Introduction
Ghana has experienced relatively high growth in poultry production between 2000 and 2005, but the actual level of production remains at a low level, and as a result Ghana imports most of its poultry in order to meet domestic demand. Village poultry rearing is not the main occupation of rural farmers, although it provides substantial support to rural households (Aboe et al., Reference ABOE, BOA-AMPONSEM, OKANTAH, BUTLER, DORWARD and BRYANT2006). Based on the Ghana Living Standard Survey (GLSS) in 2005, about 32% of all sample households raise poultry. The largest proportion of poultry producers is found in the Upper East region (26%), followed by the Upper West region (22%), and then the Northern region (19%) (Tiongco, Reference TIONGCO2008a). It is estimated that 87% of the total poultry from these regions is rurally reared, of which 97% are traditional farms having less than 500 birds (Birol and Asare-Marfo Reference BIROL and ASARE-MARFO2008). The estimated poultry population for both the commercial and traditional poultry is 35 million (Ministry of Food and Agriculture, Reference MINISTRY OF FOOD AND AGRICULTURE2006), which is based on projections from the 1996 livestock survey data. This estimate is assumed to include the total numbers of poultry at risk of Highly Pathogenic Avian Influenza (HPAI) H5N1 infection, out of which 40,727 birds either died or were culled during the outbreaks of the disease in the country in 2007.
The scare and actual outbreaks of HPAI in Ghana are believed to have caused tremendous damage to the national economy. This paper assesses the direct or indirect costs of control measures implemented to mitigate the spread of HPAI in the poultry sector. These control measures include a ban on importation of poultry from infected countries, passive and active surveillance within the infected area and beyond, depopulation of infected birds, paid compensation to owners of destroyed animals (rates vary between 50% and 90% of the market price), decontamination of affected farms, border controls, and public awareness campaignFootnote 1.
Prior to the outbreaks, the Government of Ghana formed a National Avian Influenza Working Group that developed, together with Development Partners, the Avian Influenza Preparedness and response Plan for 2006-2009 (Government of Ghana, Reference GOVERNMENT OF GHANA2005). During the time of the HPAI scare in 2006, the Government of Ghana and its development partners spent at least US$2 million in cash and in kind to prevent the outbreak of the disease in the country (Ministry of Food and Agriculture, Reference MINISTRY OF FOOD AND AGRICULTURE2006).
Classification of Ghana's poultry production systems
Aning et al. (Reference ANING, TURKSON and ASUMING-BREMPONG2008) classifies poultry production in Ghana into 3 categories; large-scale commercial (or industrial); medium semi-commercial; and backyard. These categories are based on flock size, marketing system, and level of integration of its operations (Figure 1). Commercial poultry farms are dominated by layers and egg production, accounting for more than 95% of the country's total poultry production. Large-scale farms tend to have flock sizes of more than 10,000 birds, operate their own feed mill, and employ at least five permanent workers. Currently in Ghana, there are only five such farms. These are privately owned by individuals or families, and are mainly located in Ashanti and Greater Accra, where the commercial segment of the poultry industry (broilers and layers) is concentrated, as well as Brong-Ahafo. Except for some large-scale commercial farms, which are vertically integrated with hatchery, feed mill, production, processing, and marketing facilities, none of the poultry farms implement biosecurity measures comparable to FAO's sector 1 or 2 (Aning, Reference ANING2006).
Poultry structure in Ghana. Source: Aning et al. (Reference ANING, TURKSON and ASUMING-BREMPONG2008).
In addition to audio, video, and print media, a 24-hour hotline was set up in all ten regional capitals of the country to enable the public to promptly report any suspicions of AI to staff of the Veterinary Services Division (VSD). Other control measures included movement restriction of birds into, out and within Tema, Sunyani and Aflao infected zones during the outbreaks period in 2007; live birds market closure within the infected zones during the time of response and containment operations; biosecurity training for 921 farmers and other stakeholders on biosecurity practices on small and large scale commercial farmers, and live bird markets between March and December 2007.
