Poster presentation by Mohamadou Fadiga, Iheanacho Okike and Bernard Bett at the 28th triennial conference of the International Association of Agricultural Economists, Foz do Iguaçu, Brazil, 18-24 August 2012.

1. An Expost Economic Assessment of the Intervention against Highly
Pathogenic Avian Influenza in Nigeria
Mohamadou Fadiga, Iheanacho Okike, and Bernard Bett
International Livestock Research Institute, Old Naivasha Road, Kabete
P. O. Box 30709 – 00100, Nairobi, Kenya. Email: m.fadiga@cgiar.org
INTRODUCTION RISK ASSESSMENT AND SCENARIO DERIVATION DISTRIBUTION OF RISK PARAMETERS PROBABILISTIC AND BREAKEVEN ANALYSIS
• Nigeria’s poultry population is estimated at 160 million • Burn-out scenario whereby re-stocking was done 90 • Stochastic averages of risk of spread were estimated at
birds with the commercial sector accounting for 15%. days after culling and adequate biosecurity measures 0.2746 and 0.1663 under the endemic and burn-out
Poultry contributes 10% of agricultural GDP and 36% protected a large proportion of the newly introduced scenarios.
of total protein intake. birds from getting exposed to the virus. • Stochastic averages of mortality risk were estimated at
• Sector is vulnerable to trans-boundary animal diseases • Endemic scenario whereby re-stocking was done 0.0088 and 0.0174 for the low and high mortality risk
such as the highly pathogenic (H5N1) avian influenza routinely after 90 days but biosecurity measures were paths, respectively.
(HPAI) due to weak animal health infrastructure. inadequately implemented so that replacement stock
• Social and economic impacts of bird flu in Asia led the has an equal chance of being exposed to the disease as
Government of Nigeria to develop an emergency the indigenous poultry population, assuming a three-
preparedness plan against HPAI. day incubation period.
• Nigeria received a US$ 50 million loan from the World • Transmission coefficient was estimated at 0.02, mean
Bank to support its efforts to minimize the threats posed of duration of infectiousness at 49 days.
by H5N1, prepare against influenza pandemic, and • Deterministic risk of spread was estimated at 0.13 and
prevent further spread of HPAI. 0.27 for burn-out and endemic scenarios, respectively.
• The project was implemented from April 2006 to May • Mean proportions of poultry that died out of the total
2011 and US$ 41 million were disbursed. population at risk in 2006 and 2007 were derived using • There was 60% chance the cost of inaction would reach
data from States that had population at risk data and at least US$ 65 million and 90% chance that it would
RESEARCH OBJECTIVES estimated at 2% and 1% for 2006 and 2007, be greater than US$ 52 million.
• Develop counterfactual scenarios to measure the extent respectively. • There was more than 50% chance that the intervention
to which the intervention had minimized losses. would be economically justified under the endemic
scenario with high mortality path.
• Assess the economic justification of the intervention.
• A composite risk estimate at 0.006, which corresponds
• Determine the threshold composite risk level that would
to a mortality risk of 0.022 under the endemic scenario,
economically justify the investment. IMPACTS ON KEY OUTPUT VARIABLES
would be necessary to cause economic damage high
APPROACHES AND ISSUES • Number of birds that would be saved under the two enough to justify the intervention.
burn-out scenarios and the endemic scenario with low
• Develop a compartmental Susceptible-Infectious model CONCLUDING COMMENTS
mortality path would not be enough to economically
to derive HPAI risk of spread and risk of mortality and
justify the investment. • Intervention would be justified under the endemic
outline the counterfactual scenarios.
• Impacts on key output variables under the endemic scenario with high mortality risk; however, the potential
• Simulate the distribution of the risk parameters and
Scenario Risk Estimate scenario with high mortality path are presented. evolution to a pandemic would warrant the investment
estimate the costs of HPAI under the defined scenarios
regardless of the scenario.
for each draw of random risk parameters. Spread Mortality Spread Mortality Composite Increment
Cost of Cost Benefit
Variable al Net • Improvement of animal health infrastructure, stronger
• Derive the stochastic cost savings relative to the Burn-out Low 0.13 0.01 0.0013
Inaction Savings
Benefits
Cost Ratio
capacity of public health and veterinary services in
counterfactual scenarios, using data on poultry Stochastic
144.97 63.70 27.22 1.75 biosecurity protocols and communications, and
Burn-out High 0.13 0.02 0.0026 average
production, HPAI epidemiology, biosecurity cost, price,
Standard behavioral changes within the populace are positive
production cost, and loan disbursements. 115.99 115.99 115.99 3.18
Endemic Low 0.27 0.01 0.0027 deviation
impacts of the project not accounted in the calculations.
• Derive the stochastic averages and conduct a Minimum 52.66 -28.61 -65.10 0
Endemic High 0.27 0.02 0.0054 • Hence, from public health, economic and welfare
probabilistic analysis on key output variables, using a
Maximum 820.08 738.81 702.33 20.25 standpoints, an overall conclusion could be reached that
12% discount rate with 2006 as base year.
the intervention was useful.
Presented at the International Association of Agricultural Economists (IAAE) Triennial Conference, Foz do Iguaçu, Brazil, 18-24 August, 2012
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