ECONOMIC IMPACT
ASSESSMENT:
Geelong Centre for Emerging
Infectious Diseases
PROJECT UNDERTAKEN FOR
The City of Greater Geelong
December 2012
Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
Economic Impact Assessment:
Geelong Centre for Emerging Infectious Diseases
This project has been conducted by REMPLAN
Project Team
Matthew Nichol
Principal Economist
Tony Moore
Principal Economist
December 2012
REMPLAN and the City of Greater Geelong hold all rights in relation to this document.
Reproduction or distribution of this document in part, or as a whole, requires the express
permission of either of these parties.
DISCLAIMER
All figures and data presented in this document are based on data sourced from the Australia Bureau of Statistics (ABS), and
other government agencies. The City of Greater Geelong City Council has provided all data in relation to infrastructure capital
expenditure required to establish the Geelong Centre for Emerging Infectious Diseases. Using ABS datasets, the regional
economic modelling software, REMPLAN, has been applied to generate industrial economic data estimates. This document is
provided in good faith with every effort made to provide accurate data and apply comprehensive knowledge. However,
REMPLAN does not guarantee the accuracy of data nor the conclusions drawn from this information. A decision to pursue any
suggestions mentioned in the report is wholly the responsibility of the party concerned. REMPLAN advises any party to
conduct detailed feasibility studies and seek professional advice before proceeding with any action and accept no
responsibility for the consequences of pursuing any of the findings or actions discussed in the document.
RESOURCES
All modelling has been undertaken using REMPLAN™ software that has been authored by
Principal Research Fellow (ret.), Ian Pinge, at La Trobe University Bendigo.
Contact us:
REMPLAN
PO BOX 5006
SANDHURST EAST,
BENDIGO, VIC 3550
TEL:
1300 737 443
Email: info@remplan.com.au
ii
Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
Executive Summary
The Geelong Centre for Emerging Infectious Diseases (GCEID) will provide research, diagnosis and risk
management advice in the increasingly important area of zoonotic diseases – diseases which are naturally
transmissible from animals to people. Zoonotic diseases can spread through a variety of means such as
working closely with livestock, household pets, exhibited animals or wildlife, by coming in contact with soil
or water contaminated by animals or by consuming un-pasteurised dairy products.
Zoonotic diseases have a particularly significant impact on rural populations, industries and economies.
Industry sectors at risk include dairy, poultry, pigs and other livestock and equine. These sectors make
valuable contributions to the economies of the G21 Region, Victoria and Australia.
Dairy – Employs 1,054 people in the G21 Region, 19,975 people in Victoria and 36,222 people across
Australia
Poultry - Employs 496 people in the G21 Region, 4,190 people in Victoria and 19,183 people across
Australia
Pigs and Other Livestock - Employs 1,394 people in the G21 Region, 24,513 people in Victoria and 131,081
people across Australia
Equine - The equine sector is diverse as it reflects the various horse related work, sport and recreational
activities across Australia. The sector also includes a myriad of retail, veterinary and related animal health
services, as well as equipment manufacturers. In the G21 region equine related industries are estimated to
support in excess of 188 jobs, in Victoria over 4,000 jobs, and across Australia over 13,000. A previous
study has estimated the value of equine related industries to the Australian economy at over $6 billion.
The global demand outlook for the dairy, poultry, and pigs and other livestock industries is positive and the
potential for growth significant is relation to current levels of output. Underpinning these projections are a
number of factors including:





Food production globally is estimated to need to double by 2050
World population is estimated to grow from 6.93 billion to around 9 billion in 2050
Improved prosperity and food consumption patterns means food demand will be equivalent to a
population of 11.5 billion people by 2050
The Asia region will make the greatest contribution to the projected population growth
Increased consumer awareness and concern about agriculture and where food comes from.
The potential threat posed by zoonotic diseases to these industries is also significant.
Avian Influenza - Following outbreaks in Asia 200 million chickens were slaughtered with an economic cost
estimated at AUD $10 billion. In ABARE’s 2006 report ‘Potential Economic Impact of a Pandemic on
Australia’ a finding was that a medium level outbreak of an avian influenza pandemic in Australia is
estimated to result in a 6.8 per cent reduction in Australia’s gross domestic product in the short term.
Economic activity in all states and territories is estimated to decline at rates close to the national level, with
Queensland incurring the most adverse short term effect — an estimated 7.1 per cent reduction in gross
state product.
Nipah - Approximately 1.1 million pigs were culled to contain a major outbreak of Nipah in pigs and
humans in Peninsular Malaysia between September 1998 and May 1999. Of 257 reported and attributed
iii
Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
human cases in Malaysia, 105 were fatal. The Nipah virus was found to be closely related to Hendra virus
that affects horses.
The outbreak had a devastating impact on the pig industry in Malaysia. Most of the fatalities were pig
industry people. Major economic costs were incurred in controlling the outbreak, in lost domestic and
export markets, and in allied businesses. The government paid US$35 million in compensation for the 1.1
million pigs destroyed. An estimated cost of US$136 million was spent in the control programme, tax
revenue estimated at US$105 million was lost. Approximately 618 homes and 111 shops, as well as schools
and banks, were evacuated in bringing the outbreak under control.
Prior to the outbreak, Malaysia had a standing pig population of 2.4 million. During the stamping out
operation an estimated 901,228 pigs from 896 farms were destroyed in the infected areas. The episode
caused a drastic change in the direction of the future of the pig industry in Malaysia. Pig farming is now
allowed only in “identified pig farming areas”, with farmers in other areas encouraged to undertake other
agricultural and livestock activities.”
The Geelong Centre for Emerging Infectious Diseases will perform vital roles in preventing and responding
to outbreaks of zoonotic diseases in Australia, and in protecting Australia’s important agricultural
industries, rural communities, transport and tourism industries.
