World Bank outlines economic effects of bird flu

The report outlines the projected economic consequences and lossof life due to a possible avian influenza pandemic worldwide. Such warnings areserving to increase consumer fears about the safety of poultry meat throughoutthe bloc.

Consumption of poultry meat has dropped by more than half insome EU states, with 300,000 tonnes and more in storage across the bloc,according to previous EU estimates.

While no human case of the H5N1 virus has occurred in theEU, scientists worldwide have been worried that H5N1, which can pass frompoultry to humans, may mutate so that it can be transmitted from human to humanand start a influenza pandemic. Worldwide, governments are starting to step uptheir precautionary measures against the disease as more scientific evidencepoints to coming pandemic.

For example, a UK government department said yesterday itwill order a further ten million doses of avian influenza vaccine for possibleuse in poultry and other captive birds.

The measure is being taken as a precaution in case the UKsuffers a large outbreak of avian influenza in its domestic poultry flock.

The country's chief veterinary officer recommended the stepbe taken as a precaution, the Department of Environment, Food and Rural Affairs(Defra) stated in a press release.

The measure is being taken "to ensure that Defra hasevery tool available to tackle an avian influenza outbreak, in light ofuncertainties about the future spread and nature of the virus"​, thedepartment stated.

Defra already has 2.3 million doses of vaccine boughtearlier this year for a possible preventive vaccination of zoo birds.

The World Bank has estimated that a severe avian flupandemic among humans could cost the global economy about 3.1 per cent of grossdomestic product - around US$1.25 trillion on a world gross domestic product of$40 trillion.

The severe case scenario, prepared by the Bank's DevelopmentEconomic Prospects Group, is based on a one per cent mortality rate - or about70 million people.

Until now, the principal transmission of the H5N1 form ofthe bird flu virus has occurred between animals, and, to a very limited extentfrom animals to humans.

The principal costs have been felt in the rural orcommercial poultry sectors of affected economies.

However, as these outbreaks continue and spread to newregions, they also increase the probability of a second stage, withhuman-to-human transmission and a global influenza pandemic, with enormouslygreater costs on a world scale, the World Bank report stated.

Until recently highly pathogenic avian influenza H5N1 virushad been concentrated in East Asia, where some 10 countries had experiencedoutbreaks since late 2003, the most serious in Vietnam, Thailand, Indonesia andChina.

In the last six to nine months, the virus has gone global,spreading to over 40 more countries.

In Western and Central Europe the majority of these newoutbreaks have been among wild birds. But elsewhere, in South Asia, CentralAsia, the Middle East and Africa, nearly all the new outbreaks have been amongpoultry.

Among the many things not fully understood about the diseaseis its mode of transmission, the report stated.

However it now appears that both wild birds and domesticpoultry are involved in transmission, the latter through poultry trade, bothlegal and illegal or informal.

In most economies the impact has been relatively limited sofar, mainly because the poultry sector is a relatively small part of the worldeconomy, stated Milan Brahmbhatt, the bank's lead economist for East Asia.

There are direct production costs because of losses ofpoultry, due to the disease and to control measures such as culling birds, withimpacts extending not only to farmers but also to upstream and downstreamsectors such as poultry traders, feed mills, and breeding farms.

According to the Food and Agriculture Organisation, over 200million poultry have died or been culled since the end of 2003, mostly in EastAsia.

The largest declines have occurred in Vietnam and Thailand,where they were equal to 15 per cent to 20 per cent of the stock of poultry.

Additional losses have occurred because of lower eggproduction and reduced activity in distribution channels.

There are also secondary or indirect impacts related tosharp shifts in market demand which result primarily from spontaneous effortsby consumers to reduce their perceived probability of becoming infected fromeating the meat.

In Romania, for example, which has suffered about 100outbreaks of the disease in poultry over recent months, domestic sales have fallen by 80 per cent, Brahmbhattstated.

Many Romanian producers are on the verge of bankruptcy. InIraq only 10 per cent of semi-commercial farms remain operational, and therehave also been large losses in Turkey.

In France, Europe's leading poultry producer, producers hitby sharply lower demand reportedly lost 40 per cent of their income in thefirst quarter of 2006, he stated.

The poultry feed sector in Europe, which accounts for aturnover of $42bn, has been hit with a 40 per cent reduction in demand forpoultry feed in some EU countries.

The Food and Agriculture Organisation projects an eight percent to nine per cent fall in European poultry consumption this year, which iscontributing to sharply lower prices and poultry producer incomes worldwide.

"Thus even in Brazil, which has not experienced anoutbreak of the disease, weakening world demand and lower prices have inducedthe main suppliers to reduce production by 15 per cent this year,"​Brahmbhatt stated.

Thailand, which is the only large net exporter of poultry inEast Asia, had already experienced a 40 per cent fall in poultry exports in2004 due to import restrictions in foreign markets on its uncooked, poultryexports.

"Exporters have managed to switch from uncooked to cookedpoultry exports, which are not affected by trade restrictions, as a result ofwhich exports began rebounding last year,"​ he stated.

The number of human infections and deaths reported to WHOhas accelerated in the past six months. There were 41 deaths in all of 2005,but 54 in only the first half of 2006, more than twice the pace of last year.