00:00Dr. Claudia Hapkow is Associate Professor of Economics at SUNEF University in Madrid.
00:07The direct costs, the immediate costs right now are the deployment of over 100 military troops
00:13plus more than 300 Catalan regional officials who have been deployed to contain the outbreak,
00:22including drone surveillance, disinfection, animal removal, etc.
00:25So these are sort of the direct costs faced now by the government.
00:29But then we have further potential costs, including culling.
00:34So if the disease spreads from the wild boar, which is currently only affecting wild boar,
00:38to domestic farms, we are also facing the cost of killing.
00:42To put it sort of in perspective, Vietnam had an outbreak in 2019.
00:47They had to kill more than 3 million pigs, representing about 25% of their national pig population.
00:54Spain has 34.4 million pigs in 2024.
00:59Catalonia accounts for nearly half of that.
01:02So that's big.
01:04And imagine a similar scale as in Vietnam, killing about 25% of that stock.
01:09That would imply killing more than 8 million pigs.
01:12Furthermore, we have export revenues collapse.
01:15So several countries have already announced or introduced bans on imports from Spain.
01:23China has a partial ban, only from the region of Catalonia.
01:27Japan has a blanket ban.
01:28So these are, of course, economic costs that Spanish farmers face.
01:34And the timing could be worse because right now we have the Christmas season where demand is typically high.
01:39This is an industry worth billions of dollars a year.
01:44You've talked a little bit about it.
01:46But how can Spain keep its supply chains and its international markets open?
01:51So the first thing they have to do is demonstrate containment.
01:55So they must prove to the world that the outbreak is limited to wild boar in a specific area.
02:03And they have to deploy as many resources as possible to contain the spread.
02:08Now, it's very hard to contain because it's a disease that spreads very, very easily.
02:12Apart from that, in order to keep supply chains open, they need to push for regional agreements.
02:16So what we have right now, for instance, from Japan, this blanket ban on Spanish imports is very harmful because not all Spanish regions are affected.
02:27So by banning all of all imports from Spain, that affects, of course, those importing markets negatively, driving up prices there.
02:35What does this mean for prices?
02:37Because there are some estimates out there that the price of pork could soar 85 percent if this swine fever strain isn't contained in some of the ways that you mentioned.
02:49Yeah.
02:49So this is a plausible price effect, 85 percent.
02:54It's sort of a worst case scenario.
02:56So you have to there are two effects.
02:58Right.
02:58On the one hand, you have the import restrictions imposed by other countries.
03:02So that means locally here in Spain, we will have a negative demand shock, which would drive down prices, which is currently what Spanish farmers are worried about.
03:13Fear and misinformation about, you know, the impact on humans could also mean that people stay away from pork and they shift to chicken or beef, which would further drive down prices.
03:26But you're right. If farms are hit and the disease spreads, costing thousands or hundreds of thousands of domestic pigs lives, then that's a massive supply shock, which would then drive up prices substantially.
03:41And in the export markets like in China or Japan, that import a lot from Spain, that would now immediately the import ban means a drive rise for them.
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