Weighing up cost of fortress farm policy

A cost benefit analysis of the potential impact of the foot-and-mouth crisis on the Republic should now be undertaken.

As the crisis appears to move out of control in the UK there are real questions to be asked about the impact of preventative measures on areas of the Irish economy compared with the potential cost of foot-and-mouth, particularly given the recent outbreak in France.

There is a question about whether many of the control measures actually take away any quantifiable risk or are merely symbolic actions - taken more for visual effect than to address any real need. The danger of this is that it could lead to a quick swing in public opinion if the controls were to stay in place over an extended period.

The idea of having a completely disease-free island has obvious attraction for Irish agriculture but there is a price to be paid. Do mats outside Dublin schools eliminate much risk of foot-and-mouth in rural areas? Is there a need to shut down sport and city parks? These measures should be put in context. Is it is possible to seal all borders with the UK?

The Tanaiste's Department of Enterprise, Trade and Employment is concerned about the impact of some of the measures on industry. It seems sensible to at least try and properly quantify the effects of the measures and their possible impact on our economic base, including tourism and sport.

There is a possibility that British public opinion is building against the mass destruction of animals. Tabloid newspapers this week carried photographs of lambs in fields juxtaposed with burning pyres.

The confirmation of cases in France changes the nature of the problem. According to Mr John O'Reilly of Davy Stockbrokers, this lessens the burden on Ireland making it more of an EU-wide problem. If it were to spread to Germany, it is possible that public reaction would be very against scenes of mass destruction and burning pyres, he notes.

Even without foot-and-mouth, Irish meat has been banned - along with Spanish, German and Danish products - from markets such as the US and Canada. Much depends on the extent of the outbreak in the UK and France.

Foot-and-mouth is endemic in many countries in Latin America, Asia and Africa. Yet the thousands of tourist who visit these countries have never brought the disease home. Indeed, the Tanaiste last year visited South Africa in a job recruitment drive. There was never any question that this would reintroduce foot-and-mouth to Ireland. Doing everything possible to eliminate all possible risks no matter how slight imposes very high costs. There should be some formal analysis about the trade off.

For example, there were 110,000 thousand people employed in hotels and restaurants at the end of November 2000 compared with 122,700 in agriculture, forestry and fishing. Of those in the latter group, however, only 13,900 were employed in the manufacture of meat and meat products, earning £197 million.

In the manufacture of dairy products, which is likely to be largely unaffected, there were 9,900 people employed earning £204 million. Overall, 29 per cent of people in the manufacture of food products, beverages and tobacco were in meat and they earned about 23 per cent of the total earned in the sector, according to CSO data.

This is a large part of the economy and vital to the individuals involved but is still smaller than say the manufacture of paper and paper products, which employed 23,400 people earning £503 million in 1999. It is also slightly smaller than the manufacture of basic metals and fabricated metal products, which employed 15,500 people earning £263 million in the same period.

In comparison, the total earnings and expenditure of visitors to the Republic in 1999 was £2.5 billion. In 2000, the estimated value of livestock and livestock products, apart from milk, is £1.8 billion.

There is a question of multipliers, as no industry operates in total isolation. But again CSO data implies that the multiplier in tourism is far greater than in agriculture. In other words, there are far more people outside the sector whose jobs and incomes rely on tourism than on agriculture.

There are also effects on sports, with some clubs already talking about cutting wages.

According to some experts there is an alternative. Mr O'Reilly, agribusiness analyst at Davy Stockbrokers, points out that the disease is curable and can be vaccinated against, albeit at a cost.

As a result a compromise is possible. Europe's politicians may say that vaccination will be brought in as a short-term measure while still striving for disease-free status.

If the disease continues to spread through Britain, the Government will have to face up to these hard questions. The spectre of widespread infection on the Continent also puts the question into context. If the disease is present in a number of European countries, it will become politically difficult to justify the ongoing sacrifice of the tourist and sporting industries, and indeed thousands of animals.