Financial impact of Foot and Mouth Disease and Contagious Bovine Pleuropneumonia along the cattle marketing chain in selected districts in Uganda

S A Baluka, A Mugisha and M Ocaido

College of Veterinary Medicine, Animal Resources and Biosecurity, Makerere University, Kampala,
P.O Box 7062, Kampala, Uganda
sbaluka3@gmail.com

Abstract

A study was done to determine the financial impact of Foot and Mouth Disease (FMD) and Contagious Bovine Pleuro Pneumonia (CBPP) along the cattle marketing chain in International Border Districts (IBDs) (Rakai and Isingiro), and inland districts (IDs) (Nakasongola and Nakaseke), Uganda.

In Isingiro district, during FMD outbreaks bulls and cows were salvage sold at 83% and 88% less market value respectively, amounting to a loss of USD 196.1 in small cattle herd sized farms and USD 1,553 in medium farms annually. No cattle were salvage sold in the large farms. Also in Isingiro, there were marked financial losses caused by reduction of milk sales during FMD quarantine periods. In Nakasongola district, CBPP financial losses due to reduction of milk sales during a six month quarantine period ranged from USD 105 to USD 209. IDs earned more income from cattle markets than the IBDs hence suffered more marketing losses. There was 31% revenue reduction from cattle markets in all study districts during the study period (2006-2010), of which 52% of the losses were incurred in Nakasongola due to CBPP, 36% in Isingiro district due to FMD and 11% in Nakaseke due to FMD. About 49% of losses (USD 223,216) were due to CBPP outbreaks in Nakasongola and 52% of losses (USD 244,215) were due FMD in Isingiro (2006-2010), Nakaseke in 2007 and Nakasongola in 2010.  FMD outbreaks were more wide spread; hence vaccination against FMD should be done in all the study districts. While control measures against CBPP should be done in IDs more specifically in Nakasongola.

Key words: disease control, financial losses, livelihoood, salvage sales

Introduction

Livestock are among the few tradable commodities possessed by poor households living in the arid and semi-arid regions of sub-Saharan Africa (Fevre et al 2006, AU-IBAR 2010). Livestock provide a potential pathway out of poverty for rural producers and other actors along the marketing chain where market access exists, constitute a means of investment and fulfill important networking functions (Rich and Perry 2011, Perry et al 2003). 

Animal diseases affect all livestock owning households and actors along the marketing chain including traders, transporters and all people employed in the livestock sector and consumers by threatening their assets and making their incomes insecure (Rich and Perry 2011; Perry et al. 2003). An FMD outbreak can reduce beef exports up to 32% as a result of animal health implications and production losses (Otieno et al 2008). Hagerman et al (2009) estimated the market value of animals lost during FMD outbreaks using a schedule of the market value based on the pre-disease market conditions and concluded that changes in market prices contribute to the losses suffered by farmers.

Persistence of TADs in any part of the world poses serious risk to the global animal agriculture and food security besides endangering international trade (Domenech and Eddi 2005). A country’s FMD status is an important determinant for international trade of beef and presence of TADs in most SSA countries constitutes market access barriers for livestock inputs and outputs; restrict sales of the outputs to less profitable local and informal markets (Rushton 2009, AU-IBAR 2010, Kitching et al 2007). Animal diseases threaten the animal products marketing sector and exert ripple effects to the wider economy (Pritchett et al. 2005, Morgan and Prakash 2006; Rich and Wanyoike 2011, Perry and Grace 2009, Rich and Perry 2011). FMD and CBPP cause loss of production and livelihoods to the vulnerable people, increase disease control costs, restrict trade in cattle and cattle products; reduce sales and lower prices (Webber and Labaste 2010; Tomo, 2009; Vosloo et al 2002, Kitching et al 2007, Perry et al 2004, Nkhori 2004) reduce the value of marketable outputs besides undermining national economies and farmers’ livelihoods (Bennet 2003, Thomson 2005).

