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Preparing for a new GB strategy on bovine tuberculosis
ANNEX A
Draft partial regulatory impact assessment for short term measures to improve control of bovine TB
Purpose and intended effect of the measures
Objective
1. This Regulatory Impact Assessment relates to proposals in part two of the consultation. These aim to cut down the risk of further spread of bovine tuberculosis (TB) from high to low risk herds or areas in GB and to make improvements in the delivery of routine tuberculosis testing. Where regulation is necessary, these measures would be brought into force in Scotland by a revised Tuberculosis Order under the Animal Health Act 1981 and by similar orders in England and Wales.
2. Some of the measures envisaged would align us better with the requirements of the EC Directive 64/432/EEC on animal health problems affecting intra-Community trade in bovine animals and swine. The measures will directly affect cattle farmers, veterinarians and the State Veterinary Service.
Background
3. In the memorandum submitted to the Environment, Food and Rural Affairs Committee, Seventh Report of Session 2002/2003, entitled: "Badgers and Bovine TB", a number of policy options were set out which might be introduced in the short term to address the immediate problems of bovine TB. These "short term options" have been described more fully to stakeholder groups during 2003 and are the measures that call for the revision of the TB order to allow for implementation of the preferred options.
Risk assessment
4. We are dealing with a zoonotic disease, which under the present control strategy is increasing, at a rate of 18% per annum for new herd incidents and at 20% per annum for reactors culled, at a forecast cost to the Government of 71 million in 2003/04. The policy objective is to contain, re-establish control and to diminish the level of infection in the GB herd as rapidly as possible. Any useful early intervention will yield substantial benefits against the cost profile in future years.
5. The means by which this policy objective will be accomplished have varying degrees of uncertainty and therefore risk attached to them. In spite of the fact that there is a large body of published research and that further research has been commissioned we still do not have appropriate evidence, or tools to bring the disease under control. The proposals in part two of the document represent a small initiative under what, when revised, will be a much wider strategy, which takes a view on how to manage wildlife as well as the farming elements that contribute to the spread of TB.
6. We may be able to adequately control the risk to humans from TB as a zoonosis by present controls, but even this position might be challenged if there was a general spill over of the disease into wildlife and thence to commensal animals e.g. dogs and cats. Examined from any viewpoint there is both an increasing level of hazard, from more disease present and of risk, with more chance of coming into contact with the disease as prevalence increases.
Options
DO NOTHING
7. Doing nothing implies that we will be content and can finance the epidemic as it takes its course through time. The implications of this are that with the annual rate of increase in the disease we can continue and are willing to finance compensation costs and the associated disease management costs. In the next eight years, no action being taken the cost to the taxpayer may amount to over 1bn. Costs to industry will also rise in direct proportion to increasing TB levels.
Increasing the efficiency and transparency of TB surveillance and alignment with Directive 64/432/EEC
8. In the consultation document we give a detailed description of proposals designed to increase the efficiency of our TB surveillance. These are:
i. Adjustment of the GB TB tuberculin testing regime to meet the requirements of the Directive 64/432/EEC using Scotland as the testing basis and making transparent the risk assessments used locally to increase parish or herd testing frequencies above the EU minima.
ii. To optimise the effectiveness of routine surveillance by adjusting tuberculin testing frequencies of individual herds where necessary to ensure that equal numbers of herds are tested every year.
iii. To optimise routine surveillance by imposing movement restrictions immediately routine tuberculin tests become overdue.
iv. Continue to remove inconclusive reactors (IRs) at third rather than second tuberculin test.
v. To optimise surveillance by carrying out three tuberculin check tests at 12 monthly intervals on new and reformed cattle herds.
9. The options (1-4) form an integrated suite of surveillance measures. The intention is to optimise our surveillance effort, to remove any present irregularities and inconsistencies and make the process more transparent to farmers. There may be modest costs to farmers, who will have to bear the costs of gathering and holding their animals and lost opportunity time if some tests are brought forward to ensure that equal number of herds are tested every year. Using the whole of Scotland as the basis for the testing unit will mean that it is extremely unlikely that we shall increase normal testing frequency from 4 yearly.
10. There will be a cost to government in England and Wales where extra testing is seen to be necessary. But this cost is considered to be minor compared with the costs of the escalating disease and would probably be subsumed within it. Adjusting to the Directive 64/432/ EEC testing regime implies a minor cost increase from 5.07 to 5.21m per annum when the calculation is done as a desk based exercise. The present risk based increase in testing deployed by DVMs probably covers this extra element (i.e. these parishes are probably already being tested at the higher frequency due to their perceived risk) so we expect the effect upon budget to be neutral.