A regional location for a centre dedicated to working with zoonotic diseases is therefore ideal. Geelong is
also home to Deakin University, Barwon Health, St John of God Geelong, and to the CSIRO’s Australian
Animal Health Laboratory (AAHL):




AAHL is crucial for Australia's capability to quickly diagnose exotic (foreign) and emerging animal
diseases – collectively known as emergency animal diseases
The laboratory's capacity to rapidly diagnose disease, combined with high quality research, makes
it a global leader in a wide range of animal and zoonotic diseases
AAHL is an accredited reference laboratory for a number of animal diseases including avian
influenza, Hendra virus and Nipah virus
AAHL employs 235 equivalent full-time staff in Geelong and is the largest facility of its type in
Australia in Australia by a considerable margin.
By utilising the existing research and capability platforms available at AAHL and connecting this with Deakin
University, Barwon Health, and St John of God Pathology, the Geelong Centre for Emerging Infectious
Diseases will provide research, diagnosis and risk management advice on diseases derived from animals,
such as Avian Flu, Swine Flu and the Hendra virus.
The research ecologists at Deakin University will make a vital and unique contribution to the GCEID. The
researchers have a focuses on understanding the processes that influence the distribution and abundance
of plants and animals. Some 60-70% of emerging infectious diseases come from wildlife.
Therefore, in addition to human and animal health specialists, the GCEID will bring to the table people such
as avian ecologists with their unique understanding of the reservoir of viruses that exist in our wildlife. The
combination of these institutions’ capacities and capabilities in a regional city with a rural interface is
unique.
In addition to the important strategic contributions that GCEID will deliver to the broader Australian
economy, the centre will support up to 44 jobs in the G21 Region during its construction. When
operational the centre will support a total of 63 direct and indirect local jobs.
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Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
Contents
DISCLAIMER ....................................................................................................................................... II
1
INTRODUCTION .................................................................................................................................. 1
1.1
PURPOSE AND AIM .................................................................................................................1
1.2
REGIONS .............................................................................................................................1
2
OVERVIEW - GEELONG CENTRE FOR EMERGING INFECTIOUS DISEASES ....................... 3
3
ECONOMIC ANALYSIS ........................................................................................................................ 4
3.1
3.1.1
3.1.2
3.1.3
3.1.4
THE CONSTRUCTION PHASE......................................................................................................4
OUTPUT – CONSTRUCTION PHASE, G21 REGION ..................................................................................4
EMPLOYMENT – CONSTRUCTION PHASE, G21 REGION ..........................................................................5
VALUE-ADDED – CONSTRUCTION PHASE, G21 REGION..........................................................................5
SUMMARY: CONSTRUCTION PHASE .....................................................................................................6
3.2
3.2.1
3.2.2
3.2.3
3.2.4
THE OPERATIONAL PHASE........................................................................................................7
OUTPUT – OPERATIONAL PHASE, G21 REGION.....................................................................................7
EMPLOYMENT – OPERATIONAL PHASE, G21 REGION.............................................................................7
VALUE-ADDED – OPERATIONAL PHASE, G21 REGION ............................................................................8
SUMMARY: OPERATIONAL PHASE .......................................................................................................9
4
AGRICULTURAL INDUSTRIES MOST AT RISK FROM ZOONOTIC DISEASES ................ 10
4.1
4.1.1
4.1.2
DAIRY ............................................................................................................................... 10
CURRENT ESTIMATES - DIARY ...........................................................................................................10
PROJECTIONS - DAIRY .....................................................................................................................10
4.2
4.2.1
4.2.2
4.2.3
POULTRY ........................................................................................................................... 11
CURRENT ESTIMATES - POULTRY.......................................................................................................11
TRENDS AND FORECASTS- POULTRY ..................................................................................................11
THREATS – POULTRY.......................................................................................................................12
4.3
4.3.1
4.3.2
PIGS AND OTHER LIVESTOCK INDUSTRIES ................................................................................... 13
TRENDS AND FORECASTS- PIG AND OTHER LIVESTOCK..........................................................................13
THREATS – PIGS AND OTHER LIVESTOCK ............................................................................................14
4.4
4.4.1
4.4.2
4.4.3
4.4.4
EQUINE ............................................................................................................................. 16
WORK ..........................................................................................................................................16
RECREATION..................................................................................................................................16
OTHERS ........................................................................................................................................16
THREATS – EQUINE ........................................................................................................................18
v
Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
1 Introduction
1.1
Purpose and aim
This report has been undertaken in response to a request by Greater Geelong City Council with respect
to the proposed Geelong Centre for Emerging Infectious Diseases. The specific purpose of the report is
to identify the potential direct and indirect economic impacts for the City of Greater Geelong regional
economy from the construction of infrastructure associated with Geelong Centre for Emerging
Infectious Diseases (GCEID). The economic impacts are detailed in terms of:
 Output / Revenue ($ M)
 Employment (Jobs)
 Value-added ($ M)
The analysis also assesses the operational benefits of GCEID for the local economy as well as the
contributions the GCEID would make to safeguarding agribusiness across Australia.
Economic analysis in this report was undertaken using REMPLAN – regional economic modelling and
analysis system1. This study applies REMPLAN economic data the G21 Region2, Victoria (State) and
Australia. These datasets incorporate base information data sourced from the ABS 2011 Census,
2008/2009 ABS National Input / Output Tables, and ABS Gross State Product (June 2012).
1.2
Regions
The impact analysis will be undertaken in the context of the following defined areas:
Figure 1-2-1 G21 Region
1
www.remplan.com.au
2
G21 Region is defined by the combined local government area boundaries of Greater Geelong (C), Golden Plains (S), Colac
Otway (S), Surf Coast (S) and Queenscliffe (B)
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Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
Figure 1-2-2 Victoria (State)
Figure 1-2-3 Australia
2
Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
2 Overview - Geelong Centre for Emerging Infectious Diseases
The Geelong Centre for Emerging Infectious Diseases (GCEID) will provide research, diagnosis and risk
management advice in the increasingly important area of zoonotic diseases.
