Johne’s disease is an endemic contagious bacterial infection of ruminants which is
prevalent in the United Kingdom and elsewhere. It can lower financial returns on infected
farms by reducing farm productivity through output losses and control expenditures.
A farm-level analysis of the economics of the disease was conducted taking account
of farm variability and different disease prevalence levels. The aim was to assess the
financial impacts of a livestock disease on farms and determine their financial vulnerability
if farm support payments were to be removed under future policy reforms. A farm-level
optimization model, ScotFarm, was used on 50 Scottish dairy farms taken from the Farm
Business Survey to determine the impacts of the disease. A counterfactual comparison
of five alternative “disease” scenarios with a “no-disease” scenario was carried out to
evaluate economic impact of the disease. The extent of a farm’s reliance on direct support
payments was considered to be an indicator of their financial vulnerability. Under this
definition, farms were grouped into three financial vulnerability risk categories; “low risk,”
“medium risk,” and “high risk” farms. Results show that farms are estimated to incur a
loss of 32% on average of their net profit under a standard disease prevalence level.
Farms in the “low risk” and “medium risk” categories were estimated to have a lower
financial impact of the disease (22 and 28% reduction on farm net profit, respectively)
which, along with their lower reliance on farm direct support payments, indicate they
would be more resilient to the disease under future changes in farm payment support.
On the contrary, farms in the “high risk” category were estimated to have a reduction of
50% on their farm net profit. A majority of these farms (61%) in the “high risk” category
move from being profitable to loss making under the standard disease scenario when
farm support payments are removed. Of these, 15% do so because of the impact of the
disease. These farms will be more vulnerable if changes were to be made in farm support
payments under future agricultural policy reforms.
- Farm-level model
- Johne’s disease