Back to warmwell.com website


REGULATORY IMPACT ASSESSMENT

 

1.         Title of Proposal

 

1.1             Transposition of the EU Foot-and-Mouth Disease Directive 2003.

 

Note that due to legal technicalities around the need to use two separate sources of primary legislation to transpose this Directive, namely the Animal Health Act 1981 and the European Communities Act 1972, the transposition will be carried out by three separate statutory instruments (SIs):

 

  • The Foot-and-Mouth Disease (England) Order 2005
  • The Foot-and-Mouth Disease (Control of Vaccination) (England) Regulations 2005; and
  • The Animal Health Act (Amendment) Regulations 2005

 

2.         Purpose and intended effect of measure

 

(i)         The Objective

 

2.1       These statutory instruments implement Council Directive 2003/85/EC of 29 September 2003 on European Community measures for the control of Foot-and-Mouth Disease (FMD). The Directive sets out measures to be taken if the presence of FMD is suspected or confirmed within EU territory. It amends the current EU measures to control and eradicate FMD taking account of:

 

·        The most recent scientific developments in the field of disease control;

 

·        The experience gained in eradicating FMD during the 2001 outbreak; and

 

·        Technical developments in laboratory diagnosis of FMD and vaccines.

 

2.2       In particular, the EU Directive moves emergency vaccination to the forefront of FMD control strategies, alongside the basic policy of slaughter of susceptible animals on infected premises and those identified as dangerous contacts. Details of the SIs are set out in Annex 1.

 

2.3       The three options set out in this RIA do not involve any change in the Government’s policy on FMD control strategy, which was set out in its Response to the Reports of the FMD Inquiries in 2002. The policy on controlling FMD is that animals on infected premises and their dangerous contacts would be culled, although we will consider the role of emergency vaccination from the very start of an outbreak. The three options set out in this RIA are all based on this same disease control strategy and only concern the detailed legal base for that strategy.

 

(ii)        The background

 

2.4             Measures for the control of FMD are currently contained in the Foot-and-Mouth Disease Order 1983 (S.I. No 1950) and its fourteen subsequent amendments. In view of this, the current Order was, in any event, due for consolidation.

 

2.5             Previous Community measures for the control of FMD were laid down in Directive 85/511/EEC, as amended. In the light of the outbreaks of Classical Swine Fever during the past decade and the 2001 FMD epidemic, the measures provided for in Directive 85/511/EEC (and its amendments) were felt to be incomplete.

 

2.6       A minor change is needed to the Animal Health Act 1981 (as amended by the Animal Health Act 2002) in relation to slaughter because the Directive obliges Member States to ensure slaughter of all susceptible animals on premises where FMD is confirmed (“infected premises”). The 1981 Act currently gives the Secretary of State a discretion to slaughter in certain situations (including on infected premises) but this is not sufficiently binding to fully implement the Directive.  Our policy is to fully implement the Directive and that requires a limited duty be placed on the Secretary of State to slaughter, but only where the Directive absolutely requires it. It is therefore also intended to amend the 1981 Act in respect of FMD to provide the necessary powers to implement the Directive.

 

2.7       Defra commissioned Risk Solutions to undertake a Cost Benefit Analysis (CBA) of FMD Controls[1]. The objective of the CBA is to provide epidemiological and economic information on the impact of a number of broad control strategies that could be adopted in the event of an FMD outbreak. This information will be used to inform decisions as to the most appropriate control strategy to regain “FMD-free status without (routine) vaccination” under a range of defined circumstances. It would appear from the CBA that a future FMD outbreak is unlikely to be on the same scale as the 2001 outbreak for a number of reasons, such as the 6-day movement standstill (introduced in August 2003) and an improved contingency plan. However, factors such as the nature of the particular strain of FMD, the route of its introduction into the country and the time taken to report it to Defra and confirm the presence of disease are all significant factors that would affect whether a future outbreak was widespread.

 

2.8       The Devolved Administrations in Northern Ireland, Wales and Scotland will be making parallel legislation.

 

(iii)       Risk Assessment

 

2.9       FMD is not considered a threat to human health. It is a disease which affects cloven-hoofed animals, including three of the most economically important species: cattle, sheep and pigs. The disease makes intensive livestock farming uneconomic as infected animals are characterised by long recovery periods with significantly reduced milk production and growth. FMD also has significant welfare implications for affected animals, as those infected may suffer acute stress and pain. As a result of its high economic impact, FMD is listed at the top of the International Organisation of Epizootics (OIE) List A diseases. An outbreak of FMD affects a country’s trading status for animals and animal products. The scale and the impact of the unprecedented FMD outbreak of 2001 made clear the potential costs of a large FMD outbreak.

 

2.10    The National Audit Office (NAO) in their 2002 study of the 2001 outbreak estimated the total cost to the Exchequer at £3.1 billion: £1.4 billion in compensation for culled animals and £1.7 billion on other disease control activities. The wider cost to the rural economy as a whole is estimated in the region of over £5 billion mainly due to the adverse effect of the outbreak on international and domestic tourism (between £2.7 and £3.2 billion in value added according to MAFF/DCMS estimates). This also includes some £355 million in uncompensated losses by agricultural producers, which represents about 20% of the estimated total income from farming in 2001. Overall, the outbreak is estimated to have reduced the UK gross domestic product by 0.2%. Note that the overall impact on the UK economy is modest because of consumers switching spending away from tourism to other goods and services.