A disease which is naturally transmissible from animals to people is classified as a zoonosis. More
than 200 zoonotic diseases have been identified involving all types of agents, bacteria, parasites,
viruses, prions, fungi and others. Zoonotic diseases can spread through a variety of means such as
working closely with livestock, household pets, exhibited animals or wildlife, by coming in contact
with soil or water contaminated by animals or by consuming un-pasteurised dairy products3.
Zoonotic diseases have a particularly significant impact on rural populations, industries and
economies. A regional location for a centre dedicated to working with zoonotic diseases is therefore
ideal. Geelong is also home to Deakin University, Barwon Health, St John of God Geelong, and to the
CSIRO’s Australian Animal Health Laboratory (AAHL):






AAHL plays a vital role in maintaining the health of Australia's animals, the international
competitiveness of Australian agriculture and trade, the well-being of Australians and the
quality of our environment
AAHL is crucial for Australia's capability to quickly diagnose exotic (foreign) and emerging
animal diseases – collectively known as emergency animal diseases
The laboratory's capacity to rapidly diagnose disease, combined with high quality research,
makes it a global leader in a wide range of animal and zoonotic diseases
AAHL includes a high containment facility and is one of the most sophisticated laboratories in
the world for the safe handling and containment of animal diseases
AAHL is an accredited reference laboratory for a number of animal diseases including avian
influenza, Hendra virus and Nipah virus
AAHL employs 235 equivalent full-time staff in Geelong and is the largest facility of its type in
Australia in Australia by a considerable margin.
By utilising the existing research and capability platforms available at AAHL and connecting this with
Deakin University, Barwon Health, and St John of God Pathology, the Geelong Centre for Emerging
Infectious Diseases can be established to provide research, diagnosis and risk management advice on
diseases derived from animals, such as Avian Flu, Swine Flu and the Hendra virus.
The research ecologists at Deakin University will make a vital and unique contribution to the GCEID.
The researchers have a focuses on understanding the processes that influence the distribution and
abundance of plants and animals. The researchers undertake a range of projects on the ecology of
individual species and assemblages, disturbance processes, the consequences of human land-use and
landscape change. Therefore, in addition to human and animal health specialists, the GCEID will bring
to the table people such as avian ecologists with their unique understanding of the reservoir of viruses
that exist in our wildlife. Some 60-70% of emerging infectious diseases come from wildlife4.
The combination of these institutions’ capacities and capabilities in a regional city with a rural
interface is unique. The GCEID will provide research and public health services protecting Australia’s
vital the equine, dairy, poultry, pigs and other livestock industries.
3
4
Department Agriculture, Fisheries and Forestry (QLD)
Professor Marcel Klassssen, Director, Centre for Integrative Ecology, Deakin University
3
Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
3 Economic Analysis
The economic impact assessment of the GCEID presented in this report relates to the construction of
infrastructure, the operation of the Centre, and importantly, identifies the current and projected
future economic value of the agricultural industries that the Centre will protect.
3.1
The Construction Phase
Geelong Centre for Emerging Infectious Diseases (GCEID) will be established at Geelong’s Kitchener House.
This will require a compete fit out of a whole floor. The budget for the capital works includes a
commitment of $2 million from Deakin University and a further $1 million from Barwon Health. The
partner contribution sought is $3 million, contributing to a total capital works provision of $6 million. The
capital works are expected to be undertaken within a construction phase of 12 to 15 months.
Source: Deakin University, Strategic Partnerships (Technology)
No Detail has been provided as to how this expenditure is likely to be distributed. Allowances will
need to be made to correctly model this expenditure. If part of the funding is for goods or services
purchased outside the G21 Region then the direct impact will need to be scaled back accordingly.
3.1.1 Output – Construction Phase, G21 Region
Assuming that the full $6m is going to be spent in the G21 region in construction it is then estimated
that the demand for intermediate goods and services would rise by a further $5.558 million. These
industrial effects include multiple rounds of flow-on effects, as servicing sectors increase their own
output and demand for local goods and services in response to the direct change to the economy.
The increases in direct and indirect output would typically support jobs in the local economy.
Corresponding to this change in employment would be an increase in the total of wages and salaries
paid to employees. A proportion of these wages and salaries are typically spent on consumption and a
proportion of this expenditure is captured in the G21 Region economy. The consumption effects under
this scenario are estimated at $2.385 million.
Figure 3-1 Construction Phase: Output Impacts
Total
$5.6 M
$6.0 M
$2.4 M
$13.9 M
Total output, including all direct, industrial and consumption effects is estimated to increase by up to
$13.943 million. This represents a Type 2 Output multiplier of 2.324, which implies that for every
dollar of project related expenditure, it is estimated that a further $1.32 worth of economic activity
will flow to the broader local economy once industrial and consumption effects are taken into
consideration.
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Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
3.1.2 Employment – Construction Phase, G21 Region
From a direct increase in construction sector output of $6.000 million it is estimated that 17 jobs
would be supported. From this direct stimulus to the economy, flow-on industrial effects in terms of
local purchases of goods and services are anticipated, and it is estimated that these indirect impacts
would generate a further 17 jobs.
The direct and indirect output and the corresponding jobs in the economy will support the payment of
wages and salaries to employees. A proportion of these wages and salaries are typically spent on
consumption and a proportion of this expenditure is captured in the local economy. The consumption
effects under this scenario are estimated to further boost employment by 10 jobs.
Figure 3-2 Construction Phase: Employment Impacts
Total
17 Jobs
17 Jobs
10 Jobs
44 Jobs
Total employment, including all direct, industrial and consumption effects is estimated at up to 44
jobs. This represents a Type 2 Employment multiplier of 2.588.
That is, for every 10 direct
construction jobs it is estimated that a further 15 to 16 jobs would be supported in the local economy
once flow-on industrial and consumption effects are taken into consideration.
