Economic

Impact of

Mycotoxins

by Alois Fellinger

Mykotoxin Seminarium

10 juni 2014, Göteborg

How to calculate

Economic Impact?

John M. Mantle: Benefits and costs of food safety regulation. Food Policy, 24, 605-623, 1999

Calculation Example

B = e · p · n(c · s · fs + v · d · fd)

B Benefit (measured in US$)

e effectivness of regulations for preventing incidents

p percentage of food-borne illness associated with food

n size of the population

c cost of illness (in US$)

v value of a statistical life

s, d observed frequencies of illness and death in population

fs, f

dexpansion factors for illness and death translating observed

data into estimated rates for the population

c(y,q,w,k,a,b,g) = vc(y,q,w,k,a) + qc(q,w,k,b) + fc(k, g)

c total costs

vc variable costs, joint in conventional production inputs and

some quality control inputs)

qc variable costs, non-joint in conventional inputs and certain

quality control inputs,

fc conventional fixed cost component independent of both

output and quality.

a,b,g parameters of the respective components of the cost

function

• handling, preparation, and storage

• loss of human and animal life

• health care and veterinary care costs

• loss of livestock production

• loss of forage crops and feeds

• regulatory costs

• research cost

• trade impact

• …

What to consider?

In short, it‘s about …

Flashlights

1-5Mio EURO

Loss of revenue in Turkey “X”

incident (UK, 1960s)

Mio EUROEstimated direct and indirect

losses 1998 in a wheat epidemic

in Hungary

Billion $Annual cost of mycotoxins in

Canada and United States

Mio EUROWorldwide impact on rejections to

“ready-to-eat” almonds, hazelnuts

and pistachios applying the EU limits

for aflatoxins (4 ppb) as calculated

2007 in a JECFA/WHO study

0,5 - 1,5Billion $

Estimated annual lost crop revenues and cost of research and

monitoring activities, in the United States to manage mycotoxic

fungi and the toxins they produce (not including secondary

industry and international trade losses

Data on the economic impact of

ochratoxin A in grapes and wine are

not available or are not in the public

domain because their release could

cause a collapse in the wine market,

which is a high value product but not

considered as essential

30-50Mio $

Annual cost for aflatoxin testing alone in the United States

17,7Mio $

USDA's Agricultural Research Service

(ARS) mycotoxin research program

(approx. 60 scientists) for year 2000

11,9Mio $

• $4.7 million for mycotoxin research by USDA's

Cooperative State Research Education and Extension

Service (CSREES),

• $5.1 million from US states at their land grant institutions,

and an additional,

• $2.1 million from other Federal agencies at these

institutions in year 2000

Economic Impact

per US-Citizen

Annual cost of mycotoxins

16,00 $

Reports of direct crop revenue losses due to mycotoxins.

Robens J. and Cardwell K.

“The Costs of Mycotoxin Management to the USA: Management of Aflatoxins in the United States”

Journal of Toxicology - TOXIN REVIEWS, 22, 2 & 3, 139–152, 2003

Crop Location/Year

avg. annual

production

(tons x 1000)

Toxinavg.

Contamination (%)

est. annual revenue

loss (US$ x 1000)

Cotton AZ, 1977-1999 397 Aflatoxin 55 4.367

(at $20/ton)

Cotton TX, 1999 502 Aflatoxin 70 7.000

(at $20/ton)

Peanut GA 25.000

Corn TX, 1999 (4 districts) 2.100 tons

(375 Bu)

Aflatoxin 50 15.000

(at $0,40/Bu)

Corn MS, 1998 1.400 tons

(50 Bu)

Aflatoxin 20 discounted,

4 abandoned

2.000

Walnuts CA, 2000-2001 236 Aflatoxin 4 38.700

Almonds CA, 1995-2001 366-830 Aflatoxin 3 23.000-47.000

Barley ND, SD, MN, 1993-1998 DON 406.000a

(5 years)

Wheat ND, SD, MN, 1993-1998 DON 1.000.000b

aDoes not include abandoned acreage.

bIncludes actual production losses.