In 2000, the Rift Valley Fever outbreak led to imposition of trade bans on live animals from Ethiopia, Somalia and Kenya with resultant economic impacts; the total economic value of animal trade in the Somali region of Ethiopia fell by $132 million, approximately 42% reduction compared to the normal or non-outbreak years (Rich and Wanyoike 2011).

Animal diseases affect the amount as well as the timing and certainty of marketing and income from livestock enterprises thus depriving farmers particularly the smallholders of cash to buy feeds and replacement stock (Morgan and Prakash 2006, FAO 2007). These diseases impose heavy costs on farmers and reduce the incentive to invest in high yielding exotic breeds that are more susceptible to tropical diseases (MAAIF 2010). FMD and CBPP and their control policies such as ring vaccination and restriction of animal movements that are enforced in affected areas to limit the extent of spread during outbreaks comprise major constraints to livestock production in Uganda (Balinda et al 2010) and limit local trade as well as access to major export markets (King 2002). 

Uganda’s performance in the global livestock export market is negligible except for hides and skins where Uganda had a 1% market share (Moyini et al 2005), but showed a downward trend probably due to the presence of TADs (King 2002). FMD herd prevalence was high (24%) in Isingiro with even a higher prevalence (34%) in adult cattle (Baluka 2014; Baluka et al 2014). CBPP prevalence was particularly high (24%) in Nakasongola (Baluka 2014, Baluka et al 2013).

It was against the above back ground that a study was conducted to determine the financial impact of FMD and CBPP along the cattle marketing chain in inland districts of Nakasongola and Nakaseke and International border districts of Isingiro and Rakai in the cattle corridor, Uganda. The outputs of this study would be used to motivate farmers, local government, extension staff, government of Uganda, policy makers and various actors along the cattle marketing chain to invest in prevention and control of these diseases. Farmers’ cooperation with Veterinary Department is very crucial so as to minimize transmission of these diseases and the associated financial losses during outbreaks.

Materials and methods

A study was conducted in international border districts of Rakai and Isingiro, and inland districts of Nakasongola and Nakaseke respectively within Uganda’s cattle corridor. Locations of the study districts were as shown in Figure 1.

The study involved case studies done in cattle herds and cattle markets affected by FMD and CBPP outbreaks. The studies were done in 11 households for CBPP in Nakasongola and 26 households in Mbaare sub-county in Isingiro district for FMD distributed under small, medium and large herd sizes as shown in Table 1.

Financial market losses to farmers were considered to include: salvage sale losses (live cattle and meat sales) and milk quarantine losses caused by FMD and CBPP.

Live cattle salvage sale losses = age specific number of cattle salvage sold * age specific salvage sale cattle price loss per head of cattle.

Loss due to reduction of milk production during FMD outbreak = ratio of lactating cattle infected with FMD in the herd* reduction in milk yield (litres) due to FMD clinical disease* duration of clinical FMD *price per litre of milk.

Milk sale loss due to quarantine = Amount of milk produced per day by all lactating cattle in the herd* sale loss reduction in price per litre of milk * duration of the quarantine.

Market revenue losses analysis was done in two cattle markets in each district. In Nakasongola district, Nakitoma and Wabinyoyi cattle markets were chosen. In Nakaseke district Ngoma and Kinyogoga livestock markets were chosen. In Rakai district, Kakuuto and Kamuli livestock markets were chosen. In Isingiro district, Bugango and Rwenseke livestock markets were chosen.

Market revenue analysis considered bad and good cattle marketing seasons. The bad season falls within the dry season or drought (January -March and June –August) when cattle move long distances in search for pastures and water, they tend to lose weight, and are generally in poor body condition, the total cattle turnover in cattle markets is low and cattle prices are also low. The good season occurs during the rainy season when cattle have enough pasture and water, cattle are in good body condition, total cattle turnover in markets is high and cattle prices are high. The good season includes festive seasons such as Christmas, Easter, Eid fitir and Eid Aduha.

Annual market revenue losses were calculated as = Total income earned from cattle during good season months + total income earned from cattle sales during the bad season months. Where by:

i)  Annual total income earned from cattle during good season months = number of months in a year in which cattle were sold during good season * price levied per head of cattle * average number of cattle sold during good season market days.

ii)  Annual total income earned from cattle during bad season months = number of months in a year in which cattle are sold during bad season * price levied per head of cattle * average number of cattle sold during the bad season market days.