3.1.3 Value-Added – Construction Phase, G21 Region
From a direct increase in output of $6.000 million the corresponding increase in direct value-added5 is
estimated at $1.761 million. From this direct expansion in the economy, flow-on industrial effects in
terms of local purchases of goods and services are anticipated, and it is estimated that these indirect
impacts would result in a further increase to value-added of $2.081 million.
The increase in direct and indirect output and the corresponding boost to jobs in the economy are
expected to result in an increase in the wages and salaries paid to employees. A proportion of these
wages and salaries are typically spent on consumption and a proportion of this expenditure is
captured in the local economy. The consumption effects under this scenario are expected to further
boost value-added by $1.238 million.
Figure 3-3 Construction Phase: Value-Added Impacts
5
Value-Added data represents the marginal economic value that is added by each industry sector in a defined
region. Value-Added can be calculated by subtracting local expenditure and expenditure on regional imports
from the output generated by an industry sector, or alternatively, by adding the Wages & Salaries paid to local
employees, the gross operating surplus and taxes on products and production. Value-Added by industry sector is
the major element in the calculation of Gross Regional Product.
5
Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
Total
$1.8 M
$1.2 M
$2.1 M
$5.1 M
Total value-added, including all direct, industrial and consumption effects is estimated to increase by
up to $5.080 million. This represents a Type 2 Value-added multiplier of 2.884.
3.1.4 Summary: Construction Phase
The flow-on effects associated with the construction of GCEID in terms of output, employment, and
value-added are summarised in Figure 3-4.
Figure 3-4 Economic Impact of Construction, G21 Region
Impact Summary
Direct
Effect
Output ($M)
Employment (Jobs)
Value-Added ($M)
$6.000
17
$1.761
Industrial Consump
Flow On tion Flow
Effect On Effect
$5.558
17
$2.081
$2.385
10
$1.238
Total
$13.943
44
$5.080
Type 1
Type 2
Multiplier Multiplier
$1.926
2.000
$2.181
$2.324
2.588
$2.884
Figure 3-5 Economic Impact of Construction, Victoria
Impact Summary
Direct
Effect
Output ($M)
Employment (Jobs)
Value-Added ($M)
$6.000
16
$1.774
Industrial Consump
Flow On tion Flow
Effect On Effect
$7.411
22
$2.900
$5.054
18
$2.501
Total
$18.465
56
$7.175
Type 1
Type 2
Multiplier Multiplier
$2.235
2.375
$2.635
$3.078
3.500
$4.044
The economic multipliers are higher for State relative to the G21 Region given the greater capacity at
this level to supply goods and services.
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Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
3.2
The Operational Phase
Currently there are 30 people working with GCEID. Once GCEID’s physical home at Kitchener House is
completed it is estimated that a further 30 new positions would be created.
Source: Deakin University, Strategic Partnerships (Technology)
3.2.1 Output – Operational Phase, G21 Region
The 30 scientific research sector jobs at GCEID are expected to correspond to a direct output of $7.564
million. From this direct stimulus to the G21 Region’s economy it is estimated that demand for local
intermediate goods and services would rise by $4.607 million. These industrial effects include multiple
rounds of flow-on effects, as servicing sectors increase their own output and demand for local goods
and services in response to the direct change to the economy.
The increases in direct and indirect output would support the payment of wages and salaries to
employees. A proportion of these wages and salaries are typically spent on consumption and a
proportion of this expenditure is captured in the local economy. The consumption effects under this
scenario are estimated at $3.662 million.
Figure 3-6 Operational Phase: Output Impact
Total
$7.8 M
$4.6 M
$3.7 M
$15.8 M
Total output, including all direct, industrial and consumption effects is estimated to increase by up to
$15.833 million. This represents a Type 2 Output multiplier of 2.093. That is, for every dollar direct
output it is estimated that a further $1.09 worth of economic activity will flow to the broader local
economy once industrial and consumption effects are taken into consideration.
3.2.2 Employment – Operational Phase, G21 Region
From the direct expansion in the economy of 30 jobs and $7.564 million in output, flow-on industrial
effects in terms of local purchases of goods and services are anticipated, and it is estimated that these
indirect impacts would result in the gain of a further 17 jobs.
The increase in direct and indirect output and jobs in the economy will support the payment of wages
and salaries to employees. A proportion of these wages and salaries are typically spent on
consumption and a proportion of this expenditure is captured in the local economy. The consumption
effects under this scenario are estimated to further boost employment by 16 jobs.
7
Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
Figure 3-7 Operational Phase: Employment Impact
Total
17 Jobs
30 Jobs
16 Jobs
63 Jobs
Total employment, including all direct, industrial and consumption effects is estimated to increase by
up to 63 jobs. This represents a Type 2 Employment multiplier of 2.100. That is, for every 10 direct
construction jobs it is estimated that a further 11 jobs would be supported in the local economy once
flow-on industrial and consumption effects are taken into consideration.
3.2.3 Value-Added – Operational Phase, G21 Region
From a direct increase in output of $7.564 million the corresponding increase in direct value-added is
estimated at $3.099 million. From this direct expansion in the economy, flow-on industrial effects in
terms of local purchases of goods and services are anticipated, and it is estimated that these indirect
impacts would result in a further increase to value-added of $1.975 million.
The increase in direct and indirect output and the corresponding boost to jobs in the economy are
expected to result in an increase in the wages and salaries paid to employees. A proportion of these
wages and salaries are typically spent on consumption and a proportion of this expenditure is
captured in the local economy. The consumption effects under this scenario are expected to further
boost value-added by $1.901 million.
Figure 3-8 Operational Phase: Value-Added Impact
Total
$3.1 M
$1.98 M
$1.9 M
$6.98 M
Total value-added, including all direct, industrial and consumption effects is estimated to increase by
up to $6.975 million. This represents a Type 2 Value-added multiplier of 2.251.
