WORLD TRADE  
ORGANIZATION  G/SPS/GEN/961/Rev.1 
21 October 2009 
 (09-5204) 
Committee on Sanitary a nd Phytosanitary Measures  
  
 
STDF WORKSHOP  
"USING ECONOMIC ANALYSIS TO INFORM SPS DECISION MAKING"  
GENEVA, 30 OCTOBER 2009 
 
BACKGROUND NOTE AND AGENDA 
 
Note by the Secretariat
1 
 
Revision  
 
 
Introduction 
 
1. In accordance with its mandate to exchange experiences and disseminate good practice in 
relation to the provision and receipt of SPS-related technical cooperation, the STDF has organized a 
workshop in Geneva on 30 October 2009 on the use of economic analysis to  inform and enhance 
decision-making in the area of food safety, animal  and plant health (sanitary and phytosanitary 
measures or SPS).  This document provides genera l information on the objectives and scope of the 
workshop, and the agenda (Annex 1). 
Objectives of the workshop 
 2. Political support and commitment is essential to ensure that adequate resources are available 
to control potential SPS risks and implement SPS measures.  However, competing priorities and financial constraints often mean that resources are in  short supply in countries.  In some cases it is 
only after a major food safety incident or animal disease or plant pest outbreak has occurred – and 
considerable resources have been spent on control – that attention focuses on the benefits and cost-
savings of improving SPS systems and cap acities to prevent such outbreaks.  
3. The purpose of this workshop is to share expe riences from countries and organizations that 
have used economic analysis to support SPS deci sion-making.  The aim is to demonstrate how 
economic analysis can generate information that  is valuable to improve SPS decision-making and 
enhance the effectiveness and efficiency of ava ilable resources.  In doing so, the workshop will 
illustrate why it makes economic sense to invest in improvements to SPS systems and capacity, which 
will help to garner high-level support for SPS cap acity building, including the allocation of the 
resources required.   
4. The specific objectives are to: 
(i) Present research and experiences on the use of  economic analysis to support decision 
making in the SPS area, including decisions on where to allocate resources.  This will 
address the potential impacts of pest/disease outbreaks on trade and the costs of 
                                                     
 
1 This document has been prepared  under the Secretariat's own respon sibility and is without prejudice 
to the positions of Members or to their rights or obligations under the WTO. G/SPS/GEN/961/Rev.1 
Page 2  
 
  prevention and control versus outbreaks, as well as the expected returns of 
investments in SPS capacity in terms of human health and trade. 
(ii) Share information on practical tools and approaches to incorporate economic analysis 
into SPS decision-making. 
(iii) Identify challenges in expanding the use of economic analysis to inform SPS decision 
making in developing countries, and seek possible solutions. 
 
Overview of available research and the scope of work to be presented 
 
5. A number of organizations and countries have applied economic analysis to the SPS area, and 
other work is ongoing.  For instance, the OIE re cently completed an extensive study – focused on 
transboundary animal diseases in Argentina, Viet Na m, Nigeria and Romania – which concludes that 
the costs of preventing major animal diseases are significantly l ess than those associated with 
managing outbreaks, and the benefit to cost ratio of  investing in prevention versus control is high.
2  
This study showed that investments in improvement s to animal health in Latin America of some 
additional US$157 million per year over 15 years ge nerate a net present value of US$1.9 billion, 
while in Asia eradication programmes for foot a nd mouth disease (FMD) provide benefits in terms of 
improved trade and enhanced market access worth several times the investment. 
6. A follow-up OIE study3, financed by the World Bank and the European Commission, 
estimates the costs of operational veterinary ser vices in "peace time", focusing on the costs of 
surveillance and prevention, early detection and ra pid response mechanisms, as opposed to the costs 
of a sanitary crisis due to non-prevented animal di sease outbreaks.  This work  includes in-depth case 
studies from Costa Rica, Krgyz Republic, Mongolia, Morocco, Romania, Turkey, Uganda, Uruguay and Viet Nam.  In addition, FAO is involved in work to assess the economic impact of FMD control and eradication in Asia
4 and is leading economic analysis work to identify at which point in the 
poultry value chain interventions targeting Avian Influenza are most cost-effective. 
7. Economic analysis has also been applied in the plant health area.  Fo r instance, members of 
the International Regional Organization for Agricultu ral Health (OIRSA) decided to invest resources 
to prevent the possible introduction of a pest into the region on the basis of an ex ante cost/benefit 
analysis for control of the Pink Hibiscus Mealy bug carried out by the Belize Agricultural Health 
Authority (BAHA). 5  Another study on the impact of invest ments to control fruit flies in 17 countries 
in the Asia-Pacific Region, recently completed by th e Australian Centre for International Agricultural 
Research (ACIAR), indicated an overall benefit to co st ratio of over 5:1 for the total investment and 
an internal rate of return of 33 per cent. 6  
8. In the area of food safety, research has been  carried out on the costs of the Danish Salmonella  
surveillance and control programme and the benefits  in terms of public health and trade.  The 
                                                      
