Geoscience Reference
In-Depth Information
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Fourth, the government could bear significant costs, including eradication
and containment costs, and compensation to producers for destroyed animals.
Depending on the erosion of consumer confidence and export sales, market
prices of the affected commodities may drop. This would affect producers whose
herds or crops were not directly infected, making the event national in scale even if
the disease itself were contained to a small region.
For food types or product lines that are not contaminated, however, demand
may become stronger, and market prices could rise for those products. Such goods
may include substitutes for the food that was the target of the attack (e.g., chicken
instead of beef ), or product that can be certified not to come from regions affected
by the attack (e.g., beef from another region of the country or imported beef ).
When Canada announced the discovery of mad cow disease [or bovine spongiform
encephalopathy (BSE)] in May 2003, farm-level prices of beef in Canada dropped
by nearly half, whereas beef prices in the United States remained very strong at
record or near record levels.
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Consumer confidence in government may also be tested depending on the scale
of the eradication effort and means of destroying animals or crops. The need to
slaughter perhaps hundreds of thousands of cattle (or tens of millions of poultry)
could generate public criticism if depopulation methods are considered inhumane
or the destruction of carcasses is questioned environmentally. Dealing with these
concerns can add to the cost for both government and industry.
Depending on the disease and means of transmission, the potential for eco-
nomic damage depends on a number of factors, such as the disease agent, location
of the attack, rate of transmission, geographical dispersion, how long it remains
undetected, availability of countermeasures or quarantines, and incident response
plans. Potential costs are difficult to estimate and can vary widely based on com-
pounding assumptions.
The ability of farm commodity programs to compensate for losses due to agro-
terrorism is limited. Government income support programs subsidize about 25
agricultural commodities (such as corn, wheat, soybeans, rice, and cotton). These
supported commodities represent about one-third of gross farm sales. The list of
commodities that normally do not receive direct support includes meats, poultry,
fruits, vegetables, nuts, hay, and nursery products. These nonsupported commodi-
ties account for about two-thirds of gross farm sales.
The food products more vulnerable to attack (meats, fruits, and vegetables) do
not have existing federal farm income support programs, nor are there income
support programs beyond the farm gate for food processors or retailers. Thus, any
federal assistance to producers or processors stemming from an agroterrorist attack
would likely come in the form of
ad hoc
disaster assistance. Making disaster pay-
ments to producers who do not normally receive government payments is techni-
cally more difficult than supplementing regular program payments due to drought
or flood.