Medium semi-commercial poultry farmers have a flock size of between 1,000 and 5,000 birds. They rely on large-scale integrated farms for their day-old chicks and feed, but also obtain feed from other sources. By definition, the medium and small-scale commercial poultry operations in Ghana fall under FAO's Sector 3 with a low level of biosecurity. Birds are kept mainly indoors, on deep litter or in battery cages. Semi-commercial, small-scale farms typically keep less than 500 birds. This system mainly comprises of traditional village poultry (chickens, guinea fowls, ducks, turkeys, doves) raised mainly to supplement incomes, for meat, and rarely for eggs (Aboe et al., Reference ABOE, BOA-AMPONSEM, OKANTAH, BUTLER, DORWARD and BRYANT2006). Backyard or village poultry farms are characterized by a low-input of feeding and housing, which makes it an important supplement to household income. Birds are mostly free-range, but are given supplementary feed and caged at night. This system falls under FAO's Sector 4 with very minimal biosecurity.
Data and methodology used
Focus group discussions and personal interviews, using semi-structured questionnaires, were conducted with key players of the poultry industry including poultry farmers, feed millers, hatcheries, veterinary drug companies, maize farmers, live bird markets, whole sale egg dealers and feed millers. Secondary data on the importation of day-old chicks and poultry products were collected from the Veterinary Service Directorate. Email questionnaires were sent to Oxfam, Ghana in Tamale and the extension agent of the Greater Accra Regional Directorate of the Ministry of Food and Agriculture. A group discussion was held for 19 poultry farmers at Dormaa Ahenkro and five personal interviews conducted for farmers in the Sunyani Metropolitan Area, where the third outbreak took place.
A group discussion was held with 20 live bird dealers in Kumasi Central market. Personal interviews were conducted with importers of veterinary drugs, DOC and feed ingredients in Ashaiman and Accra respectively. Personal visits were made to some large commercial farms and their managers were interviewed. An additional visit was made to a major feed company in the country located in Kumasi and both questionnaires were administered as well as carrying personal interview with the managing director.
Data on costs and expenditures of disinfectants and other costs associated with the control of the disease was calculated from the responses of 29 poultry farmers interviewed. VSD staff time spent in the prevention, control and eradication of AI was estimated using the number of director and deputy directors of VSD, the number of veterinary officers and veterinary technicians and the percentage of their time that was spent on control measures. Price data on eggs, maize, cockerels, layers, broilers, guinea fowl and other bird species before and after the outbreak (2006-2007) of HPAI H5N1 was also collected.
Following Bennett (Reference BENNETT2003), we defined ‘C’ as the direct costs associated with HPAI prevention and control measures, where C = (L + R) + P, where ‘L’ is the value of the loss in expected output (production loss due to fall in stock) due to the presence of HPAI; ‘R’ is the value of losses due to fall in domestic prices and demand, and ‘P’ is the cost of HPAI prevention measures (such as cost of vaccine to control the disease, cost of disinfectant, foot bath, and other related costs to improve biosecurity) (Tiongco Reference TIONGCO2008b) . In estimating C, information on the incidence of AI infection in the poultry population at risk and its effect on production was needed. It is also important to note that the magnitude of L depends on the nature and extent of the physical effects of preventive and control measures. Economic losses have included not only farmers affected but also upstream and downstream sectors such as hatcheries, maize farmers, traders and feed millers.
Benefits, ‘B’, can be expressed as the summation of the avoided losses of the expected output and the decrease in the cost of prevention ‘P’ (Tiongco Reference TIONGCO2008b). Net benefit is the difference between direct disease costs (C) and benefits (B).