During estimation of cattle market revenue losses:

It was assumed that:

(i)   If the outbreak lasted 1-4 months, the quarantine period was 6 months; 2 months fell within the good season and 4 months fell within the bad season.

(ii)  If an outbreak lasted for 6months or more then the quarantine period lasted for one year or longer.

a)   The cattle prices  levied per head of cattle were made comparable to price values charged during 2010 by compounding the prices charged  in the previous years (2006-2009) using the formula:

P = P_{i (1+r)}ⁿ

Where P= Discounted price in previous year earlier than 2010

P_i = Price during previous year earlier than 2010

n = number of years before 2010

r = discounting rate of 7%

The market losses in the inland and international border districts and between districts within the same category were determined. The significance difference in revenue was determined using a chi-square test.

The market revenues were determined under the following scenarios:

i)    Revenue earned when there was no FMD/CBPP outbreak

ii)   Revenue earned when there were FMD/CBPP outbreaks

iii)  Income lost when there was FMD/CBPP outbreaks.

iv)  The unit of exchange used was 2550 Uganda Shillings for 1 US Dollar.

Results

In the FMD case study herds in Isingiro, it was found that 61% of the herd which constituted 25% of the bulls in small herds was salvage sold at a price 88% less than the market value. While 11% of the total herd was salvage sold in medium sized herds which constituted 20% of cows which was 83% less than market value. No cattle were sold from large herds at salvage prices during outbreaks and quarantine. The salvage sale losses associated with FMD outbreaks were as shown in Table 2.

In Isingiro district, the average milk yield per cow was 0.9±0.45 and 2.1±0.3 litres during dry and wet season respectively with each litre of milk costing USD 0.17 and 0.13 respectively. During FMD outbreaks, there was 42% drop in milk yield for 12 weeks in infected cattle. Twelve percent of milk which was usually sold was not sold during this period. However, during FMD quarantine period, milk production was resumed by recovered cattle, however only 12 % of the milk was sold. The financial loss due to no sales during FMD clinical period and reduction of milk sales during the quarantine period were as shown in Table 3.

Predicted milk sale losses due to quarantine (6 months) during CBPP outbreak in different herd sizes in Nakasongola district projected at 10% and 20% reduction of milk sales were as shown in Table 4.

The frequency of market occurrence per month, number of cattle sold during bad and good seasons and amount of tax levied per head of cattle were as shown in Table 5.

Annual frequency and duration (months) of FMD and CBPP outbreaks from 2005-2010 were as shown in Tables 6 and 7 respectively.

There were more FMD outbreaks in Isingiro during the period under study (2005-2010). FMD outbreaks occurred twice in Nakasongola and once in Nakeseke in 2006 and the outbreak lasted for 3 months. While Rakai did not have any FMD and CBPP outbreaks during the period under study. Nakasongola was the district most affected by CBPP and it experienced four outbreaks within the period under study (2005-2010).

The potential annual number of cattle that can be sold in the study markets and representative total off-take per district when there was no FMD and CBPP outbreaks were as shown in Table 8.

These results were based on information before 2005 when there was no outbreak for Isingiro. The total percentage potential off-take of the total district herd was very significantly higher (P<0.001) for the inland districts (14%) than the border districts (4%). The cattle density rates per square kilometer of land area are 45, 68, 147 and 60 heads of cattle per square kilometer for Nakasongola, Rakai, Nakaseke and Isingiro respectively. Among inland districts, Nakaseke had significantly higher (P<0.001) offtake than Nakasongola. The annual potential revenue which could be earned from cattle markets without FMD and CBPP outbreaks from 2006-2010 was as shown in Table 9.

The inland districts would earn very highly significant income (p<0.001), 73%  of  grand total potential income earned by all study districts as compared to districts along international borders, with Nakaseke and Nakasongola having a potential of earning 39% and 34% of the grand total earned by all study districts respectively (Table 9). Revenue earned from cattle markets with FMD and CBPP outbreaks from 2006-2010 were as shown in Table 10.

