Potential Economic Impacts of Foot-and-Mouth Disease in Brazil: A Case Study for Mato Grosso and Paraná

Brazil is one of the largest global suppliers of beef and pork and has faced challenges related to foot-and-mouth disease (FMD) in the livestock sector. FMD is one of the most important animal diseases in the world and has important consequences for Brazilian agricultural production and trade. Brazil initiated the suspension of FMD vaccination in 2020 and developed an emergency response plan to improve the country’s FMD status with the World Organization for Animal Health and expand international trade. This study investigates the economic effects of FMD by employing a regional, dynamic computable general equilibrium model in tandem with results from an epidemiological model to simulate an FMD outbreak in Brazil. Results show that outbreaks located in two Brazilian states, Paraná and Mato Grosso, negatively impact other states in Brazil in higher proportions than in the directly affected state in some cases, demonstrating a spillover effect of economic losses beyond the region directly affected by the disease. Also, results highlight the distributive effects of FMD outbreaks with most of the negative impacts falling predominantly on lower income workers and households. This study shows the importance of animal disease surveillance and control in Brazil and provides needed estimates of the potential economywide effects of an FMD outbreak in Brazil.