Outbreaks of HPAI H5N1
Three outbreaks of HPAI H5N1 were reported in Ghana. The dates, locations and geo-references of the outbreak areas, and the number of birds that died and were depopulated are indicated in Table 1. The first outbreak of HPAI in the country was in Tema Metropolitan Area (TMA). Poultry farms in the TMA use modern intensive poultry production systems. TMA is where large scale intensive and industrial commercial farms are highly concentrated. Tema has high concentration of local hatcheries and poultry consumers. It is the port of entry for most poultry imports, feed ingredients, poultry meat and other poultry products. It is 25km from Accra, the Ghanan capital, and has border routes to Togo and Cote D'Ivoire. The largest feed mill in the country and exporter of poultry feed to some West African countries is located in Tema. These local characteristics pose high risks of introduction of HPAI to Tema's poultry industry. A total of 23,327 birds were culled from six farms located in the outbreak zones of Tema-Kakasunanka and Adjei Kojo using mechanic and lethal methods, and from six more farms located within 3 km radius of the infected zoneFootnote 2. A similar depopulation was carried out in Sunyani (2,672 birds were culled) and Aflao (1,357 birds were culled), where the second and third outbreak occurred. The majority of bird species affected during these outbreaks of HPAI H5N1 were layers, broilers, turkeys, and ducks. Some large scale commercial poultry farms located in the infected zone in Tema were not infected with HPAI (such as Sydals Farm Ltd) due to their high level of biosecurity (Quartey, Reference QUARTEY2008, personal communication).
Locations of HPAI outbreaks in Ghana and number of birds that died or culled in the infected zones.
Source: Koney, Reference KONEY2007
Prevention and control measures
When HPAI was confirmed for the first time on the African continent in Nigeria, the VSD in Ghana intensified its active and passive surveillance throughout the country. The VSD monitored the movement and trade of live birds along its borders with Burkina Faso and Côte D'Ivoire. Bird dealers who violated control measures had their birds destroyed without compensation. Other control measures to prevent the introduction of HPAI were implemented such as ban on importation of poultry products from infected countries, border post regulations, and public awareness campaign. A communication hotline was set up via phone in all of the ten regional capitals of the country to enable the public promptly report any suspicion of HPAI to staff of VSD.
During the initial outbreak in April 2007, culling was used to prevent the spread of HPAI. Farmers were paid compensation for depopulated flocks at the rate of 50% to 90% of the market value for eggs and live birds (Veterinary Services Directorate, Reference VETERINARY SERVICES DIRECTORATE2008). Further, training on biosecurity measures, such as isolation of newly sick animals, restricting movement of animals, people and equipment, cleaning/disinfection procedures, and keeping birds in closed housing to prevent exposure of poultry to wild birds, were provided to 921 farmers from both small and large scale commercial farms, and in live bird markets between March 2007 and December 2007.
Costs of HPAI prevention and control measures
Prevention and control costs of animal diseases are incurred by measures undertaken ex-ante and ex-post in response to an anticipated disease outbreak. In the case of Ghana, the total costs of AI prevention and control measures were estimated at US$ 4,304,350. The breakdown of costs is shown in Table 2. Based on survey results, the estimated costs for strengthening biosecurity measures to avoid the introduction of H5N1 virus incurred by sectors 3 and 4 poultry farms amounted to US$$1.1 million. About US$160,000 was spent for compensation for 27,356 culled birds. Compensation for parent stock was paid at the rate of 90% of the market prices, for commercial stock at 70% to 85% of market prices, table eggs at 50% of market prices, and hatching at 60% of market prices (Government of Ghana, Reference GOVERNMENT OF GHANA2007). No compensation was given for those birds that died naturally.
Costs of control measures against HPAI H5N1 in the country, 2006-2007.
Production and revenue losses due to HPAI outbreaks
The value of production losses by poultry farms and other stakeholders in the poultry industry that were affected with HPAI were estimated based on calculations from prices of poultry products before and after HPAI outbreaks (between 2006 and 2007) in Ghana. The economic losses for each sector in the poultry industry are summarized in Table 3.
The total production loss for farms whose birds died naturally was valued at US$130,000, based on 13,371 birds located in Tema, Sunyani, and Aflao. Income losses due to reduction in flocks was around 39%.
Economic losses due to HPAI for specific areas of the poultry industry, 2006.
