Horses - FOOT AND MOUTH WILL COST THREE QUARTERS OF A BILLION IN 3 MONTHS - February 2001 - equiworld.net

FOOT AND MOUTH WILL COST THREE QUARTERS OF A BILLION IN 3 MONTHS

The NFU has estimated that if the foot and mouth outbreak is not brought under control in three months, the cost to the farming and food industry will be three quarters of a billion pounds.

The loss from the export ban and the restriction on movements of animals has been an estimated £21 million in the first week and about £38 million if the rest of the supply chain is included.

And if these measures last for three months, the cost to the whole industry could be at least £775 million.

But NFU President Ben Gill said these are very provisional figures based on a number of assumptions about the length, breadth and severity of the outbreak.

He said: "It is a highly dynamic situation and changing all the time. We fear these losses could sadly turn out to be much, much higher."

A briefing document by NFU economists shows that the ban on exports alone could cost lamb producers £26 million, pigs £17 million and dairy farmers £8 million a month - with fears that it may be several months before it is lifted.

Other knock on costs dramatically bump up the bill that will land on farmers' doorsteps. The reduction in the value of animals could cost £4 million a month with extra feed and housing costs due to keeping animals on farm of another £4 million.

And loss of income from farm bed and breakfast, shops and other diversifications could cost at least £30 million a month as potential customers are warned to stay out of the countryside.

Some of the costs to the rest of the supply chain include the cost of disinfectant, overtime for the delivery and collection of milk and feed and the extra costs to abattoirs, auctions and food companies.

Mr Gill said: "We are unlikely ever to know for sure what the full cost is to the industry but there is no doubt it will be a considerable sum.

"And when these losses are set against the stark fact that farm incomes fell by over two thirds over the last five years to just £5,200 for the average farm, the picture becomes bleaker still. Any one can see how ill we can afford this disaster.

"Most of these losses cannot be insured against. Through no fault of their own farmers are finding themselves pushed closer to the brink."

New agrimoney aid of £156 million announced by the Government this week is designed to compensate farmers for the effects of the strong pound in 2000 and is not compensation for the current foot and mouth outbreak. It will however ease the significant cash flow problems that are building up on farms at the moment.

The NFU will be talking to Government in the coming days about what other compensation might be necessary to help farmers and the industry offset consequential losses.