Macroeconomic Effects of Disease Control in the Thailand Livestock Sector - A CGE Analyis

Increased demand for livestock products and the regime switch from import substitution to export orientated industrialisation has put pressure on the livestock sector in Thailand to expand production and exports. One of the constraints to expansion is the production and trade effects of diseases endemic to Thailand. The economic effects of livestock diseases and their control are reviewed. A change in the disease-free status of the Thailand livestock sector is investigated using a computable general equilibrium model. Three scenarios are hypothesised. In the first scenario, where disease control increases livestock production, resources shift out of manufacturing and into the agriculture and tertiary sectors leading to a decline in GDP and household welfare. In the second scenario, where control increases livestock exports, exports increase for all sectors and resources shift out of the agriculture and tertiary sectors and into manufacturing leading to an increase in GDP and household welfare. In the third scenario, where disease control increases livestock production productivity, there is a resultant decline in livestock output and exports as factor input prices rise. The flow-ons to the rest of the economy are negligible. The results show that disease control programs in the Thai livestock sector would not produce major benefits to the economy unless they were undertaken with a concurrent elimination of export restrictions.