8
Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
3.2.4 Summary: Operational phase
The flow-on effects associated with the operation of GCEID in terms of output, employment, and
value-added are summarised below:
Figure 3-9 Economic Impact of Operation, G21 Region
Impact Summary
Direct
Effect
Output ($M)
Employment (Jobs)
Value-Added ($M)
$7.564
30
$3.099
Industrial Consump
Flow On tion Flow
Effect On Effect
$4.607
17
$1.975
$3.662
16
$1.901
Total
$15.833
63
$6.975
Type 1
Type 2
Multiplier Multiplier
$1.609
1.567
$1.637
$2.093
2.100
$2.251
Figure 3-10 Economic Impact of Operation, Victoria
Impact Summary
Direct
Effect
Output ($M)
Employment (Jobs)
Value-Added ($M)
$7.564
30
$3.099
Industrial Consump
Flow On tion Flow
Effect On Effect
$7.069
24
$3.077
9
$7.505
28
$3.713
Total
$22.138
82
$9.889
Type 1
Type 2
Multiplier Multiplier
$1.935
1.800
$1.993
$2.927
2.733
$3.191
Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
4 Agricultural Industries Most at Risk from Zoonotic Diseases
4.1
Dairy
4.1.1 Current Estimates - Diary
Across farm gate and down-stream processing, the dairy industry is estimated to employ 36,222
people across Australia.
Figure 4-1 Dairy Employment
G21
Region Victoria
New
South
Wales
Australian
South Western
Northern Capital
Other
Not
Queensland Australia Australia Tasmania Territory Territory Territories stated
Total
AUST
Dairy Cattle Farming
534
10,635
2,993
1,659
1,040
719
1,268
0
3
0
409
19,260
Dairy Product Manufacturing, nfd
Milk and Cream Processing
Ice Cream Manufacturing
Cheese and Other Dairy Product Manufacturing
15
14
345
146
418
1,453
1,004
6,465
132
685
225
1,584
52
1,135
251
421
28
235
85
393
65
295
48
356
25
111
6
738
0
63
4
3
4
31
0
9
0
0
0
0
11
32
5
70
750
4,054
1,973
10,185
TOTAL: 1,054
19,975
5,619
3,518
1,781
1,483
2,148
70
47
0
527
36,222
Source: ABS 2011 Census of Population and Housing
For every 100 direct jobs in dairy related industries it is estimated that a further 91 are supported in
the broader G21 Region once flow-on industrial and consumption effects are taken into consideration.
In relation to Victoria a 100 direct dairy jobs supports 151 indirect jobs, and across Australia, 158
indirect jobs. Therefore, the 36,222 dairy industry jobs across Australia is estimated to support a
further 57,230 indirect jobs6.
NB. Dairy industry direct employment for Australia in 2006 was 37,780 jobs.
4.1.2 Projections - Dairy
The data presented in figure 4-1 above highlights Victoria’s role as Australia’s largest dairy producer
and processor. It is estimated that 45 percent of Australia’s dairy production is exported, which
represents 12 percent of total global diary exports. This places Australia as the world’s fourth largest
diary exporter7.
Looking to future the trends and indicators appear to be very favourable for Australia dairy industry:





Food production globally is estimated to need to double by 2050
World population is estimated to grow from 6.93 billion to around 9 billion in 2050
Improved prosperity and food consumption patterns means food demand will be equivalent
to a population of 11.5 billion people by 2050
The Asia region will make the greatest contribution to the projected population growth
Increased consumer awareness and concern about agriculture and where their food comes
from (environment and animal welfare)
Source: Centre for the Study of Rural Australia, Presentation by Dennis O’Brien at Victorian Agribusiness Summit 2012
6
7
Source: REMPLAN economic models of the G21 Region, Victoria (State) and Australia economies
Source: Dairy Innovation Australia Ltd, Presentation by Mark Fink at Victorian Agribusiness Summit 2012
10
Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
The Australian dairy industry is well placed to serve to the Asian region, a region that is growing not
just in terms of population but also in relation to increasing consumer wealth and preferences for high
protein foods. The consumers in these markets are increasingly discerning and seeking products that
are ‘clean’ and ethically produced, and in which they can have confidence that the claimed attributes
are accurate.
4.2
Poultry
4.2.1 Current Estimates - Poultry
Across farm gate and down-stream processing, the poultry industry is estimated to employ 19,183
people across Australia
Figure 4-2 Poultry Employment
G21
Region
Victoria
New
South
Wales
Australian
South Western
Northern Capital
Other
Queensland Australia Australia Tasmania Territory Territory Territories
Poultry Farming, nfd
Poultry Farming (Meat)
Poultry Farming (Eggs)
74
70
92
433
358
737
297
634
863
337
323
534
100
219
156
114
200
213
25
11
42
0
5
0
0
0
28
Poultry Processing
260
2,662
5,209
2,415
1,675
691
188
11
TOTAL:
496
4,190
7,003
3,609
2,150
1,218
266
16
Not
stated
Total
AUST
0
0
0
19
14
28
1,399
1,834
2,693
0
0
146
13,257
28
0
207
19,183
Source: ABS 2011 Census of Population and Housing
For every 100 direct jobs in poultry related industries it is estimated that a further 84 are supported in
the broader G21 Region once flow-on industrial and consumption effects are taken into consideration.
In relation to Victoria a 100 poultry dairy jobs supports 186 indirect jobs, and across Australia, 199
indirect jobs. Therefore, the 19,183 poultry industry jobs across Australia is estimated to support a
further 38,174 indirect jobs8.
NB. Poultry industry direct employment for Australia in 2006 was 18,006 jobs.
4.2.2 Trends and Forecasts- Poultry
Poultry industry is of growing importance to global food production according to the Food and
Agriculture Organisation (FAO). From 1995 to 2005 it is estimated that world chicken meat production
increased by 53 percent, and eggs by 41 percent.