 

2.11    As a result of globalisation, and in particular the growing world demand for meat and meat products, the increased cross-border movement of livestock and the growth in human travel, the risk of incursion by exotic diseases has increased. The Royal Society Report noted "... for some years trends were leading to a greater risk of importing exotic diseases." In addition, the Director General of the Food and Agriculture Organisation (FAO) noted at the International Conference on Prevention and Control of FMD in December 2001 that "the last ten years have witnessed dramatic FMD epidemics resulting from the introduction of the disease into formerly disease-free countries." Improved handling of disease outbreaks is therefore important in enabling the UK and the EU to retain the internationally recognised status of "disease-free without vaccination" which is of fundamental importance for international trade in animals and animal products. The SIs aim to allow the UK, and hence the EU, to maintain this status or, in the event of an outbreak, help regain it quickly.

 

           
3.             Sectors affected

 

3.1       In the event of an FMD outbreak, any or all of the livestock industry in England with susceptible animals could be affected. Statistical data from the "Agricultural and Horticultural Census for England" for June 2004 shows livestock numbers as:

 

·        5.7 million cattle

·        15.9 million sheep

·        4.2 million pigs

 

3.2             Agriculture (including livestock) employs less than 2% of the total UK workforce and accounts for less than 1% of GDP. As a guide to the numbers employed in the livestock sector, there were, in 2003, approximately 177,288 full and part-time principal farmers, partners and directors working on 109,959 holdings with livestock in England.

 

3.3       The impact of an FMD outbreak and resulting control measures would not be restricted to livestock producers: there would also be a serious impact on related industries such as the meat trade, including abattoirs and auction markets, as well as milk companies, food processors and specialist road hauliers as a result of restrictions imposed in an outbreak. An economic study, by Thompson et al[2], concluded that in the food chain sectors, downstream from the farm-gate, the cost to the industry in England of the 2001 outbreak was about £115 million. Moreover, the wider food industry could be affected due to the adverse reactions of some export markets to an FMD outbreak.

 

3.4       Many other rural sectors, particularly tourism, could be affected by a future outbreak. As a guide to the value of the English tourism industry, during 2002 UK residents spent almost £20 billion on visits and trips within England. In addition, during the same period, expenditure by overseas visitors on visits to England was over £10 billion, over half of which was spent outside London. Tourism is a key UK industry, with an annual turnover of £76 billion and over 7% (approximately 1 million) of the working population work in the sector. In 2001, the tourist sector, both rural and urban, was estimated to have lost between £2.7 and £3.2 billion in value added as a result of the outbreak. In England, 86% of tourism income is generated by domestic visitors and the vast majority of lost revenue, particularly in rural areas, related to reduced spending on domestic tourism.

 

4.             Options

 

4.1       This proposal is not primarily concerned with decisions about how to control a future FMD outbreak. In particular, the decision on whether and when to use vaccination as a control mechanism, in addition to slaughter and disposal, would be taken in a similar way under any of the options set out below. This decision would take account of lessons learned from the 2001 outbreak and would draw on the work carried out since then. Rather, this proposal is primarily about the detail of the powers which will be available to control a future outbreak using whatever control strategy is chosen.  The new options (2 and 3) under consideration offer slightly different enhancements to existing powers, all of which are intended to improve the effectiveness of disease control.

 

4.2             Option 1 - Do nothing; continue to rely on present controls in the FMD Order 1983 (as amended).

It should be noted that the Government's policy on a future outbreak (set out in the Government Response to the National Inquiries) would be different in some key respects compared to that in 2001, even under this pre-existing framework. However it is not feasible to continue with present powers unchanged because the 1983 Order does not fully implement the provisions of Council Directive 2003/85/EC. Under Article 226 of the Treaty of Rome, Member States are obliged to implement EU law; failure to do so may result in infraction proceedings and ultimately ECJ action. The "do nothing" option is used here as the baseline for the other two options.

 

4.3             Option 2 - Transpose the Directive exactly.

The provisions of the EU Directive are similar in many respects to those of the current 1983 Order (Option 1) but the important differences are the amount of detail provided for each control measure. The Directive also gives clearer emphasis on the use of emergency vaccination. Option 2 takes explicit account of the 2001 outbreak and the lessons learnt from it, both at a national and international level, and embodies those lessons within the regulatory framework. Whilst emergency vaccination was regarded under the previous EU directive (85/511) as a strategy of last resort, under the new Directive (and this option) emergency vaccination would be considered from day one of an outbreak. This option also takes account of the changes in the international guidelines for trade in animals and animal products which mean the "trade penalty" for using emergency vaccination is now reduced from that which applied during 2001. The OIE (international animal health standard setting body) sets down rules for recovery of FMD free status, including a reduction from 12 months to 6 months after the last case or the last vaccination (whichever is latest) where stamping out and “protective vaccination” to live is used, provided that serological surveillance demonstrates the absence of infection in the remaining vaccinated population.

 

4.4       The controls required in the protection and surveillance zones are specified in much more detail in this Directive than in its predecessor. This should aid the understanding of all stakeholders concerning what will be required in a future outbreak. As under Option 1, movements of animals in protection and surveillance zones would be prohibited other than under certain specific conditions. However, there are important additional requirements in the Directive. These are summarised in Table A below with further details set out in Annex 1.

 

Table A – New requirements in the 2003 Directive

 

The prohibition of placing on the market fresh meat and meat products from animals originating or produced in the zones unless they had undergone various specified treatments, including heat treatment.

Requirement for de-boning and maturation of meat from vaccinated animals until we have regained FMD-free status, which is in line with OIE rules.

Prohibitions on animal movements, except to slaughter, in certain zones.

 

A prohibition on testing of milk samples for milk hygiene purposes in laboratories not authorised to test for FMD virus.