2 OIE.  2007.  Prevention and control of animal di seases worldwide. Economic analysis – Prevention 
versus outbreak costs.  Final Report. Part 1. Subm itted by Civic Consulting – Agra CEAS Consulting.  
September 2007. 
3 This follow-up study is currently being peer -reviewed and will be published during 2009. 
 4 T.F. Randolph, B.D. Perry, C.C. Benigno, I.J. Santos, A.L. Agbayani, P. Coleman, R. Webb & L.J. 
Gleeson.  2002.  The economic impact of foot and mouth disease control and eradication in the Philippines.  
Rev. sci. tech. Off. int. Epiz., 2002, 21 (3), 645-661 (available at:  http://www.oie.int/boutiq ue/extrait/32randolph.pdf
).  Other research on this subject has subsequently been 
published by Benigno.  
 5 BAHA.  March 2003.  Cost Benefit Analysis for the Pink Hibiscus Mealybug Biological Control 
Program in Belize.  
 6 Lindner B. and McLeod P.  2008.  A review and impact assessment of ACIAR’s fruit-fly research 
partnerships, 1984–2007 (available at:  http://www.aciar.gov.au/publication/IAS56 ).  G/SPS/GEN/961/Rev.1 
 Page 3 
 
 
  Economic Research Service of the US Department of  Agriculture has done considerable work on the 
costs and benefits of implementing HACCP and pa thogen reduction programmes.  Other work is 
underway, including in the Netherlands and under th e WHO Initiative to Estim ate the Global Burden 
of Foodborne Disease, to generate information on the economic cost of foodborne diseases.  The 
International Food Policy Research Institute (IFPR I) is doing research on the development of cost-
effective control strategies for foodborne disease for different sized producers, including strategies 
focused on agricultural practices, and distributional aspects. 
9. Other work has sought to develop methodologi es and frameworks to guide decisions on SPS 
investments and/or resource allocations in gene ral.  For instance, one STDF project (STDF 20) 
developed a methodology to support decision-making on investments in SPS capacity development, 
primarily on the basis of export performance.7  Work is going on within the Southern African 
Development Community (SADC) and in Cambodia under STDF 246 to measure costs and benefits along particular value chains.  The New Zealand Mini stry of Agriculture and Forestry has developed 
an economic model for efficient r esources allocation for surveillance.
 8 
10. This workshop will present the findings of some of the above-mentioned research, drawing 
practical lessons and experiences for developing co untries interested in using economic analysis to 
improve resource allocation and investment decisi ons.  The presentations should provide guidance on 
the types of methodologies that can be used (e.g. cost-benefit analysis, cost-effectiveness analysis, 
multi-criteria analysis), as well as the requirement s and challenges for developing countries seeking to 
apply these approaches.  Presentations addressing the expected returns on investments in SPS systems 
will start from the premise that meeting minimum requi rements is necessary to facilitate trade but that 
the binding constraint(s) may not be SPS specific. 
Participants 
 
11. The workshop is open to delegates attending the SPS Committee meeting.  In addition, the 
STDF is funding the participation of approxi mately 10 officials from developing countries. 
Outcomes 
 
12. The workshop is expected to raise awareness among participants about the benefits and costs 
(direct and indirect) of investing in SPS capacity building, the potential impacts of SPS problems on trade, etc.  It will further clarify how economic analysis (including cost-benefit analysis, cost-effectiveness analysis, multi-criteria decision analysis, etc.) could be used more widely in developing 
countries to enhance the allocation of resources.  The presentations and discussions at the workshop 
will be used by the STDF to prepare a Briefing Note.  
                                                     
 
 7 Henson, Spencer.  2009.  STDF.  Independent external evaluation of STDF 20 by Spencer Henson for 
the Standards and Trade Development Facility (STDF).   
 8 Prime Consulting International / Nimmo-Bell Company.  June 2002.  An Economic Model for 
Efficient Resource Allocation to Surveillance.  A Deci sion Making Framework prepared for the Ministry of 
Agriculture and Forestry, New Zealand (available at:  http://www.biosecurity.govt.nz/files/pests/surv-
mgmt/surv/review/economic-model.pdf ).    
   G/SPS/GEN/961/Rev.1 
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  Annex 1 
 
