Agriculture, Epidemic, and Policy

Published on Author Asher
Poultry farm in China

As alluded to by some previous blog contributors, H7N9 (a novel bird-flu strain) is spreading faster than the previously most-feared Avian flu (H5N9). Of course the disease is still not contactable from other humans, and contact with birds–usually chickens–is required for infection. Last month, the not-for-profit think-tank Institute for Agriculture and Trade Policy released a series of four academic reports on issues related to the rise of agriculture, changes in preferences, and food security. The reports, which I have linked to below, were about: the increased demand for meat as China’s middle class expands, the negative externalities associated with government subsidy of pork production, the horizontal and vertical integration of the dairy industry, and the externalities associated with the rise and conglomeration of the poultry industry, respectively.

There are some interesting paradoxes in China’s agricultural policy. China subsidizes agriculture and promotes vertical and horizontal integration of agricultural industries, while engaging in trade protection behavior–including levying high tariffs on agricultural imports and banning many agricultural products for reasons such as genetic modification. This is all while Chinese agricultural businesses demand these genetically modified strains, including by (as mentioned by previous posters) smuggling in patented seeds from the US and importing large quantities of pig semen from the UK. China’s financial assistance to the agricultural sector, downward pressure on costs, and changing consumer preferences have come with huge societal costs, similar to those experienced in the US. These include the aggravation of agricultural fertilizer and pesticide runoff, methane emissions, evolution of antibiotic-resistant bacteria and virus strains, water shortages, and decreasing food safety. The central government is not adequately taking into account these costs when pursuing aggressive subsidy of dairy produce and animal feed–but neither is the United States. Perhaps global treaties are needed, at least in terms of antibiotic use and subsidy of meat production, to effectively internalize these effects. The global nature of the agricultural industry means that the free-rider problem exists for any country considering reforms.

2 Responses to Agriculture, Epidemic, and Policy

  1. I see parallels between the problem with agriculture and environmental problems. The economy can greatly grow through the use of GMO’s, fertilizers, and tons of chemicals on food, as it can with greater pollution in the air. But the question to ask is when is the marginal cost to citizens health to great to justify some economic growth.

  2. In China the close proximity of fowl and feast (pigs!) is a breeding ground for new cross-species disease strains. However, the government got a real scare with SARS and local public health officials and their bosses no longer assume that covering up incidents is the best policy. In the background too is the development of labs that can tests samples from patients.
    Let’s not however forget animal diseases themselves: avian flu can wipe out an entire chicken flock in a day or two, when they’re tightly confined. That can cause big economic losses to farmers and their communities, and affect enough fowl to drive up consumer prices. Keeping diseases from spreading from farm to farm is the real challenge.