 

4.5             Option 3 – As Option 2 but with some additional measures retained from the current 1983 Order.

The Directive sets down minimum measures but specifically allows, in Article 1, for Member States to take more stringent action. The draft SIs go further than the requirements of the Directive in a limited number of areas where veterinary advice is that retaining some current powers would be of benefit.  Although these powers are additional to those specified in the Directive, they are not new.  All these additional provisions are carried over from the 1983 FMD Order and were found to be of use in controlling the outbreak in 2001. These provisions are summarised in the Table B:

 

Table B – Existing Provisions of the 1983 Order to be carried forward

 

Requirements to control rats on premises where disease is suspected or on contact premises.

Requirements to control dogs and poultry in zones established around an infected premises.

Controls on shearing, dipping and scanning of sheep by mobile workers.

 

Provision to close land including footpaths (but only within an area of immediate risk around a minimum of 3km of an infected premises).

Powers to control shooting, stalking, drag hunting and other gatherings of people beyond the immediate infected area.

Powers to control animal gatherings (markets, fairs, etc) beyond the immediate infected area.

 

5.         Costs and benefits - general

 

5.1       A comprehensive cost benefit analysis of the 1967 outbreak concluded that the economic benefits of FMD control exceeded the costs of the disease becoming endemic. This conclusion remains true today.

 

5.2       The Lessons Learned Inquiry into the 2001 outbreak,[3] recommended that cost benefit analyses on FMD control strategies should be updated and maintained at both the UK and EU level.

 

5.3       The Government has commissioned a Cost Benefit Analysis of FMD Control strategies[4], the detail of which is set out above in paragraph 2.7, referred to here as the 2005 CBA.  The results provide information on the impact of various disease control options, in the event of a future outbreak of FMD. These results will help inform future decisions as to the most appropriate FMD control strategy under a number of defined circumstances. The 2005 CBA results are also to be used to assist in:

 

  • planning resources for an outbreak;
  • refining the Decision Tree (which outlines the measures that may be taken to slaughter or vaccinate animals in the event of an outbreak of FMD and sets out the factors the Government will take into account in deciding which strategy to adopt to control and eradicate the disease in the future);
  • building a consensus on the circumstances in which the use of emergency vaccination is the best FMD control option;
  • and more generally improving the evidence base for the cost of different disease control policies.

 

The results from this study could be applied to any of the three options, although only Options 2 and 3 cover in detail the requirements of emergency vaccination.

 

5.4       As the 2005 CBA makes clear, considerable changes have been made in the UK farming industry since the 2001 outbreak. Principally, there is now a 6-day movement restriction for cattle and sheep in England (as well as a retained 20-day standstill for pigs) which has significant implications for the likely size of any future outbreak. There are also likely to be further changes in the farming industry over the next few years as the impact of CAP reform begins to take effect. As subsidies are decoupled from production this may well result in a reduction in the intensity of livestock production.

 

5.5            However there is another important conclusion from the fact that the 2005 CBA predicts future outbreaks to be significantly smaller than in 2001. This is the suggestion that the speed and effectiveness of control measures make a major difference to the costs of an outbreak.  The 2005 CBA thus supports the broad approach of this proposal for a recommended option which will increase the effectiveness of control measures that the government has at its disposal in the event of an FMD outbreak. Increased FMD control will help minimise the costs of a future outbreak of FMD.

 

5.6       The cost of an FMD outbreak consists of:

 

  • Disease control costs (including labour and materials);
  • Compensation costs (including livestock culled);
  • Uncompensated industry costs (including loss of quality and export loss);
  • Loss of trade (due to movement restrictions);
  • Other consequences (including tourism, loss of amenities and environmental impact).

 

More effective controls will reduce the duration of an outbreak and the number of infected premises, so reducing all of the above categories of costs.

 

5.7       The options set out in this RIA concern relatively fine detail of the control powers, intended to make them more effective.  Precisely because they are fine details, it is difficult to model or quantify their impacts in the context of the enormous range of possibilities for the scale of a future FMD outbreak.  We have made some attempt at quantifying the unit costs and the scale of the measures set out in tables A and B above and in Annex 2 and we will be seeking views and additional information during the consultation period.

 

5.8            However it is possible to quantify the importance of some of the larger changes in control strategy.  The 2005 CBA studied the expected magnitude of FMD outbreaks when various parameters are varied. Scenarios modelled included various levels of 'Dangerous Contact' (DC) tracing effectiveness. If traceability of DCs is a reasonable proxy for the effectiveness of FMD control policies then it is possible to comprehend the scale of possible benefits to be realised from the new FMD SIs. The CBA model suggests that, compared to 'standard' traceability (half that estimated to have been achieved towards the end of the 2001 outbreak), then moving towards full effectiveness (i.e. doubling the effectiveness of tracing) could reduce the total outbreak costs in the worst  type of outbreak by around 30%. This would be equivalent to reducing the cost of the modelled outbreak in that scenario by between £30 million and £100 million, depending on control decisions taken.  It is not possible to quantify the contribution to such an effect which would be made by the detailed measures now proposed. Nevertheless, the overall benefits of increased effectiveness are clear.

 

6.            Option 1 – Benefits

 

6.1       To continue to rely on the 1983 Order would result in significant under-implementation of the EU Directive. It would also not adequately reflect the changes and developments in FMD policy since 2001 nor the increased emphasis or effective processes needed to have emergency vaccination as a disease control option in a future outbreak. There would be no additional economic, social or environmental benefits from this option.