STDF WORKSHOP ON THE USE OF ECONOMIC ANALYSIS TO INFORM  
SPS DECISION-MAKING  
30 October 2009 
 
PROGRAMME 
 
 
10:00  Welcome and opening remarks  – Miriam Chaves, Chairperson, SPS Committee 
 
10.15  Session 1.  Measuring the benefits, costs and distributional effects of adopting better 
food safety practices 
     This session will consider the costs, benefits, impacts and distributional effects of 
implementing better food safety practices, in terms of consumer health as well as 
marketplace impacts.  Presentations will c onsider ex ante and ex post studies that attempt 
to quantify the costs and benefits of implementi ng enhanced food safety controls, such as 
pathogen control programmes. 
 
• David Zorn, Center for Food Safety a nd Applied Nutrition, US Food and Drug 
Administration 
• Spencer Henson, Professor, International Food Economy Research Group, University 
of Guelph, Canada 
• Discussion 
11.30   Session 2.  Costs and benefits of the p revention and control of animal diseases in 
"peace time" and in response to outbreaks  
 
This session will explore the costs and benefits of preventing and controlling animal 
diseases in "peace time" and in  response to outbreaks.  Examples from recent economic 
studies led by the OIE  and the FAO will be presented.  The direct and indirect costs of outbreaks of specific animal diseases (such as avian influenza, foot and mouth disease) 
for particular countries/ regions will be cons idered, as well as th e generic costs of 
operational veterinary services that meet OIE standards in "peace time".  The 
presentations will illustrate the role that economic analysis can play in supporting 
responsible decision-making in the areas of poli cy and strategy, and the challenges faced.   
 
• Costs of national prevention systems for animal diseases and zoonoses:  A systemic 
perspective:  Frank Alleweldt, Ma naging Director, Civic Consulting 
• Economic impact of foot and mouth control and eradication in the Philippines:  
Reildrin Morales, Chief, Disease Control S ection, Bureau of Animal Industry, The 
Philippines 
• Taking a value chain approach in economic an alysis for Avian Influenza:  Nicoline de 
Haan, Socio-economics Coordinator, Emerge ncy Centre for Transboundary  Animal 
Diseases, FAO 
• Prevention versus outbreak costs for animal diseases worldwide:  Frank Alleweldt, 
Managing Director, Civic Consulting (on behalf of the OIE) 
• Discussion G/SPS/GEN/961/Rev.1 
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  13.00  Lunch  
 15.00  Session 3.  Assessing the economic eff ects of investing in plant health control 
programmes  
 
 This session will consider the costs and benefits of investing in phytosanitary 
capacity with examples from Belize and the Asia Pacific Region.  The presentations will draw 
on studies undertaken by the Belize Agriculture Health Authority (BAHA) to guide (ex ante) 
the allocation of resources in the plant hea lth area, and by the Australian Centre for 
International Agricultural Research  (ACIAR) to evaluate the ex post impact of investments in 
several countries in the Asia Pacific Region from 1984-2007. 
• Analyzing the costs and benefits of the Pink Hibiscus Mealybug in Belize: 
Hernan Zetina, Coordinator, Medfly Programme, Belize Agricultural Health 
Authority (BAHA) 
• Use of economics in pest and disease management:
  Douglas Birnie, Director, Policy 
and Risk Management Directorate, Biosecurity New Zealand, New Zealand Ministry of Agriculture and Forestry 
• Quantifying investments in fruit fly research  and development in the Asia-Pacific 
region:  Paul Vitolovich, Manager SPS S ection & Special Advisor, Department of 
Agriculture, Fisheries and Forestry, Australia 
• Discussion. 
16.15  Session 4.  Incorporating economic analysis into SPS decision-making in practice  
     Building on the previous presentations and discussions, this session will consider 
practical approaches and strategies to make greater use of economic analysis in SPS-
related decision-making processes, and the exp ected benefits.  Presentations will discuss 
what is required to integrate economic analysis into SPS decision-making, as well as the 
challenges (e.g. availability of data and exper tise), and future needs in this area for SPS 
technical cooperation. 
 
• Integrating economics with risk assessment to inform SPS decisions:  Clare Narrod, 
Senior Research Fellow, Markets, Trade and Institutions, Inte rnational Food Policy 
Research Institute (IFPRI) 
• Tools and approaches to use economic analysis in SPS decision-making: 
Spencer Henson, Professor, International Food Economy Research Group, University 
of Guelph, Canada 
17.45 Concluding remarks and close  – STDF Secretariat  
 
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