November 29, 2007

UK's next bird flu outbreak may incur US$44 million losses

UK poultry farmers are estimated to lose as much as US$44 million in a major bird flu outbreak.

These foreseen losses are based on EU regulations on government compensation. The regulations show a significant gap between the compensation received for slaughtered birds and the amount a poultry farmer could have earned for each bird.

In response, leading insurance broker Aon, launched an insurance policy to bridge the gap between government compensation for birds slaughtered at an infected farm and the expected profit from the wholesale value of the poultry.

Poultry farmers are obliged to advise the government if they suspect that their stock is infected with bird flu.

The Department for Environment, Food and Rural Affairs will immediately order the farm to slaughter all poultry at the location, dispose of the dead birds and clean up the site.

The government will compensate farmers per bird but due to regulations, is restricted to reimburse the price of the chicken's market value on the day before slaughter.

With over 255 million birds in the UK, a widespread out break of avian flu could cost the industry over US$44 million according to the GB Poultry Register.