The total revenue loss of eggs due to the imposed ban on sale of eggs from April to July 2007 was estimated at US$2.6 million. This output loss of eggs was based on 31 poultry farms in Tema, with bird populations ranging from 1,000 to 130,000 birds and producing an average of 1,262,296 eggs per farm per month. In addition to the ban on egg sales, consumer demand for eggs also declined by 64%. Market sales losses for egg wholesalers due to AI outbreaks and scare in 2006 and 2007 were estimated at US$396,345, which accounted for 85% of total revenue. Such losses were due to complete destruction of eggs at wholesale stores, railway stations, and a decrease in egg marketable value by 6-7% per crate on average (Table 4). Revenue losses for egg and poultry meat retailers combined accounted for 85%. Income losses of poultry meat alone were calculated at 48,872 kg, valued at US$135,918. The cost of restocking of layers was valued at US$195,287, which was based on 40,727 layers that died and/or were culled and an estimated production cost of raising day-old chicks to point of lay equal to US$4.80 per bird.
Price reduction of eggs before and after Avian Influenza 2006 and 2007.
Source: Egg Whole sellers at Kumasi, January 2008; 1 US$= 0.96 GH⊄
Poultry producers had to devise strategies to be able to cope with the challenging situation caused by the AI outbreaks. I order to stay in business, they had to reduce the wholesale price of eggs between 28% and 64% per crate of 30 eggs, boil eggs in bulk before selling, accept credit from egg dealers and consumers, extend payment period for three weeks, or destroy eggs that became rotten. In the case of live bird market dealers, revenue losses due to the risk of HPAI in Ghana amounted to US$364,000. Consumers did not buy stock that fowl sellers had to sell in the live birds markets, and consequently many of the birds died from inadequate feeding since the fowl dealers had to buy feed to sustain them. Besides this, the sizes of the cages at the live birds markets were not suitable for the birds to stay for such a long time. The price of eggs per crate in the Accra Christmas Bazaar market increased by 66% in 2007 compared to 2006, while price for spent layer increased by 25% for the same period (Table 5). These increases in prices were thought to indicate recovery of the poultry industry.
Average market prices of live birds and eggs at Christmas Bazaar-MOFA, Accra.
Source: Ministry of Food and Agriculture, Reference MINISTRY OF FOOD AND AGRICULTURE2008
HPAI affected maize farmers, as the poultry industry uses 30% of local maize production in feed. With the threat of HPAI in 2006 and outbreaks of the disease in 2007, maize price dropped by 37% on average (from US$33.6 per 100 kg to US$30.9 per 100 kg). Assuming that 30% of the maize produced was not sold as a result of AI outbreaks, the losses to maize farmers due to the reduction in price (by 36.6%) was estimated at US$664 million (using a farm gate price of US$33.6 per 100 kg).
In the case of feed millers, the revenue losses realized from sale of feed after the outbreaks of HPAI was about 50% of total revenue realized before the outbreak. The drop was due to a shortfall in sales as poultry producers reduced their stock, and, as a result, feed production declined by 8% (compared to its production in 2005). As poultry production recovered to normal levels in 2007, feed production increased by 43%.
The veterinary drug companies incurred losses due to HPAI through reduction of sales by up to 30% of total sales when there was no outbreak, difficulty in selling drugs (which expired on the shelves) and that poultry farmers were unable to make timely payments for drugs they purchased. Local hatcheries suffered economic losses due to price reduction of DOCs by about 13%, compared to 2006 average. This price reduction resulted in a marked drop in quantities supplied (approximately down by 26%) and losses of US$150,000 based on four hatcheries in Tema and Kumasi. Some farmers actually took advantage of the HPAI threat and outbreaks and bought DOC on credit, but did not repay the debt.
