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What happens when the cows don’t come home? This report was commissioned by the World Society for the Protection of Animals and investigates the “economic impact of losing livestock in a disaster”.  It covers a wide range of material relating to the role of livestock in development, the economics of disasters, the treatment of livestock in disaster recovery efforts, and case studies on particular disaster events.

The purpose of this research is to highlight the current state of the literature relevant to livestock and disasters and to suggest future research areas that would help to understand better the impacts of losing livestock in a disaster.

This review focuses in particular on low-income countries.  This is because livestock are extremely important to economic development and welfare in most low-income countries.  Animals represent more than food — they represent livelihoods.  When people are affected by natural disaster, their animals (and thus their livelihoods) are also affected.   As experts in this field have put it:

From a global perspective, one of the most pressing needs [in disaster relief] is to improve livestock relief programming with communities who rely heavily on livestock for their social and economic well-being.

Source: LEGS 2009 p2

As such, this report reviews literature that relates to livestock in economic development, and also to the way disasters impact on economies.  Considerable research has focused on the role of livestock in economies, and at the economic effects of natural disasters.  We review the main themes of this work in the two main parts of this report.  In doing so, we hope to outline, explain and expand on the value of livestock and their role in disaster recovery, and to make this importance easier to demonstrate to a wider audience.

We begin in Section 1 by examining the role of livestock in all economies.  We see that in high-income countries, livestock are mainly treated as a financial asset and one of many sources of food.  This is in stark contrast to low-income countries, where livestock have a range of functions.  Animals provide meat, milk and eggs; they assist with ploughing fields; they can be sold for cash and play a role in cultural identity.   We see that livestock in low-income countries have direct and indirect values relating to food, agriculture, savings and cultural values.  The results of Section 1 are summarised below.

When livestock losses occur due to a disaster, it is direct values – those that can be estimated using market prices – that are generally considered in evaluating the cost of the losses.  However, such valuation rarely incorporates the indirect values of livestock, which can be more difficult to observe, but often more important than the direct financial loss incurred in a disaster.

All these factors are affected when livestock are lost in disasters.  Our literature review suggests that these values are often not considered in economic and general literature.  We believe that an understanding and acknowledgment of these indirect roles is crucial in understanding the role of livestock in developing economies, and in understanding why their loss in natural disasters is so damaging.

Section 2 examines disasters and the economics thereof.  Again, we focus largely on low-income countries, as these countries are more exposed and vulnerable to natural disasters than their high-income counterparts, and they also recover more slowly than high-income countries.  Factors that influence disaster exposure and vulnerability include:

• Levels of disaster preparedness and mitigation;
• Economic factors including savings, productivity and trade links;
• Public institutions and governance;
• Demographic factors including population density, health and literacy.

As with livestock loss, financial estimates of the cost of disasters tend to refer to direct impacts: the cost of physical damage to the factors of production (being people and animals, land and capital).    Again, in addition to these direct costs, disasters also have indirect impacts.  While these are often harder to estimate than direct costs, they can also be more important in understanding the full welfare impacts of disasters.  Indirect impacts typically result from the damage caused to factors of production and the losses sustained until such time (if ever) that this damage can be repaired.  The direct and indirect impacts of disasters are summarised below.

Economists have attempted to model the costs of disasters, both direct and indirect, using regression analysis.  We examine the efficacy of such modelling, and find that as it tends to be limited to macroeconomic factors, it sheds little light on regional effects – such as the loss of livestock.

In Section 3, we combine the findings of Sections 1 and 2 to help readers understand the impacts of losing livestock in disasters.  The summary table of this concluding section is below.

Section 4 presents three case studies — the 2010 Pakistan floods, the 2010 dzud (harsh winter) in Mongolia, and cyclone Nargis, which hit Myanmar in 2008 — and discusses the direct and indirect losses of livestock in each.

Structure of the report

This report is divided into four main sections.