11. In relation to proposal five there would be a continued cost saving to Government of about 0.5m per annum by continuing the present regime. Thus if we were to adopt the Directive prescription for removing inconclusive reactors there will be an increased cost of compensation, without as far as we can tell any benefit from improved disease control.
Reduction OF THE risk of spreading TB from high to low incidence areas through the movements of undisclosed infected cattle and minimisation of risks due to cattle movements in general.
12. In the consultation document we give a detailed description of the proposal designed to reduce the risk of spread of TB from high to low incidence areas.
To pre- and post- movement test all cattle moving from 1 and 2 year testing herds to other herds
13. A total of six options were described in the consultation document:
i. Zoning - banning all cattle movements from areas of high TB incidence to areas of low TB incidence without some form of risk assessment and assurance testing.
ii. Pre-movement testing for all cattle moving from 1 and 2 year testing herds to other herds.
iii. Post movement testing for all cattle moving from 1 and 2 year testing herds moving to 3 and 4 year testing herds.
iv. Pre-movement testing for all cattle moving from 1 and 2 year testing herds and subsequent post movement testing at all 3 and 4 year testing receiving herds.
v. Full pre and post movement testing for all cattle sold for breeding and production regardless of herd of origin and destination.
vi. A pre movement testing system based upon herd TB history, cattle to be tested that come from herds that have experienced an outbreak in the past five years.
14. All the options described call for some degree of tuberculin testing of livestock being sold for breeding and production coming from farms of high-risk status and moving to farms of low risk status. It costs Government between 2 and 3.50 per head for routine TB testing delivered by LVIs. We have estimated that if LVIs were to deliver this service to farmers and recoup commercial costs, the charge to a farmer on a per head basis might vary between our top level (3.50) up to as much as 7 per head. This range is designed to capture situations where small numbers of animals might be tested at any one time. Thus for illustration a farmer selling 100 head of cattle over time and having to pay for pre-movement testing would have to pay between 350 and 700 to meet this requirement.
Impact of the proposed measure
15. As all of Scotland is a low-risk status there would be no direct impact of the pre- movement test on cattle farmers in Scotland. However, it is possible that farmers selling cattle from high-risk areas may seek to increase the price of their cattle in an attempt to recoup the additional cost of testing. A detailed study with farmers would be necessary to accurately assess how they would react to pre-movement testing, what cost minimising strategies they would employ and how their sales were distributed between ages and types of stock. There would be a cost to Scottish farmers who source cattle from 1 and 2 year testing areas as these cattle would need to be post- movement tested. A farmer buying 20 cattle from a "high risk" area would need to pay between 70 and 140 to cover the cost of TB testing.
Economic background
16. Over recent years farm incomes have been at historically depressed levels. However, market developments are expected to boost UK farm incomes substantially in 2003, driven mainly by the recent strengthening of the euro. The provisional estimate for Total Income from Farming in Scotland for 2003 shows a substantial rise of 34% (or 31% in real terms) over 2002.
17. The implementation of the recent CAP reform agreement will also be an important determiner of future incomes. Whilst the options on decoupling are subject to consultation, breaking the link between subsidies and production should help farmers to optimise their production, leading to economic benefits. However, this is very much subject to the precise nature of implementation the various discretionary options available to Member States and there will be variation in the positions for individual farms. The additional cost of pre-movement testing should also be seen in the context of other future regulatory impacts and charges that will impact on the future position of the industry.
18. The concept of an animal disease levy for exotic diseases has been discussed following on from FMD. Taking the view that Tb is the most serious endemic animal disease and predicted to get much worse before it gets better, then sharing the costs with industry might be better done under the umbrella of a general disease levy (both endemic and exotic). The Implementation Plan for the Outline Animal Health and Welfare Strategy (published on 12 December) announced that we are planning a consultation on the wider issues of cost sharing and the possible uses of a levy in the first half of 2004. In such a scenario there would surely be a demand from the subscribers that they be involved much more closely in the development and delivery of disease control policies.
Benefits of the measures
19. The benefit of pre and post movement testing and the purpose of the measure is to reduce the spread of disease from high to low incidence areas, so protecting three quarters of the national herd that live in low incidence areas. We have evidence from the export of cattle from Ireland and their subsequent import into Scotland of the effect of pre and post movement testing. Cattle from unrestricted herds in Ireland are tested prior to export and then re-tested at the appropriate time after import into Scotland. One in a thousand animals tested is revealed as a reactor. We note that the ecological environment of Scotland allows these outbreaks of disease to be successfully eradicated by conventional TB testing and slaughter of reactors.