8
Source: REMPLAN economic models of the G21 Region, Victoria (State) and Australia economies
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Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
Figure 4-3 Poultry Production
Meat (million metric tons)
Eggs (million metric tons)
Country
1995
2005
Country
1995
2005
USA
11.5
15.9
China
17.1
24.3
China
6.1
10.2
USA
4.4
5.3
India
1.5
2.5
Brazil
4.1
8.7
Russian Fed.
1.4
2.1
World
42.8
59.7
World
47.0
71.8
(+53%)
(+41%)
According to the Australian Chicken Meat Federation chicken meat will comprise 39 percent of global
meat production by 2030; up from 35 percent in 2010 and 30 percent in 2000.
“Looking to the future, global food production needs to increase by more than 40 per cent by 2030
and 70 per cent by 2050 to meet the needs of an ever increasing global population (OECD-FAO,
2009).
The global demand for meat is estimated to increase by 44 per cent to over 400 million tonnes by
2030 to support the world’s growing population and its increased appetite for meat. Poultry’s growth
rate is expected to be the highest at 60 per cent, with poultry forecast to make up 39 per cent of
worldwide meat demand by 2030 and become the most consumed meat globally (Rabobank, 2011).”
Source: www.chicken.org.au/industryprofile/page.php?id=2_Global_Context
4.2.3 Threats – Poultry
At the 2012 Victorian Agribusiness Summit, Tim Doran of CSIRO’s Australian Animal Health Laboratory
(AAHL) highlighted the consistent and extensive outbreaks of Avian Influenza (H5N1). Following
outbreaks in Asia 200 million chickens were slaughtered with an economic cost estimated at AUD $10
billion. Current vaccines for H5N1 are not fully effective and there is a significant threat of zoonosis –
transfer to humans creating a flu pandemic.
In ABARE’s 2006 report ‘Potential Economic Impact of a Pandemic on Australia’ the following findings
were presented:


A medium level outbreak of an avian influenza pandemic in Australia is estimated to result in a
6.8 per cent reduction in Australia’s gross domestic product (relative to a reference case) in
the short term
Economic activity in all states and territories is estimated to decline at rates close to the
national level, with Queensland incurring the most adverse short term effect — an estimated
7.1 per cent reduction in gross state product
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Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases


4.3
Key sectors that are likely to be adversely affected the most include transport services and
tourism related activities. The expected increase in demand for health services in the event of
a pandemic is likely to lead to an expansion in such services across the country
Given the potential high costs to Australia and the global economy of an influenza pandemic,
there is a clear need to continue to focus on preventive measures through regional and
international collaboration. Prevention of an influenza pandemic is likely to be much more
effective than a cure.
Pigs and Other Livestock Industries
Across farm gate and down-stream processing, the pig and other livestock industries are estimated to
employ 131,081 people across Australia.
Figure 4-4 Pig and Other Livestock Industries Employment
G21
Region
Victoria
New
South
Wales
Pig Farming
Sheep, Beef Cattle and Grain Farming, nfd
Sheep Farming (Specialised)
Beef Cattle Farming (Specialised)
Beef Cattle Feedlots (Specialised)
Sheep-Beef Cattle Farming
Grain-Sheep or Grain-Beef Cattle Farming
55
9
405
424
6
99
162
498
113
5,021
7,669
29
2,339
4,456
557
606
6,698
13,232
158
4,877
7,865
634
94
684
16,052
335
883
2,054
443
76
2,563
1,784
6
1,247
4,600
211
67
2,212
2,965
13
528
6,813
30
0
1,014
1,227
12
476
129
0
0
6
1,080
0
5
3
7
0
26
31
0
25
3
Meat and Meat Product Manufacturing, nfd
Meat Processing
3
231
82
4,306
76
6,251
46
9,734
55
1,994
40
1,806
5
577
0
15
1,394
24,513
40,320
30,516
12,768
14,655
3,470
1,109
TOTAL:
Australia Other
Queensla South Western
Northern n Capital Territorie
nd
Australia Australia Tasmania Territory Territory
s
Not
stated
Total
AUST
0
0
0
0
0
0
0
27
22
503
811
3
166
367
0
4
0
0
15
326
2,462
987
19,132
45,275
562
10,645
26,452
0
322
25,244
96
0
2,240
131,081
Source: ABS 2011 Census of Population and Housing
For every 100 direct jobs in pigs and other livestock related industries it is estimated that a further 73
are supported in the broader G21 Region once flow-on industrial and consumption effects are taken
into consideration. In relation to Victoria, 100 pigs and other livestock jobs support 102 indirect jobs,
and across Australia, 117 indirect jobs. Therefore, the 131,081 pigs and other livestock jobs across
Australia is estimated to support a further 153,365 indirect jobs.
NB. Pigs and other livestock direct employment for Australia in 2006 was 143,173 jobs.
4.3.1 Trends and Forecasts- Pig and Other Livestock
The Australian Farm Institute projects the following increases in import demand (reference period
2007 – 2020)9 by a number of Australia’s key trading partners:
9
Keogh, M, “The implications for Australian agriculture of changing demand for animal protein in Asia”, Australia Farm
Institute
13
Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
Figure 4-5 Projected Meat Import Demand
The Institute places the projections above in the context of Australian production:
•
•
•
•
86% of Australia’s total beef production
260% of Australia’s total pork production
140% of Australia’s total chicken meat production
50% of Australia’s total dairy production
The projected import demand is a fraction of the overall increases in forecast consumption as
competition is expected to be fierce. A great deal of this competition for Australian exports is likely to
be domestic supply from within a number of the countries listed above.
4.3.2 Threats – Pigs and Other Livestock
“The emergence of Nipah virus in Malaysia
Approximately 1.1 million pigs were culled to contain a major outbreak of disease in pigs and
humans in Peninsular Malaysia between September 1998 and May 1999. Of 257 reported and
attributed human cases in Malaysia, 105 were fatal. The disease in pigs was highly contagious,
and characterized by acute fever with respiratory involvement and sometimes nervous signs in all
14
Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
age classes. The majority of human cases were employed in the pig industry and had a history of
direct contact with live pigs.