Nakasongola experienced a reduction of livestock market revenue of 48% and Nakaseke livestock market revenue reduced by only 9%. While, Rakai did not experience outbreaks during the period understudy and hence did not lose livestock market revenue. Isingiro experienced FMD outbreaks throughout the period under study which represented 100% loss of cattle market revenue of 100%. Table 11 presents details of revenue lost during FMD and CBPP outbreaks from 2006-2010.

During the five year period under study, the districts along the international border incurred significantly less total income losses (P<0.001) of US Dollars $170,159 (47% of the grand total losses) as compared to $190,794 (53%) for the inland districts due to FMD/CBPP outbreaks. The relationship of income earned during FMD/CBPP outbreak and income lost were as shown in Figure 2. According to districts, the percentage losses incurred per district were as shown in Figure 3.

Figure 2. Relationship of total income (US Dollars) earned and lost due to FMD/CBPP outbreack from (2006-2010)

Figure 3. Percentage loss incurred due to FMD/CBPP outbreack during a 5 years period (2006-2010)

In a typical cattle slab in Nakasongola district, it was found that:

i)        Fifteen (15) head of cattle are slaughtered per week in the non-TAD outbreak periods.

ii)      Three (3) cattle are slaughtered per week during outbreak periods.

iii)    On average a kilogram of meat (beef) cost 7000/= during non-outbreak periods.

iv)     On average a kilogram of meat costs 1,500/= during outbreak periods.

v)      Other operational costs included the slaughter slab fee, butchery owner fee, transporter and local or parish chiefs.

vi)    Most of the costs like veterinary inspection, slaughter person and local government were paid an equivalent to the current price of 1kg of beef.

vii)  The gross margin earned by butcher owners per head of cattle computed as sum of gross earnings less costs incurred per head of cattle slaughtered.

The total income earned by each actor per month during outbreaks and non-outbreak periods in the meat processing chain were as shown in Table 12.

The total income earned by the actors per month at the processing level reduced to 95% during outbreaks i.e. from $21,929 earned during the non-outbreak periods to $1,120) during the outbreaks (Table 12).

Discussion

At farm level, FMD outbreaks caused significant financial losses due to salvage sale of cattle and loss from no or reduced milk sales during quarantine periods. In Isingiro, FMD caused significant losses due to salvage sale loss (Table 2). Bulls and cows were salvage sold at 83% and 88% less market value respectively; amounting to USD 196 for small cattle herd farms and USD 1553 for medium herd sized farms annually. However, no cattle were salvage sold in the large herds. This was because farmers with large herds could organize to sell their cattle to the traders or transporters directly from the farm during and soon after FMD outbreaks.

In Isingiro, FMD caused losses to cattle farmers due to no milk sales during periods when the cattle were clinically sick or reduced sales during the quarantine periods. Most milk losses (91%) were due to reduction of milk sales during quarantine period (Table 3). The farmers with large herds felt more impact of FMD due to loss of milk marketing opportunities caused by FMD during quarantine periods (Table 3).

From what has been observed (Tables 2 and 3), it is apparent that the poor farmers with small and medium herds were most affected by FMD outbreaks in Isingiro. They lost both from salvage sale of live cattle and loss due to reduced opportunity to sell milk during quarantine periods.

CBPP outbreaks confined to Nakasongola caused 10-20% milk sales reduction due to quarantine leading to loss on average of USD 105 to USD 209 (Table 4) for a six month quarantine period. No salvage losses were experienced due to CBPP outbreaks because animals could be sold when they were in a good condition.

Inland districts earned more income from cattle markets than the international border districts (Tables 9 and 10). This was due to the endemic state of FMD outbreaks in the Isingiro where due to quarantine imposed the cattle markets had been permanently closed throughout the study period. However, a situation could even occur when livestock markets at international border could be closed whenever FMD outbreak was reported on either side of the border. This was true if the outbreak was reported on the Tanzanian side. This was done to stop farmers and cattle traders from Tanzania from informally bringing their cattle for sale in the markets in Uganda. Hence farmers in international border districts suffered consequences of market closure due to these diseases more than the inland districts. While, in inland districts cattle markets were only closed whenever these diseases were reported in their areas.

