA
31 exporting countries
Argentina, Australia, Austria, Brazil, Canada, Denmark, Egypt, France, Germany, Hungary, India, Israel, Italy,
Kazakhstan, Mexico, Netherlands, Nigeria, Pakistan, Paraguay, Romania, Russia, Senegal, South Africa, Spain, Sri
Lanka, Tanzania, Thailand, Uruguay, USA, Vietnam, Zimbabwe
One possible Scenario
All importers follow a 2ppb afaltoxin limit vs. only EU at 2ppb, other importers at status-quo
Loss of 46,1% in trade (US$ 10,9 billion)
biggest loss: Argentina (US$ 2,6 billion, -67,4%), no country gains
Sector Impact of aflatoxin considered Parameter used in social cost estimation Maize
only
Grain sector Product spoilage effects Change in wastage rates and postharvest costs 70.9
Households Human health effects The cost of premature death due to aflatoxin-related primary
liver cancer
112.7
The cost of disability due to aflatoxin-related primary liver
cancer
63.8
Poultry Increased mortality rates and
reduced feed to weight
conversion
Reduction in the unit cost of production when the aflatoxin
content of feed is reduced
28.9
Hen eggs Increased mortality rates and
reduced feed to weight
conversion
Reduction in the unit cost of production when the aflatoxin
content of feed is reduced
6.6
Pig meat Increased mortality rates and
reduced feed to weight
conversion
Reduction in the unit cost of production when the aflatoxin
content of feed is reduced
36.2
Total 319.1
Estimate of the 1991 Annual Social Costs of Aflatoxins
in Indonesia, Philippines and Thailand (million $A; 1$A @ 1.5 EUR)
)
For peanuts the costs were a total of 158 million $A. The estimate does not include the costs from loss of foreign markets
Godfrey Lubulwa and Jeff Davis;
Inclusion of environmental and human health impacts in agricultural research evaluations:
Review and recent evaluations.
In: ICRISAT Workshop, Hyderabad, India, 1994
1 average herd size in Sweden: 300
2 1% change in mortality is worth 1.49 € a pig (not including labor or medication costs)
3 50g/day change in growth rate is worth 1,57 € per pig if pigs are sold at the same weight
4 0,1 change in FCR represents 2.09 € per pig (when average feed cost is 223.62 €/ton)
Mycotoxin [ppb] Impact [€/pig] [€/herd]1
DON 715 7.7 % Increased mortality 5,74 1.722 2
OTA & ZON 500 (OTA)
250 (ZON)
54 g decreased Daily Weight Gain 1,70 5103
ZON & DON 250 (ZON)
1000 (DON)
decrease 0,09 FCR 1,88 5644
Mycotoxins’ impact on swine performance
Mycotoxins represent an unavoidable risk
•
As they can not be avoided, they need to be managed
•
Mycotoxin management has a huge economic impact
•
Mycotoxins can cause enormous costs
•
The economic impact goes far beyond the commodities