Preliminary analysis by the Center for Disease Control and Prevention (CDC) in Fort Collins and
Atlanta, USA, showed the primary causative agent in the outbreak to be a previously undescribed
virus of the family Paramyxoviridae. This and later investigations showed the new virus, named
Nipah virus, to be more closely related to Hendra virus than to other paramyxoviruses. Hendra
virus is a zoonotic virus first described in horses and humans in Australia in 1994 (Murray et al.
1995).
Epidemiological evidence suggested that during the outbreak, the primary means of spread
between farms and between regions was the movement of pigs. The primary mode of
transmission on pig farms was believed to be via the oro-nasal route. The epidemic is believed to
have started in the northern Malaysian State of Perak, from where ‘fire sales’ (panic selling in the
face of a disease outbreak) dispersed pigs across the country. Secondary modes of transmission
between farms within localized farming communities may have included roaming infected dogs
and cats, and sharing of boar semen.
The economic and social impacts of the outbreak
The outbreak had a devastating impact on the pig industry in Malaysia. Most of the 257 human
encephalitis cases and the 105 fatalities were pig industry people, and their loss is keenly felt by
all associated with the industry. Major economic costs have been incurred in controlling the
outbreak, in lost domestic and export markets, and in allied businesses.
The government paid US$35 million in compensation for the 1.1 million pigs destroyed at an
average price of US$32 per pig. An estimated cost of US$136 million was spent in the control
programme from the Department of Veterinary Services. Tax revenue estimated at US$105
million was lost from the pig industry. Approximately 618 homes and 111 shops, as well as
schools and banks, were evacuated in bringing the outbreak under control, causing great financial
loss to the families and business involved. In addition, the pig industry in Malaysia also provided
employment to farm workers and primary supporting services like drug and vaccine sales, feed
and transport. It was estimated that 36 000 people from this group had suffered from the loss of
employment due to closure of farms.
Prior to the outbreak, Malaysia had a standing pig population of 2.4 million. During the stamping
out operation an estimated 901,228 pigs from 896 farms were destroyed in the infected areas
between 28 February to 26 April 1999. A further 50 farms were culled under the national testing
and surveillance programme. In total, approximately 1.1 million pigs were destroyed which cost
about US$97 million, assuming that the average price per pig was US$95. Also, prior to the
epidemic, Malaysia had been exporting pigs to Singapore and Hong Kong. The loss of this export
trade meant a loss of about US$120 million in 1999, assuming average price per pig of US$120. In
addition, local pork consumption during the peak of the outbreak dropped by 80 percent and
farmers supplying this market suffered financial loss estimated to be about US$124 million during
the outbreak period alone.
15
Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
The episode caused a drastic change in the direction of the future of the pig industry in Malaysia.
Pig farming is now allowed only in “identified pig farming areas”, with farmers in other areas
encouraged to undertake other agricultural and livestock activities.”
Source: http://www.fao.org/docrep/005/AC449E/ac449e04.htm
4.4
Equine
The Australian equine sector is diverse as it reflects the various horse related work, sport and
recreational activities across Australia. These include:
4.4.1 Work
•
•
•
•
•
•
•
•
horses used for stock work
sport
horses used for racing: flat racing, jump racing, quarter horses
horses in rodeo: saddle bronc, bareback, barrel racing, roping, steer wrestling
pick-up riders
quarter horses: many disciplines, including cutting, reining, western pleasure
camp drafting
endurance riding
4.4.2 Recreation
•
•
•
•
•
•
•
•
•
•
trail riding
riding schools
riding for the disabled
riding with hounds (fox hunting)
show jumping
eventing
dressage
hacking
show horses
pony clubs
4.4.3 Others
•
•
•
trick riding
horses in film, TV, etc
horse breeding, spelling, training.
The equine sector also includes a myriad of retail, veterinary and related animal health services, as
well as equipment manufacturers. These equine related activities fall under broader industry sectors
within the Australian Bureau of Statistics Census and National Accounts datasets, making it difficult to
isolate and define the full scope of the equine industry from these sources.
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Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
In the 2007 study ‘Investigation of the equine area of the sector: Animals used for work, sport,
recreation and on display’, commissioned by the Department of Agriculture, Fisheries and Forestry the
following findings were presented regarding the economic contributions made by the equine sector:
“In economic terms, Dr Gordon (Gordon 2001) suggests that, in 2001, the horse industry might
have contributed more than $6.3 billion directly to the Australian economy. Much of the
industry functions with the use of volunteer labour. When the value of this labour is factored
into the equation, the ‘real’ value of the industry would be nearly $8 billion per year. Horse
racing and its associated activities, including the costs of caring for young horses, provide
about half the total economic contribution of the horse industry. Taxation alone on the labour
element of the horse industry could contribute $100 million to national revenue. The
Australian racing fact book (2004–05) reports that prize money alone in Australia was nearly
$362 million, the third highest offered internationally in those years. Wagering turnover on
thoroughbred, harness and greyhound racing in 2004–05 was valued at almost $18 billion. This
amount is not included in the value of the industry reported above. Although the turnover in
wagering on thoroughbreds and harness racing in Australia is about $18 000 million a year,
information provided suggests that this represents about 10% of the total value of the gaming
industry in Australia.”