 

7.            Option 1 – Costs

 

7.1       As noted above, Option 1 is not feasible as the UK is legally obliged to implement the EU FMD Directive into domestic legislation. There would be additional costs, especially environmental and social costs, as this option does not adequately reflect the lessons learned from the 2001 outbreak.

 

8.            Option 2 - Benefits

 

8.1            Provisions that would be introduced under Option 2 which would increase disease control effectiveness are those listed in Table A above. The most important provisions here are those relating to the treatment of meat, which will reduce the risk of onward transmission of FMD through meat and meat products, particularly the risk that products may subsequently come into contact with animals in a FMD-free part of the country.  The size of the expected benefits may be relatively small, but the large costs incurred in 2001, and the modelled possible reductions in costs (as discussed above) means that extra controls will usually be economically desirable.

 

8.2       This option also gives greater emphasis to the use of emergency vaccination as an additional disease control strategy which is more explicit than under Option 1.  This is in line with the recommendations of the national inquiries, and with the Government Response, into the 2001 outbreak. Both national Inquiries (the Lessons Learned Inquiry and the Royal Society Report into Infectious Diseases[5]) recommended, and the Government accepted, that the option of emergency vaccination should be considered as part of the control strategy from the start of any outbreak of FMD. The primary control policies remain the slaughter of susceptible animals on infected premises and those identified as dangerous contacts, but the Directive moves emergency vaccination to the forefront of control strategies.

 

8.3       The controls required following vaccination are now explicit in the Directive, which should improve understanding of the possible impact of such a policy in a future outbreak. Greater detail of the disease framework should allow for better preparation for a future outbreak, and preparation is key to effective control.

 

8.4       The 2005 CBA scenarios allow us to model various delays in the deployment of vaccine. In the worst affected county modelled, a delay in the deployment of vaccine resulted in roughly a 5% increase in the total outbreak costs. A speeding up of vaccine deployment reduced costs by around 2%. If high virus infectivity is assumed, then the costs can be expected to increase by around 10% if vaccine deployment is delayed. Faster vaccination deployment may be a reasonable proxy for some of the additional powers that the new FMD SIs will allow under either Option 2 or Option 3, and so these estimates give an idea of the potential benefit in some scenarios. Options 2 and 3 would allow us to implement an effective vaccination programme, if the decision to vaccinate were taken.

 

8.5       There could be small reductions in costs to some farmers and other individuals in so far as, under Option 2, they would no longer be legally obliged to comply with some of the provisions of the 1983 FMD Order, listed in Table B above.

 

8.6       The main environmental benefits from the transposition of the EU Directive would be the reduced impacts of culling and disposal which would result as more effective control reduced the number of infected premises and duration of the outbreak. The Directive explicitly includes:

 

·        The need "to prevent any avoidable damage to the environment in the event of an outbreak", for example, through the reduced number of carcasses to be disposed of.

 

·        Requirements to consider the impact on the environment from the use of disinfectants.

 

The disposal hierarchy would be applied to all 3 options: incineration, rendering and licensed commercial landfill.

 

8.7       More effective control through the powers under the Directive would also reduce the negative social impacts of FMD such as stress and social disruption.  The benefit is to rural people who would be protected from FMD or subject to restrictions for a shorter time.

 

9.            Option 2 - Costs

 

9.1       A cost of Option 2 would be the reduced effectiveness of control arising from the loss of some powers under the 1983 Order which are not in the Directive but which are known to be useful in some circumstances in GB. The veterinary justification for having these controls is presented under the benefits section of Option 3.

 

9.2       The possible earlier use of vaccination under the Directive would be intended to reduce FMD control costs in total.  However it may involve increasing some individual cost elements and this may imply some shift of costs between affected groups.  The industry may face costs from Option 2 depending on whether vaccination strategies are used in the event of an outbreak of FMD. As the 2005 CBA study noted, "an important element to consider in the choice of control strategy .........is the proportion of the outbreak cost borne by different sectors of the economy".

 

9.3       The 2005 CBA breaks down the total outbreak costs into five broad categories:

 

·        government opportunity costs;

·        government cash costs;

·        livestock industry cash costs;

·        wider economy cash costs;

·        and other non-cash costs and notes that the Government or the livestock industry bear the majority of the costs.

 

It can be seen from the 2005 CBA that whilst a vaccination strategy might (in some instances) reduce costs to Government through lower cull compensation costs and also reduce the wider economic impact, there might be an increase in the proportional economic cost borne by the livestock industry through increases in withholding costs (ie the costs of retaining animals longer than would be normally be the case) and export market losses.

 

9.4       The environmental cost of carcass disposal is also lower for vaccination as there would be fewer animals slaughtered.

 

9.5       The extra control provisions in Option 2 may have some costs for producers. These are the control measures listed in Table A. Of particular note is that in a few areas the Directive requires controls which could cause some practical problems and contrasts with Option 1 where these activities are permitted. We have suggested some quantitative estimates on the extent of any costs these extra requirements might impose on individual producers in Annex 2 and we will seek industry input to verify these estimates. This information will allow us to provide more detail in this document and to quantify the possible costs more precisely. In particular, we will be seeking more information from producers on the following points:

 

  • Prohibitions on animal movements, except to slaughter, in certain zones. These prohibitions prevent licensing of animal movements in certain circumstances where the veterinary view is that failure to allow movement could compromise animal welfare. However, as animal movements are one of the key routes for disease transmission, there are clear benefits to be gained from establishing tight movement controls. If livestock keepers, who have primary responsibility for the welfare of their animals, assess that their animals need to be slaughtered for welfare reasons, then this would increase the total cost of bringing the disease under control. It is proposed that the Government would pay for the cost of disposal, but would not compensate for welfare slaughter. Assuming national movement controls are put in place on confirmation of FMD and extend over a period of weeks or months, we will be assessing the likely scale of welfare slaughter required by species and the extra cost to livestock keepers.

