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FMD boon to farmers but bane to tourism: report

February 16, 2011

By Staff Reporter

By Andrew Bushe

DUBLIN — Last year’s foot-and-mouth crisis led to bigger profits for farmers but major losses for tourist businesses, most of them in rural areas, according to an economic study commissioned by the Irish government.

The study, by the INDECON consulting company, concluded that overall, the crisis cost the economy euro 210 million or about 0.2 percent of the Gross Domestic Product.

It said that if the disease had spread it could potentially have resulted in losses of between euro 1 billion and 5.6 billion and the loss of up to 12,000 jobs.

Agriculture Minister Joe Walsh said it was important that people who had been so successful in battling the spread of the disease should have an economic perspective on their efforts and sacrifices.

Walsh said the report underlined that the agricultural sector “owes a debt of gratitude to those in other areas of economic and social activity who made very tangible sacrifices” to stop the spread of the disease.

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“The study graphically illustrates the potential economic and social consequences had Ireland not taken appropriate action or had the measures put in place been ineffective,” Walsh said.

“Costs running into billions of euros, job losses perhaps in thousands and adverse effects which might endure for years — this would have been the consequences of failure.”

Ireland had only one confirmed case of the disease — the first since 1941 — which was discovered on March 22, 2001 on a farm in the Cooley Peninsular in County Louth.

The sheep involved had been purchased in Britain and smuggled via Northern Ireland to the Republic.

The crisis led to draconian action by the government, with virtually the whole country shut down for months to stop the spread of the disease.

Agri-business is a major export industry and accounts for earnings about euro 9 billion a year or about 10 percent of GDP.

Contrary to widespread belief, the report found that the crisis led to increased earnings for agriculture, which had been most at risk, estimated at euro 107 million.

Losses caused by closures of agricultural marts and restrictions on animal movement were offset by higher meat prices and increased exports to Britain and the rest of the EU.

The increased profits came from pork (up euro 9 million), lamb (up euro 23 million) and beef (up euro _30 million).

“Overall, the impact of FMD is believed to have increased the value of agrifood exports by euro 63 million and second round, or multiplier effect, would have added a further euro 44 million,” the report states.

The big loser was tourism. It was hit by the cancellation of sporting, business and cultural events, negative publicity surrounding animal culls and discouraging visitors from going to rural areas.

The consultants estimate tourism, mainly in rural areas, lost out on potential earnings of euro 210 million.

It says the government spent euro 107 million extra because of the crisis.

The Department of Agriculture spent euro 44 million on veterinary costs and culling, euro 13 million was spent on extra tourism promotion, and euro 50 million was spent on gardai and army deployment.

The study warns there will be continuing losses as a result of ongoing negative implications for tourism and outstanding compensation still to be paid out to farmers.

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