BSE economical effects in the Portuguese Meat Industry between 1996-2015

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BSE Economical Effects on the UK Meat Industry from 1996 to 2015
The outbreak of BSE (mad cow disease) in North America, mainly the USA, and some parts of Europe, previously prevalent in the UK, has been and continues to be a major concern to the economic output of the meat industry. First discovered in the UK in 1986, the meat industry took a further hit when follow-up studies showed that BSE contaminated meat can cause Creutzfeldt-Jakob Disease (CJD) in human consumers. Basic economics indicate that the dangers associated with the mad cow disease can affect the market by destabilizing the demand patterns. However, a general effect on the market dynamics is dependent on other factors such as the availability of substitute products and effects of imports. The agenda of this research is to analyze the stability of the UK meat industry amidst the BSE cases identified. This study will be accomplished through a brief literature section that scrutinizes the situation in other affected countries, before using available data to determine how UK has been affected.
Literature Coverage On Some Of The Affected Countries
In a research analysis by Ashworth and Mainland in 1995, the nine years of BSE in the UK were already impacting the economic output of the beef industry. Even though the EU had not yet slapped an export ban, some beef exporters had already blocked beef imports from Britain. The term ‘mad cow disease’ was discouraged for negatively profiling the consumable meat.

Links to CJD were still a mere speculation; thus, many consumers were not scared of eating non-contaminated products from BSE infected animals.
A study by Jin et al. covers the effects of BSE in America, Japan, and Europe in general. A first case discovered in Canada forced the US to close its borders for all beef products from the country. This is regardless of the fact that 83 percent of the meat products from Canada were headed into the US. This similar trend happened when the first cases were identified in both Japan and US. Their export markets were immediately frozen causing internal destabilization. Just like the UK’s scenario, the prices of beef cattle declined steeply while those of relatable beef products also fell. Consumers were enticed to move to substitute products such as chicken and pork, which saw their prices rise due to increased demand.
BSE in England
As the country where the disease was first discovered in 1986, Atkinson shows that the subsequent years that followed through to 1992 were the worst for England. Compared to other countries in the European region and worldwide generally, the country most hit is England. As such, it qualifies as the best case study on how the epidemic economically crippled the meat industry in the country.
Before 1996, the UK government was forced to intervene from as early as 1988. According to Atkinson, 1992 was the worst year when 36, 700 cases of BSE were confirmed. By 1995, the rate of BSE cases had dropped to 14, 300 with the only economic cost being the amount spent on effective disposal of contaminated carcasses. The discovery of a link between BSE and CJD marked the onset of economic turmoil in the English beef industry. The Severe economic impact was evident one month down the line. Immediately after announcing the discovery in March 1996, sales of beef products fell by 40 percent. By April 1996, the household consumption of meat decreased by 26 percent when compared to the previous year’s statistics. The price of beef cattle declined by 25 percent while the export markets were completely closed as the EU had banned all beef export products from the UK. Many abattoirs were forced to close down rendering their employees jobless. Based on the figures given by Atkinson, the annual economic cost after the CJD revelation was estimated to be £2.3 billion with a total of 130, 000 employees affected. However, as presented by the BBC analysis, further economic damage was prevented through the subsidies and compensations that were initiated by the conservative government. £1.5 billion as a compensation package was paid to farmers, abattoirs and related food businesses that were largely affected.
According to Beck et al., the UK had slaughtered 3.3 million animals by 2007 and economic losses suffered were estimated to be £3.7 billion. This can be largely accredited to the export ban from major buyer countries and decreased internal consumption of beef products. In an earlier study by Leeming and Turner in 2003, the evolution of prices saw the beef value decrease while that of red meat substitutes increased. The Demand for Lamb increased proportionally with its prices. Other products such as pork remained slightly unaffected, contrary to the earlier economic predictions. This similar opinion is also held by Chopra and Bessler, who indicate that lamb was the largest beneficiary in terms of demand and price increase.
By combining all these studies, it becomes evident that the UK beef export market was mostly affected. Major buyers from within and outside the EU region blocked beef products from the UK, and it is until recently that the bans have begun being lifted. The internal effect was decreased demand for beef products, low beef value and poor prices of beef cattle. As such, the industry crumbled with various abattoirs closing down. The close-down effect resulted into unemployment. However, the chip in by the government minimized the effects on the affected individuals. In general, the economic effects of the BSE epidemic were bad for the British meat industry. Future studies should, therefore, concentrate on extrapolating the rejuvenation of the beef industry in the UK after the worldwide export ban by EU was lifted.

Works Cited
Ashworth, S. W., and D. D. Mainland. “The economic impact of BSE on the UK beef industry.” Outlook on Agriculture (United Kingdom) (1995).
Atkinson, Nigel. “The Impact of BSE on the UK Economy.” 1st Symposium on Animal and Human TSEs, Buenos Aires: Instituto Interamericano de Cooperacion Para La Agricultura. 1999. http://www.veterinaria.org/revistas/vetenfinf/bse/14Atkinson.html Accessed 9 Dec 2016.
BBC. “BSE: The bill.” Web. August 1999. http://news.bbc.co.uk/2/hi/business/65061.stm. Accessed on 12 Dec 2016.
Beck, Matthias, Beth Kewell, and Darinka Asenova. “BSE crisis and food safety regulation: a comparison of the UK and Germany.” (2007).
Chopra, Aviral, and David A. Bessler. “Impact of BSE and FMD on Beef Industry in UK.” NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management, St. Louis, Missouri, April. 2005.
Jin, Hyun Joung, Anatoliy Skripnitchenko, and Won W. Koo. The effects of the BSE outbreak in the United States on the beef and cattle industry. Vol. 3. No. 4. Center for Agricultural Policy and Trade Studies, Department of Agribusiness and Applied Economics, North Dakota State University, 2004.
Leeming, John, and Paul Turner*. “The BSE crisis and the price of red meat in the UK.” Applied Economics 36.16 (2004): 1825-1829.