20. The benefits stem from the hypothesis that some infection is spread to areas previously free from disease by the movement of cattle. This hypothesis is supported by recent work on the movement of spoligotypes, (different identifiable strains of TB), to different areas of the country post the FMD outbreak where re-stocking has taken place and by the import of cattle into Scotland.
21. It is then thought that these isolated incidents for some reason escalate to become hotspots and then become established and spreading concentrations of disease incidence. We can clearly identify this happening epidemiologically but we cannot explain, with appropriate proof, why. If the cause of spread is due to cattle and the subsequent escalation due to cattle to cattle transfer then large and costly areas of infection result. The Derbyshire/Staffordshire area of high incidence started off some 10 years ago as one or two isolated incidents and has since escalated to yield over 6000 reactors and a cost to Government and Industry of over 10m.
22. Thus if we can trap the 1 in a 1000 animals that is likely to spread disease we might be able to prevent new hotspots developing and their seemingly inevitable progression to areas of general disease. Thus the benefits are realised in the containment of the disease close to its present borders.
Uncertainties
23. The position in England and Wales is much more complicated compared to Scotland by a lack of evidence on the quantitative dynamics of the transmission of infection from cattle to cattle, against a background where wildlife are implicated. The present research programme includes a study of pathogenesis in cattle. The Randomised Badger Culling Trial will shed light on the contribution which badgers make to bovine TB.
24. The proposal also calls for the farmer as owner of the risk to pay for the measure.
25. Our preference for pre- and post- movement testing (Option (iv)) represents a pragmatic choice balancing risk, effect and delivery considerations against a background of uncertain evidence and scientific proof.
Measures to be introduced by amended legislation - changes to the TB Order.
26. We outline in the consultation document some small changes to the TB Order to remedy some minor deficiencies these are:
(i) introduction of a duty to notify the isolation of the organism M. bovis when found in a sample in a laboratory;
(ii) clarification of the Scotttish Minsiters' power to impose movement restrictions on herds where an official tuberculin test has not been carried out by the due date;
(iii) prohibition of the movement of a bovine animal between the first and second stages of an official tuberculin test; and
(iv) clarification of the role of the Scottish Ministers in relation to the use, and results of, any diagnostic test for TB.
27. None of these measures imply extra costs to farmer or Government unless in the case of failure to observe the requirements of (ii) lead to enforcement action when costs fall to both.
Equity and Fairness
28. The impact of measures to control disease fall most heavily on those who experience disease outbreaks in their herds. Routine TB surveillance testing is equitably distributed on the basis of perceived risk and of course the major costs are borne by Government. In promoting the case for pre and post movement testing we are setting forward a measure for which farmers would have to pay to ensure the protection against exporting disease to other farmers or to protect themselves from importing disease. The basis of the decision to impose these measures is one of risk management. There is no selection of individuals on any other criteria. Thus as far as we can determine the burden of disease control measures is shared as equitably as it can be. We would also maintain that farmers can do much more to cut down the risks that might lead to disease. However, the imposition of pre-movement controls might mean that the costs are being borne by the seller to the benefit of the purchaser. Arguably there might be a compensatory market value change that mitigates this cost. With post-movement testing the costs are borne by the purchaser for his or her own protection.
Small firms Impact Test
29. Most farms are small businesses and many will be affected by these measures. We intend to have full discussions with farmer audiences as part of the consultation. Undoubtedly pre movement testing will cause extra costs to these small businesses. Post movement testing if deployed would add further costs. However, for each case of disease prevented by the measures, using farmers' own estimates 36,000 will be saved per incident, not to mention the Government costs saved in managing a disease outbreak. The measures will be imposed upon some for the mutual benefit of all. Again the criteria used will be based entirely upon the risk these farms present to their peers or the risks attendant on purchased stock from a high-risk area.
Competition Filter Test
30. The only question in the Competition Filter Test that impacts on this RIA is the question of whether or not the regulation affects some farms more than others. The answer is yes, as those farms considered to be high risk have extra measures and costs applied to them. This might make them less competitive.
Enforcement and sanctions.
31. It is envisaged that the measures that might require enforcement are: pre and post movement testing. There are also some lesser items in the revised TB order, i.e. prohibition of sale of animals between day one and day two of the TB test, refusal to test and ensurance of regular testing (these latter three measures are those numbered ii, iii and v in Para 26 above).
32. The effective means of enforcement envisaged for pre and post movement testing is to apply a new movement restriction criterion to the herds at risk. Thus farmers would only be able to move and sell stock if the stock had been pre-movement tested and to test cattle acquired from high risk areas. It would become an offence to disobey these requirements and the other requirements of the TB order.
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