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February 10, 2007

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the nytimes had an op-ed relevant to the questions I was asking last flu thread about who pays for the culled animals:

Who Pays to Stop a Pandemic?

...The domestic bird population of Jakarta is estimated at 1.3 million. Thousands of families were given until Feb. 1 to consume, sell or kill their birds. Now inspectors are going door to door to destroy any remaining birds.

The Indonesian government pledged to pay about $1.50 for each bird infected with the H5N1 virus, a sum that may approximate the bird’s fair market value. But most birds that have been killed under this policy are healthy, so their owners, most reports suggest, will receive nothing.

Moreover, it is not clear how Jakarta’s poor will replace the income they once received from chickens and other birds... “Backyard birds” are the only source of income for many women and children.

The authors present the problem as a human rights and moral duty argument, but I see it from a very practical politics and communication point of view. If bird growers see their government as the enemy, they will not cooperate with anti-flu efforts or heed government warnings. More importantly, if they will be hurt economically they will not comply and, most dangerously, will not report outbreaks.

The authors suggest that wealthy nations simply contribute to a fund to compensate farmers in developing countries if their birds are culled.

Such a program in Jakarta alone would be expensive. Just to compensate families for their culled birds would require nearly $2 million, not including the cost of administering the program. [Maybe I have been reading Iraq news too much, but that does not sound expensive at all.] Indonesia’s domestic bird population countrywide is estimated at 300 million, so if the culling program were to be expanded beyond Jakarta, the total compensation cost could run as high as $450 million.

They say that the US, EU & others pledged (pledged?) $2 billion to a pool for bird flu prevention. $450 million would take a big chunk out of that, and I'm not sure that's the best way to go.

Instead, I would be very interested in seeing the development of government farm insurance proposals, whereby farmers pay a small premium to their governments for coverage and in exchange the government will pay out fair market value on any birds that are culled. The global funds could be used to underwrite the initial program. Assuming we can go a few years without entire countries being swept by the virus, eventually the premiums for this program may allow it to be sulf-sustaining. Most critically, it puts the right incentives on the right parties: it gives strong incentives to each country's government to take steps to prevent the entry and spread of bird flu nationally, as well as strong incentives to individual farmers to err on the side of caution in reporting possible outbreaks.

Is this economically reasonable? Is it being proposed anywhere?

it has been proposed for Africa by enterepeneurs along the Bill Gates philanthropy model, but i have not seen it proposed for/by governments in SE Asia.

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