February 11, 2004

 

 

Indochina's Poor Hardest Hit By Bird Flu

 

As avian flu spreads across Asia, millions of rural families are being deprived of an important source of livelihood, plunging them deeper into poverty.

 

At the same time, the inability of the governments of these poorer economies to sufficiently compensate affected farmers could complicate their efforts to bring the disease under control.

 

More importantly, the disease could force governments to review the poultry industry, with a major overhaul in the way poultry is farmed likely.

 

So far, 11 governments - Cambodia, Indonesia, Japan, Pakistan, South Korea, Taiwan, Thailand, Vietnam, Laos, China, U.S. - have reported some strain of bird flu, including the deadly H5N1 strain.

 

On the face of it, the disease should have minimal impact on broad economic growth. The World Bank, for instance, estimates the impact on Vietnam's fast-growing gross domestic product at about 0.2 to 0.5 percentage point from the lost poultry trade and a marginal impact on tourism, provided the virus doesn't mutate to one that could be infectious among people.

 

Indeed, the World Bank and the International Monetary Fund still expect Vietnam's GDP growth to average 7% this year, matching last year's robust growth performance.

 

But the impact of the disease on the country's many rural households will be significant, said World Bank lead economist in Hanoi, Martin Rama.

 

80% Of Vietnam's Households Raise Chickens In Backyard

 

Jean-Pierre Verbiest, assistant chief economist of the Asian Development Bank, said "at least initially, the poorest will be hardest hit by the avian flu outbreak - particularly in rural areas."

 

"The poultry industry is a fairly labor-intensive industry, so a setback on poverty alleviation can be expected," Verbiest said.

 

Some 80% of Vietnam's 10 million households raise chickens in their backyards while about 97% of Thailand's 3.17 million poultry farms have fewer than 100 chickens each, according to the United Nations' Food and Agriculture Organization.

 

So far, culling has been adopted as the main effort to contain the spread of the disease, and more than 50 million chickens have been slaughtered region-wide. Compensation, however, falls short of the actual cost.

 

In Vietnam - which has been hardest hit with 57 of its 64 provinces affected, and where at least 19 people have been infected, 14 of whom have died - more than 27 million birds have been slaughtered. The Vietnam government has also banned the sale of all live poultry and poultry products nationwide but it has stopped the culling of birds that haven't been infected by the disease to minimize losses.

 

In neighboring Laos, cullings have taken place in 20 affected farms but the FAO has yet to declare the outbreak under control. The virus has also hit several small family farms around Phonm Penh in Cambodia.

 

Vietnam's government can compensate at best about 30% of total losses suffered by poultry farmers, according to an official at the country's Ministry of Agriculture & Rural Development. The government is offering 30 cents a bird, compared to an estimated cost of about $1 per bird but even these funds may not reach many farmers due to bureaucratic inefficiencies.

 

Even in wealthier Thailand, farmers will get 30 baht ($1=THB39.033) on average per bird and soft loans while it costs about THB50 to raise a chicken, according to major poultry producers.

 

Thai health officials have been alarmed by the agriculture ministry's rush to declare many previously infected areas as free of the virus in a bid to end the culling and reinvigorate sluggish domestic chicken meat and eggs consumption.

 

Farming Needs To Be Modernized

 

To alleviate pressure on these governments, the ADB has said that about $800,000 of grants made available to developing countries in the region for public health surveillance remain undisbursed and can be used immediately to assist in the fight against the disease.

 

It has also approved Vietnam's request to reallocate $6.17 million from an existing health sector loan, initially intended to help shore up the country's fight against SARS, to counteract the new health threat.

 

But the funds available fall way short of the mounting cost of the mass bird culling campaign.

 

How long governments will take to beat the avian flu is unclear, but one thing is sure - the disease will force governments to re-look the way farming is practiced now.

 

"The current crisis raises a major question on how poultry will be raised in the future," Hans Wagner, FAO's food safety expert in Thailand said. "Farmers will need to apply bio-security measures to avoid future animal disease outbreaks. This could mean that eventually poultry may need to be raised within industrial parks."

 

Wagner's concerns echo those of other health experts who have long worried that the proximity of people and animals in Asian farms and markets could facilitate the outbreak of a new influenza epidemic among people.

 

Such fears could lead to a significant overhaul of the poultry industry once it comes to restocking currently affected poultry farms, bringing the end of family-centered poultry production now prevalent in the region.

 

ADB's Verbiest doesn't rule out a downsizing of the industry, particularly in Thailand - a major poultry exporter until last year - which will have to regain importers' confidence amid allegations that the government initially covered up the outbreak.

 

He noted that it took the Netherlands, where bird flu was detected last year, more than three months to restock its farms after the chicken cull, while the industry never returned to its original size.

 

"It will probably take much longer in Asia," he said. "You can't restock until you're fully satisfied that things are under control, and that could result in further loss of income."