While not capturing the full spectrum of equine related activities, the following data from the ABS
2011 Census does provide additional contemporary insights into the industry.
Figure 4-6 Equine Employment
G21
Region
Victoria
New
South
Wales
Australian
South Western
Northern Capital
Other
Queensland Australia Australia Tasmania Territory Territory Territories
Horse Farming
48
909
1,678
633
203
345
59
0
10
Horse and Dog Racing Activities, nfd
Horse & Dog Racing Admin & Track Op
Other Horse and Dog Racing Activities
0
39
101
21
1,037
2,097
22
511
1,949
0
343
1,137
0
52
452
14
212
702
4
13
143
0
50
30
TOTAL:
188
4,064
4,160
2,113
707
1,273
219
80
Not
stated
Total
AUST
0
32
3,917
0
9
56
0
0
0
0
29
64
61
2,295
6,731
75
0
125
13,004
Source: ABS 2011 Census of Population and Housing
For every 100 direct jobs in the selected equine related industries it is estimated that a further 66 are
supported in the broader G21 Region once flow-on industrial and consumption effects are taken into
consideration. In relation to Victoria, 100 equine related jobs in the selected sectors support 102
indirect jobs, and across Australia, 131 indirect jobs.
NB. Direct employment in the selected equine related industries for Australia in 2006 was 12,236
jobs.
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Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
4.4.4 Threats – Equine
How the CSIRO developed the Hendra Vaccine10:
“Today we are launching Equivac® HeV, the world’s first commercially available Hendra
vaccine for horses. This breakthrough is the culmination of a scientific journey that dates back
to the emergence of Hendra virus in 1994.
Although the Hendra virus “disappeared” for some ten years (with only one case reported in
1999) after it was discovered in 1994, it has recently been identified every year in Queensland
with serious consequences for the health of animals and people. For my colleagues and I
working at CSIRO’s Australian Animal Health Laboratory (AAHL), in Geelong, Victoria, and
overseas, these outbreaks added urgency to our research on the Hendra virus.
The initial flurry of work following the emergence of the virus led to Australian mainland flying
foxes being identified as the natural reservoir host of the virus. Research waned somewhat
towards the late 1990s, when a new virus – Nipah – emerged in Peninsular Malaysia. Nipah
virus was linked to outbreaks of fever and encephalitis in people, and with respiratory disease
in farmed pigs. Nipah was rapidly identified as being a close relative of the Hendra virus, and
there are distinct similarities between the two. They both have the ability to lead to fatal
infections in several species of animal, as well as in people. And they infect animal and human
cells in a similar way.
In collaboration with researchers of the Uniformed Services University of the Health Sciences,
Maryland, we generated, in vitro, one of the Hendra and Nipah virus proteins (sG) that’s
essential for infection and showed that antibodies to this protein can block virus replication.
These observations – that the G protein provoked a strong immune response in naturally
occurring Hendra and Nipah virus infections, and that development of antibodies to the G
protein was associated with virus clearance in infected people and animals – suggested a
vaccine based on the G protein antigen may be a feasible scientific goal.
The frequency of Hendra virus incidents after 2005, particularly the Redlands outbreak of 2008
and infections at Cawarral in 2009 in which two people died following contact with infected
animals, brought the desirability of a vaccine for horses more urgently into the frame.
All human infections with Hendra virus have occurred following exposure to infected horses
and direct contact with their bodily fluids. We believed vaccinating horses would provide an
opportunity to break the chain of virus transmission from flying foxes to horses, and then to
people.
Another benefit of a horse vaccine is that the horses themselves would be protected from a
devastating infection that would otherwise most likely lead to their death.
10
http://theconversation.edu.au/how-we-developed-the-hendra-virus-vaccine-for-horses-10429
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Economic Impact Assessment: Geelong Centre for Emerging Infectious Diseases
As part of the ongoing research into countermeasures against biological threats, we’d
developed the Hendra virus sG subunit vaccine with our US collaborators and tested it under
laboratory conditions. The vaccine was formulated for use with an adjuvant (a substance that
enhances the body’s immune response to an antigen) to enhance its efficacy.
Various forms of this preparation were evaluated in laboratory animals, where it was found to
protect them from developing disease following exposure to Nipah and Hendra viruses and to
prevent virus replication.
But a major hurdle to translation of this promising research into licensing for an equine
vaccine was the lack of a commercial partner. This was a problem because the equine market
is comparatively small, the infection problem largely confined to one state in Australia, and the
public health impact of the disease is relatively insignificant compared to other illnesses.
Then, in 2010, a child received post-exposure treatment against Hendra virus infection after
coming in close contact with an infected horse. This was closely followed by Queensland and
Federal government funding to support the preliminary testing of the equine Hendra virus
vaccine. This, in turn, acted as the catalyst for Pfizer Animal Health – our commercial partner –
to join the research team.
The sG Hendra virus vaccine was soon formulated with a proprietary adjuvant suitable for use
in horses. Early studies confirmed the development of immunity in vaccinated horses,
prevention of disease following exposure to the virus, as well as the absence of viral shedding.
This meant there was no risk of onward transmission to people or other susceptible animals.
In 2011, while this work was being undertaken, Australia witnessed an unprecedented spike in
the number of Hendra virus cases in horses, in both Queensland and New South Wales. A total
of 18 cases were identified. The first reported case of Hendra virus antibody detection in a dog
outside of an experimental setting was also seen that year.
Intergovernmental Hendra Virus Taskforce was formed as a result, and additional funding was
provided through the National Hendra Virus Research Program to ensure that the equine
Hendra virus vaccine project was able to progress as rapidly as possible.
Optimising the vaccine presented additional regulatory challenges, as did undertaking efficacy
studies in horses at the highest level of laboratory biocontainment. At times, progress seemed
frustratingly slow. But in reality, the availability of a vaccine to protect horses from Hendra
virus infection and, in turn, prevent the exposure of people to this disease, has been swift.
The Equivac® HeV vaccine is an important step towards breaking the transmission cycle of this
disease, and reducing its impact on the horse-owning community. But it’s important to ensure
that we continue to protect the health of our animals and people. And to do this, we need to
maintain and continue undertaking research and adding to the tools in our armoury of
weapons against the deadly Hendra virus.”
Authored by: Deborah Middleton, Senior Veterinary Pathologist at CSIRO
19