 

·        A prohibition on testing of milk samples for milk hygiene purposes in laboratories not authorised to test for FMD virus. This may cause practical problems for dairy companies monitoring the quality of milk collected in these zones prior to pasteurisation for milk hygiene purposes. The milk is normally tested at a laboratory for antibiotic residues, water and butterfat content as farmers are paid for the quality of the milk. We will be assessing the likely scale of additional cost from any practical problems this would create for the dairy industry.

 

·        Requirement for treatment, including heat treatment, of fresh meat and meat products from animals from the protection and surveillance zones.  We will be assessing the costs to producers involved in heat treatment.

 

  • The requirement for de-boning and maturation of meat from vaccinated animals, in line with OIE rules.  As a broad guideline, estimates as at April 2001 on the costs and benefits of an emergency vaccination policy in Cumbria at the time suggested that, in relation to fresh meat from vaccinated cattle, the requirement for both de-boning and maturation would have increased the cost of slaughtering by some 5% - 15% and to require a price discount of broadly 10%. [6] It is thought that costs could be particularly significant in the case of lamb. These costs will influence the acceptability of a vaccination-to-live policy to certain sectors or individuals.  We will be assessing how realistic these estimates are.

 

10.            Option 3 - Benefits

 

10.1            Veterinary advice based on experience from the 2001 outbreak is that, in some areas, the imposition of more extensive measures than just those set out in option 2 will allow any future disease outbreak to be controlled more quickly and effectively. The addition of extra controls in Option 3 (Table B) to the minimum set out in the Directive is the recommended option as these could lead to some reduction in the overall size and duration of any future FMD outbreak and hence help limit the wider impact of an outbreak and the cost of dealing with it. The additional controls proposed, to those required by the Directive, are currently within the 1983 FMD Order and were an essential part of disease control strategy in 2001.

 

10.2    These are very similar to Option 2's benefits (see above), although the small private benefits from the lack of provisions from the 1983 Order will not be realised by farmers and other individuals as they are in Option 2. The veterinary justifications for Table B control provisions (which would be lost from the Order under Option 2, but included under Options 1 and 3) are as follows:

 

  • The benefit expected to accrue from the requirement to control rats is that rats will be prevented from acting as vectors for the disease, for example, if they moved off the farm to neighbouring holdings.

 

  • In the protection and surveillance zones, established around an infected premises, the provisions in the draft SIs concerning control of dogs and poultry would prevent these animals, which are difficult to disinfect, carrying disease from, or to, the premises. Dogs (other than in houses) are required to be confined to a kennel or enclosure; or secured to a fixed object by a collar and chain; or accompanied by a responsible person. There are already powers to seize dogs which are not kept under control, under the Environmental Protection Act 1990. The provision concerning poultry is permissive, and allows an inspector to confine poultry to a specified part of the premises. The purpose of confining poultry would be to limit the possibility of any disease being spread from the premises.

 

  • The controls in the SIs on shearing, dipping and scanning of sheep in protection, surveillance and restricted zones were introduced in the 2001 outbreak but, prior to the controls being introduced, sheep shearing and related activities had been banned because of the high risk they presented of spreading disease. However, a prolonged ban on such activities would be at the cost of serious animal welfare issues. On the basis of separate veterinary risk assessments for sheep shearing, sheep dipping and other sheep husbandry activities, such as scanning, a number of risk management options were accepted. These provide a way of allowing the activities to take place whilst minimising the risk of causing further outbreaks of disease.

 

11.            Option 3 - Costs

 

11.1    These are similar to Option 2's costs, but under option 3 the SIs would include the provisions of the 1983 FMD Order, so this significant cost (i.e. the 'cost' of reduced FMD control) can be omitted from the analysis. This will mean that Option 3 combines the new powers under the EU Directive with the old powers from the 1983 FMD Order and will offer the greatest effectiveness of FMD disease control in the event of an outbreak. Option 3 is therefore likely to offer the greatest net benefits of the three options.

 

12. Issues of Equity or Fairness

 

12.1    In the event of an outbreak of FMD, the control measures would be proportional through being more stringent in infected areas - that is protection, surveillance and vaccination zones - than in uninfected areas.

 

13. Consultation with small businesses: the Small Firms Impact Test

 

13.1    In the event of an FMD outbreak, the measures in the Order are likely to affect small businesses in particular, predominantly farmers, but also other small businesses in rural areas. During consultation on the draft Directive which this Order implements, we received no specific feedback from small businesses. Subsequently, after discussions with the Small Business Service, we carried out a further consultation exercise targeted specifically at those small business organisations recommended by the SBS. No feedback whatsoever was received. Similarly, direct approaches to small businesses through stakeholders have yielded no feedback. We will, of course, continue to seek views from small businesses throughout the consultation process.

 

14.            Competition Assessment

 

14.1    The SIs are likely to have only a minor impact on competition in the markets directly affected by it. The major markets affected include the European markets for beef, sheep meat and pig meat, as well as markets for the trade in live animals. Other farm types, such as poultry holdings, may incur indirect impacts from the regulations. Furthermore, whole other sectors of the rural economy, such as the tourism industry, may be indirectly affected by the SIs.

 

14.2    Of the markets directly affected by the SIs, all are characterised by low levels of concentration; no firm has 20% market share and no three have 50%. The SIs will affect some firms substantially more than others. The shocks to supply that the SIs may bring about if implemented would not be due to competitive distortions.