The high income earned from the cattle markets could also be explained by large offtake rates reported along the inland districts (Table 8). For example, Nakaseke had a potential to sell highest number of cattle (31,200 heads of cattle) in their cattle market (equivalent to herd offtake of 19%) as compared to Nakasongola which sold 23,700 heads of cattle (equivalent to 11% herd offtake annually). This was in contrast to  border districts, with Rakai having a potential of selling 5% of their herds and Isingiro 4%) of their herds (Table 9). This showed that inland districts were keeping cattle for commercial purposes where border districts were keeping cattle more for subsistence functions.

Among inland districts, the higher off-take rate reported in Nakaseke than Nakasongola was attributed to the fact that the main market livestock market in Nakaseke (Ngoma) took place weekly (Table 5) as compared to the main livestock market in Nakasongola (Nakitoma) which took place on bi-weekly basis.

Cattle marketing losses due to FMD and CBPP outbreaks were higher in the inland districts than in the international border districts. This could be because inland districts sold higher volumes of cattle and had higher off-take rates than the international districts hence when markets were closed, they had to suffer more. Among the international border districts, Isingiro lost more cattle market revenues because the markets were closed for the whole 5 years of the retrospective study period as compared to Rakai which lost no revenue (Table 11 and Figures 2 and 3).

There was 31% in reduction in revenue from cattle markets in the study area during the study period 2006-2010, of which 52% of the losses were incurred in Nakasongola district mainly due to CBPP, 36% in Isingiro district due to FMD and 11% in Nakaseke due to FMD (Tables 9, 10 and 11). About 49% of losses (USD 223,216) were attributed to CBPP outbreaks in Nakasongola and 52% of losses (USD 244,215) was due FMD outbreaks in Isingiro (2006-2010), Nakaseke in 2007 and Nakasongola in 2010 (Tables 6 and 7).

Losses in Nakasongola were due to CBPP outbreaks with only one outbreak being shared with FMD in 2010 (Table 6 and 7). The only losses which occurred in Nakaseke were due to FMD in 2006. Meanwhile in Isingiro the losses due to TADS were due to FMD which occurred throughout the study period (2006-2010) and the quarantine period continued beyond the study.

However, CBPP outbreak last occurred in Isingiro in 2005 and it had not re-occurred since then. This seems to suggest that this disease could have been controlled in Isingiro. Rakai did not report outbreak for both FMD and CBPP during the period under study (Tables 6 and 7). The absence of the two diseases and particularly the absence of FMD in Rakai when the neighboring Isingiro district and bordering Tanzania districts experience FMD frequently can be explained by the presence of adequate and functional disease control infrastructure including quarantine stations and holding grounds that are lacking in Isingiro. Overall, FMD affected more districts and caused slightly more impact than CBPP (Table 6 and 7). This calls for active vaccination of cattle against FMD in all the study sites.

Among the local actors at the meat processing level at Nakasongola 90%-99% of revenue earned per actor was lost during FMD and CBPP outbreaks (Table 12). This meant that all the actors who solely depended on meat processing completely lost their means of livelihood during FMD and CBPP outbreaks.

Conclusion

• The study has shown that FMD and CBPP outbreaks caused marked financial losses during cattle marketing at the farmer, community and regional levels within inland and border districts as well as at the national level. The magnitude of financial losses estimated by this study provides a basis for justifying investments in the prevention and control of these TADs at all levels of the cattle marketing chain involving farmers, traders, processors, national and regional governments as well as the development partners.

  
  

• FMD and CBPP outbreaks caused even more impact on the cattle sector performance due to more losses incurred from reduced productivity, treatment and control costs. The government of Uganda should therefore invest more resources towards prevention and control of both FMD and CBPP. Vaccination against FMD should be done in all the study sites. Meanwhile priority of control against CBPP should be in the inland districts.

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Received 12 July 2014; Accepted 19 August 2014; Published 5 September 2014

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