„Let me give one example: the European regulation

on aflatoxins. A World Bank study has calculated that

this regulation costs Africa 670 million dollars each

year in exports of cereals, dried fruit and nuts. And

what does it achieve? It may possibly save the life of

one citizen of the European Union every two years.“

Kofi Annan - Statement on the Challenge of Eradicating Poverty

for Sustainable Development; Third United Nations Conference

on the Least Developed Countries, May 14, 2001

Relative to Codex*

Relative to the

pre-EU harmonization

(1998 trade)**

Loss in the value of

African Food exportsUS$ 670 000 000 US$ 340 000 000

Number of cancer

death saved2.3 persons 0.9 persons

The value of African food exports and human health

risk under the new EU harmonized standard relative to

those under the alternative regulatory scenarios

* 9ppb aflatoxin B1, calculated from Codex 15ppb aflatoxin total standard

** 4.8ppb aflatoxin B1

(average of 1998 individual EU countries aflatoxin regulations)

Otsuki T., Wilson J.S. and Sewadeh M.

“Saving two in a billion: quantifying the trade effect of European food safety standards on African exports”

Food Policy 26, 495-514, 2001

Otsuki T., Wilson J.S. and Sewadeh M.

“Saving two in a billion: quantifying the trade effect of European food safety standards on African exports”

Food Policy 26, 495-514, 2001

Trade flow of cereals and nuts

2 groups of countries

15 importing countries

Australia, Austria, Brazil, Canada, France, Germany, India, Israel, Italy, Japan, Malaysia, Nigeria, Spain, UK, USA

31 exporting countries

Argentina, Australia, Austria, Brazil, Canada, Denmark, Egypt, France, Germany, Hungary, India, Israel, Italy,

Kazakhstan, Mexico, Netherlands, Nigeria, Pakistan, Paraguay, Romania, Russia, Senegal, South Africa, Spain, Sri

Lanka, Tanzania, Thailand, Uruguay, USA, Vietnam, Zimbabwe

One possible Scenario

All importers follow a 2ppb afaltoxin limit vs. only EU at 2ppb, other importers at status-quo

Loss of 46,1% in trade (US$ 10,9 billion)

biggest loss: Argentina (US$ 2,6 billion, -67,4%), no country gains

Sector Impact of aflatoxin considered Parameter used in social cost estimation Maize

only

Grain sector Product spoilage effects Change in wastage rates and postharvest costs 70.9

Households Human health effects The cost of premature death due to aflatoxin-related primary

liver cancer

112.7

The cost of disability due to aflatoxin-related primary liver

cancer

63.8

Poultry Increased mortality rates and

reduced feed to weight

conversion

Reduction in the unit cost of production when the aflatoxin

content of feed is reduced

28.9

Hen eggs Increased mortality rates and

reduced feed to weight

conversion

Reduction in the unit cost of production when the aflatoxin

content of feed is reduced

6.6

Pig meat Increased mortality rates and

reduced feed to weight

conversion

Reduction in the unit cost of production when the aflatoxin

content of feed is reduced

36.2

Total 319.1

Estimate of the 1991 Annual Social Costs of Aflatoxins

in Indonesia, Philippines and Thailand (million $A; 1$A @ 1.5 EUR)

)

For peanuts the costs were a total of 158 million $A. The estimate does not include the costs from loss of foreign markets

Godfrey Lubulwa and Jeff Davis;

Inclusion of environmental and human health impacts in agricultural research evaluations:

Review and recent evaluations.

In: ICRISAT Workshop, Hyderabad, India, 1994

1 average herd size in Sweden: 300

2 1% change in mortality is worth 1.49 € a pig (not including labor or medication costs)

3 50g/day change in growth rate is worth 1,57 € per pig if pigs are sold at the same weight

4 0,1 change in FCR represents 2.09 € per pig (when average feed cost is 223.62 €/ton)

Mycotoxin [ppb] Impact [€/pig] [€/herd]1

DON 715 7.7 % Increased mortality 5,74 1.722 2

OTA & ZON 500 (OTA)

250 (ZON)

54 g decreased Daily Weight Gain 1,70 5103

ZON & DON 250 (ZON)

1000 (DON)

decrease 0,09 FCR 1,88 5644

Mycotoxins’ impact on swine performance

Mycotoxins represent an unavoidable risk

•

As they can not be avoided, they need to be managed

•

Mycotoxin management has a huge economic impact

•

Mycotoxins can cause enormous costs

•

The economic impact goes far beyond the commodities