 

14.3    The SIs will have a temporary impact on the market structure if an FMD outbreak occurred, reducing the number of meat and animal suppliers. There will be no extra set-up or ongoing costs for new entrants to meet compared to existing firms. In the event of an FMD outbreak firms’ ability to choose the price, quality, range and location of their products will be severely affected. However, English consumers are not expected to suffer as a result of this, since substitution to imports or other non-affected meat, such as poultry, will be possible.

 

15.            Enforcement and Sanctions

 

15.1    In the event of an outbreak, enforcement of the proposed measures in GB will be implemented by the State Veterinary Service Agency, as under existing EU and national law, and in Northern Ireland by the Department of Agriculture's Veterinary Service. Local Authorities will assist in enforcement. According to the returns submitted to Defra, there were 44 prosecutions taken in 2001, and 78 in 2002 under the FMD Order 1983 (as amended).

 

15.2    The EU Commission has responsibility for monitoring enforcement by Member States in order to ensure uniform application of EU legislation.

 

15.3    The effectiveness of UK enforcement procedures is kept under ongoing review. Any evidence of failure to enforce on other Member States is drawn to the attention of the Commission.

 

16.       Monitoring and Review

 

16.1             Monitoring of the effectiveness of the Regulations will arise from regular National Contingency Plan exercises.

 

17.       Consultation

 

17.1    Within Government

 

17.2    In development of the SIs and production of this RIA, we have consulted with the Small Business Service, Office of Fair Trading, other policy makers in Defra, departmental economists and colleagues in the Devolved Administrations.

 

17. 2   Public Consultation

 

17.3    A full formal written public consultation exercise giving stakeholders the opportunity to comment on the proposed Directive started on 7 February 2003 and ran until 2 May 2003. A further consultation period, specifically targeted at small businesses ran from 28 July to 17 October 2003. This RIA accompanies the consultation on the three SIs taking place over the summer of 2005.

 

17.4    A series of stakeholder meetings to discuss the implications of the disease control strategies arising from the draft Directive, in particular the controls required in the protection, surveillance and vaccination Zones, started in January 2003. Issues and concerns raised by stakeholders at these meetings were highlighted during negotiations on the Directive and in some instances improvements to the proposal were secured, for example, in the treatments of products from vaccinated animals. We are arranging a series of meetings with key organisations during June and July 2005 to discuss these issues in more depth.

 

18. Summary and Recommendation

 

18.1    The Directive being transposed by these SIs seeks to update and consolidate existing EU measures for the control of FMD, particularly in the light of the experience gained during the 2001 outbreak. The SIs provides a full range of disease control measures, particularly emergency vaccination, to limit the size of future FMD outbreaks and so limit the impact not just on the farming and food sectors but on other rural businesses and tourism. However, these detailed control measures will impact on the meat and milk sectors in particular. We recommend Option 3, as this combines the new powers under the EU Directive with the old powers from the 1983 FMD Order and will offer the greatest effectiveness of FMD disease control in the event of an outbreak. Option 3 is therefore likely to offer the greatest net benefits of the three options.

 

For Final RIA only

Declaration :

 

I have read the Regulatory Impact Assessment and I am satisfied that the benefits justify the costs.

 

Signed by the responsible Minister: ...............................

 

Date: .....................................


Contact: Andrew Jones, FMD Directive Transposition Project Manager, Defra





May 2005


ANNEX 1

 

Where FMD is suspected (prior to confirmation of an outbreak)

 

The implementing legislation provides for the following measures to be taken:

 

·        An obligation is placed on those in charge of animals or animal carcases to provide “notification of infection or suspected infection”. A “notice of suspicion of disease” will be served by a Veterinary Inspector on the occupier of the premises in cases where infection is detected or on the person in charge of animals in transit.

 

·        Following the detection of disease, or suspected disease, a “Temporary Control Zone” (TCZ) would be imposed around the suspect premises. Measures to be imposed on occupiers within the TCZ would include movement controls, involving a time-limited temporary movement ban beyond the TCZ, isolation of susceptible animals, prevention of any animals straying from the premises, a requirement for erection of signs publicising the presence of infection or suspected infection and the need for record keeping. These measures are to be maintained for the duration of the period that the TCZ remains in force.

 

·        Suspect holdings will be investigated to establish the presence or absence of the disease within the TCZ. As a result of the investigation, the premises concerned may be declared as infected if the outcome proves positive and a notice will be served on the occupier to this effect. In addition, further premises may be declared as “suspect” if there is a risk of contamination arising from infected premises or where the possibility of an epidemiological link with such premises cannot be excluded. Furthermore, premises may be identified as “contact premises” in cases where there is a risk of disease being carried to or from other premises.

 

Where FMD is confirmed

 

The legislation requires the following measures to be taken:

 

·        Slaughter of susceptible animals is to take place on the infected premises where the animals are located, unless a Veterinary Inspector (VI) advises this would be an unsatisfactory method of disease control. Where the infected premises is a slaughterhouse or a border inspection post, or where animals are in transit when disease is confirmed, a licence authorising movement of animals may be issued.

 

·        Disposal of carcases and faecal material from slaughtered animals will be undertaken by occupiers under direction from a VI and treated as Category 1 material.

 

·        Occupiers of premises where slaughter has taken place are responsible for ensuring the isolation of specified products. Isolation is to be maintained until items have been either certified as free of contamination, have been treated in accordance with instructions or removed from premises and treated as Category 1 material under licence.

 

·        Occupiers of all premises where slaughter has taken place are responsible for ensuring that cleansing and disinfection takes place, under direction from a VI. Following completion of cleansing and disinfection, restocking can be carried out after 21 days subject to certain conditions, and in particular when the premises has been confirmed as disease free.