Benefits of HPAI prevention and control strategies
The complete eradication of the H5N1 virus in Ghana benefited the poultry industry in terms of avoidance of losses in the national poultry stock and biodiversity, with continuous employment generation and restoration of confidence by consumers as ripple effects, and increased public trust in the VSD because of its rapid response to outbreaks of HPAI H5N1. The depopulation of infected birds and those within the defined outbreak zone enabled the complete containment of the virus of HPAI H5N1 from spreading to other farms in the country. This saved 99.88% of the total poultry population in the country, which is valued at over US$ 416 million. This means that the HPAI control measures, particularly the eradication policy, were highly effective with a total net benefit of US$390 million. However, if we take into consideration the economic losses of other industries like the maize sector, which had been affected by HPAI, then costs would have been US$253 million higher than the benefits achieved by avoiding losses.
The containment of AI in the country strengthened employment generation, particularly at the commercial poultry farms with an average of 250 workers per farm. Further, consumer confidence in poultry products was restored when appropriate public awareness and education campaigns were intensified throughout the country. A restaurant in Kumasi reported that their frozen chicken consumption went down from 200 kg to 190 kg per day during the scare of AI in 2006, but consumption increased to 220 kg per day in 2008. The average price per 10 kg of frozen chicken sold in the open market was US$19.18 in 2007, and increased up to US$27.80 per 10 kg in 2008.
Conclusions
In response to AI outbreaks occurring in several countries in Africa and Asia, the government of Ghana and its development partners spent US$ 4.3 million for the prevention, control and containment of AI between 2005 and 2007. The government had an AI preparedness and response plan put in place before the three outbreaks of HPAI H5N1 occurred in Tema, Sunyani and Aflao in 2007. This plan has been used to guide the National Avian Influenza Working Group in managing the AI outbreaks. Presently, the poultry industry is recovering from the huge socioeconomic impact on poultry producers, including upstream and downstream sectors such as breeding farms, feed mills, and traders, due to AI outbreaks. Imports of hatching egg have increased to 89% in 2007 compared to 2006 when import bans for poultry and poultry products from countries that had reported outbreaks of avian influenza were implemented. Feed production has accordingly increased. Whilst there was a reduction of 8% in feed production in 2006 compared to 2005, there was an increase of 43% in feed production over the period 2006-2007.
Early interventions may have been effective in containing AI in Ghana; however, there remain several challenges ahead that still need to be addressed, such as:
• Improving hatchery operations to produce good quality day-old chicks for the poultry industry, and establishing an inventory of all existing hatcheries with information on their installed capacity per year, current production levels, and the type of day-old chicks produced.
• Linking compensation with standards for hygiene and biosecurity on poultry farms, that is, compensation is to be paid for all poultry farmers with high level of biosecurity measures on their farms.
• Creating new markets for the growing demand for value-added or specialty eggs (e.g. brown, cage-free, and organic) and poultry meat that could command larger presence and higher price premiums in the market.
• Improving transportation facilities for eggs by using refrigerated transport to enhance quality and shelf-life. In particular, improving storage facilities for egg wholesalers in the major collection points in Kumasi and Accra railway stations.
• Encouraging composting of poultry manure to minimize or avoid the spread of the virus in contaminated poultry manure.
• Involving egg seller associations and feed millers in training workshops on biosecurity measures.
• Strengthening the organizational capacities of associations (Ghana National Poultry Farmers Associations, Egg Sellers Association, Feed Millers Association and Hatchery Operators Association) and linking institutions along the poultry value chain particularly on marketing and distribution of poultry products.
• Building capacity of VSD staff in disease surveillance, reporting, diagnostic capacity, biosecurity training and delivery of animal health services to poor smallholder livestock farmers.
• Strengthening the level of biosecurity all along the value chain especially backyard farms and live bird markets.
Identifying the most cost-effective and socially equitable control measure for HPAI would be a large contribution in the efforts to prevent or reduce the risk of HPAI infection in Ghana. Much effort had been done by the government but the cost-effectiveness of these efforts remains to be determined. Such efforts should not only be cost-effective but also protect and enhance livelihoods, especially of rural poor households since chicken and eggs provide valuable source of protein, contribute a significant share to household income, and food, and provide insurance and social status in some cases.