 

·        A Protection Zone (PZ) and a Surveillance Zone (SZ) will be declared on confirmation of disease on premises including holdings, slaughterhouses or border inspection posts. A PZ is based on a minimum radius of 3km around the infected premises and the SZ based on a minimum radius of 10km centered on the outbreak. Conspicuous signs marking the boundaries of the PZ and SZ will be erected on all roads entering and exiting these zones. Any premises which are partly inside such a zone will be regarded as being fully inside it.  Zones will remain in force until cleansing and disinfection measures have been carried out and a survey of susceptible animals has confirmed the absence of infection.

 

·        Within the PZ and SZ, there are controls on straying; record-keeping; regular veterinary inspection of premises; movement controls for susceptible animals; control of dogs and poultry; control of sheep shearing, dipping and ultrasound scanning. There are also controls on the sale of semen, ova and embryos, hides and skins, wool, hair and bristles and other animal by-products from susceptible animals.

 

·        Within the PZ, controls apply to movements of animals into or out of the zone and there are also restrictions on the holding of fairs, markets, shows and other gatherings of animals or people. There are also controls which apply to the breeding and slaughter of susceptible animals for private consumption, transport and sale of fodder and transport and spreading of faecal matter produced within the zone. There are restrictions on the transport and sale of milk and milk products and they are required to be heat treated (including UHT treatment and pasteurisation) for human consumption. There are also controls on the sale of meat and meat products and detailed requirements concerning the date of production, origin, storage, marking of meat and treatments to be applied. The latter includes heat treatment and de-boning and maturing of meat and meat products.

 

·        Within the SZ, there are restrictions on the sale of, and requirements for treatment of, meat and meat products and milk and milk products produced in the SZ. These include heat treatment and de-boning and maturing of meat and meat products and the heat treatment (including UHT treatment and pasteurisation) of milk. In addition, controls on transport of milk and milk products and the transport and spreading of faecal material are in place within this zone.

 

Requirements for emergency vaccination

 

Any authorisation to vaccinate must specify the terms and conditions which apply including whether vaccination is to be protective or suppressive, the geographical area involved, the species of animal involved and the duration of the campaign. The measures to be taken will include the following:

 

·        Protective vaccination (to live) - This requires the setting up of vaccination zones (VZ) and vaccination surveillance zones (VSZ) and specification of the geographical limits of these zones;

 

·        Suppressive vaccination (to kill) - Where this is required, the holdings concerned will be identified and a notice will be served on the occupiers;

 

·        Keepers of animals are, where practical, required to provide any information regarding the animals they are responsible for, to submit animals for vaccination as required and to provide any assistance as may reasonably be required with securing animals to facilitate vaccination;

 

·        All those involved in carrying out vaccination are responsible for the identification of vaccinated animals through ear tagging and marking and making a full written record.

 

Within a VZ, the following time phases and measures will apply:

 

·        Phase 1 starts on the declaration of a VZ and involves the administration of vaccination;

 

·        Phase 2 start 30 days after all the animals in the VZ have been vaccinated and will be declared by a notice which will also mark the end of Phase 1. During this phase, a clinical and serological survey of all the holdings within the zone will take place, the outcome of which will determine whether holdings are classified as infected, depopulated or free of disease.

 

·        Phase 3 will start on completion of measures to be undertaken as part of Phase 2 or may commence before this if a holding has independently been confirmed as free of disease.

 

In the event of an emergency vaccinate to live policy, the legislation imposes movement restrictions on susceptible animals. It also requires controls on the sale, movement and transport of meat and meat products and milk and milk products and includes post-vaccination treatments for these products. These include heat treatment, de-boning and maturing of meat and meat products and pasteurisation of milk from vaccinated animals. There are also restrictions on artificial insemination and collection of ova and embryos, marketing of hides and skins, sheep wool, ruminant hair and pig bristles and on the transport and distribution of dung and manure.


ANNEX 2

 

ADDITIONAL INFORMATION ON THE COSTS OF FMD CONTROL MEASURES

 

Table A – New requirements in the 2003 Directive

Unit costs

Source and reliability

Quantity

Scale

The prohibition of placing on the market fresh meat and meat products from animals originating or produced in the zones unless they had undergone various specified treatments, including heat treatment.

2005 CBA assumes farms in restricted areas would seek to retain livestock as long as possible, so that the 30 day derogation allowed under the regulations will eventually enable them to send livestock to slaughter without restrictions.

 

The costs of this are likely to be in the region of £50-100 per bovine animal per month, assuming that the animal in question would optimally have been sold onto the market on day 1, considering both maintenance costs and loss of market value.

 

Corresponding figures for pigs and sheep will be lower.

 

Alternatively, where heat treatment etc is used:

 

Cost of heat treatment possibly around £50/t where capacity available.

 

Price discount on heat treated meat in the region of 30%-50%, assuming a market will continue to exist.  (This cost may be offset in some cases by improved market access under OIE rules for some categories of meat where the alternative is disposal and destruction.)

Movement restrictions costs for bovines based on work on costs of the 6 day standstill regime, plus Thompson et al paper on the cost of the 2001 FMD outbreak.

 

 

Preliminary estimates for discussion purposes.

Number of farms marketing meat inside the zones.

 

Number of livestock from these farms which would have been marketed during the restriction period.

 

 

 

 

 

 

Number of farms marketing meat inside the zones.

 

 

Number of livestock from these farms which would have been marketed during the restriction period.

Significant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Significant

 

Requirement for de-boning and maturation of meat from vaccinated animals, which is in line with OIE rules.

This is an increased cost to the abattoir around 5-15% of the cost of slaughtering, likely to be on the low side of this range i.e. around £10 per bovine animal. Cost of disposal of bones also needs to be considered, subject to the Animal By-Products Regulations.

 

The percentage increase in costs associated with sheep and pigs will be greater. Unlike for bovines, the trade is not obliged to de-bone these animals. Boning costs higher for these species in relation to weight and value of the carcase. Indications are that de-boning sheep is not economically viable.

 

In addition there will be a price discount on the final product, possibly around 10% to reflect the fact that vaccinated meat and non-vaccinated meat need to be kept separately, and vaccinated meat may not reach the same markets.

Calculated roughly based on increased costs of slaughtering BSE animals from MLC data.

 

No estimate yet available for sheep and pigs.

Number of vaccinated animals passing through abattoirs.

Significant

 

Prohibitions on animal movements, except to slaughter, in certain zones.

In cases where a welfare movement would have been permitted but must be replaced by a movement to slaughter, the unit cost would be the drop in value from breeding, milking or store value to a premature slaughter value. Mitigating action would tend to ensure that this applied to animals where the drop in value would be lowest. In the case of the lowest value animals, there would be a disposal cost. Typical value loss may be £200 per bovine.

Preliminary estimates for discussion purposes.

Number of welfare movements which would have been permitted under previous regulations.

Minor

 

A prohibition on testing of milk samples for milk hygiene purposes in laboratories not authorised to test for FMD virus.

Seeking views from industry on likely cost. The restrictions on movement and animal products in the Directive will not have any impact in price or saleability of milk, but potentially some disruption to milk tankers. No loss of value of vaccinated stock or products e.g. milk.

No estimate available – will be sought from industry during consultation.

Number of dairies and milk hauliers adapting business practice.

Minor

 

 

 

 

 

 

 

Table B – Existing Provisions of the 1983 Order to be carried forward

Unit costs

Source and reliability

Quantity

Scale

 

Requirements to control rats on premises where disease is suspected or on contact premises.

Measures that a good stockman would be expected to take as part of the efficient running of his farm. Where new action, there will be a rat control contractor cost. Where compulsion is required, add cost of issuing order and farmer time.

No estimate available – will be sought from industry during consultation.

Number of farms where compulsion required (extremely small proportion of farms in affected areas).

Negligible

 

Requirements to control dogs and poultry in zones established around an infected premises.

Keeping dogs under control. Keeping poultry to a specified part of the premises if required by a veterinary inspector. Some minor cost per farm where compulsion.

Movements of poultry from the premises allowed by licence. Cost of applying for and issuing licences.

No estimate available – will be sought from industry during consultation.

Number of farms where dogs/poultry need to be controlled compulsorily.

Number of poultry movement licences issued.

Negligible

 

Controls on shearing, dipping and scanning of sheep by mobile workers.

The controls on shearing, dipping and scanning of sheep will allow for these activities to carry on, but under certain licence conditions.  Costs of applying for and issuing licences plus cost of adapting contractor business practices. No costs to farmers who would normally shear their own sheep.

No estimate available – will be sought from industry during consultation.

Number of licences issued.

 

Number of sheep farms adapting practices (or number of sheep affected).

Minor

 

Provision to close footpaths (but only within 3km of an infected premises).

Foreign and domestic tourism is only affected inside restricted areas (inside PZs and to a lesser extend SZs); Approximately ¾ of affected domestic tourism expenditure is transferred elsewhere in the economy. The usage of those footpaths closed will be displaced to other areas of countryside and footpaths that are open - as there will no longer be a national closure of footpaths outside of PZs as there was in 2001. Assume maximum 25% of tourism revenue within PZs will be lost (measuring lost benefits with no alternative use of resources), depending on scale of zone.

Estimate from national rural tourism figures, 2001 and 2005 CBA.  Assumption on scale.

Total area of PZs (area within 3km)

Locally significant

 

Powers to control shooting, stalking and drag hunting.

The main cost is applying for and issuing licences during the outbreak (particularly if during the shooting season).  Some activities may be foregone, incurring costs.

No estimate available – will be sought from industry during consultation.

Number of licences for shoots and events.

Number of events foregone

Minor

 

Powers to control animal gatherings (markets, fairs, etc) beyond the immediate infected area.

Cost of movements foregone e.g. of breeding stock to shows may average in the region of £200/breeding animal, but considerably higher for some cases. Cost of market movements foregone £10/bovine, £1/sheep. (Negligible market movements for pigs.)

Preliminary estimates for discussion purposes.

Number of show movements affected.

Number of market movements affected.

Minor

 

 

 



[1] Risk Solutions: Cost Benefit Analysis of Foot and Mouth Disease Controls published 26 May 2005. http://www.defra.gov.uk/footandmouth/pdf/costben.pdf

[2] D Thompson, P Muriel, D Russell, P Osborne, A Bromley, M Rowland, S Creigh-Tyte and C Brown: Economic Costs of the Foot and Mouth Disease outbreak in the United Kingdom in 2001

[3] Foot and mouth disease 2001: Lessons to be Learned Inquiry, July 2002: http://archive.cabinetoffice.gov.uk/fmd/nav/report.htm

[4] Risk Solutions: Cost Benefit Analysis of Foot and Mouth Disease Controls published 26 May 2005. http://www.defra.gov.uk/footandmouth/pdf/costben.pdf

[5] The Royal Society Report: "Infectious Diseases in Livestock", July 2002.

[6] MAFF estimates at the time of the FMD outbreak in 2001.