Compensation policy

A separate provision for the release of funds will be required for the response to an incursion that becomes more severe after the immediate phase, i.e. if the incursion becomes more widespread or lasts longer than the initial funds can cover. The amount required cannot be predicted, but the mechanism to identify the sources of funding and how they should be released must be developed during the preparation phase so that funds can be released quickly if required.

In some countries, it may be desirable for funds to be provided from both the government and the private sector for emergency programmes against some diseases (i.e. cost-sharing arrangements). This would be agreed upon after a review of the nature and proportion of public good and private good benefits that would be derived from the elimination of the disease.

If appropriate, a funding formula may be agreed upon in which each sector pays for a fixed percentage of the cost of the total campaign or specific components in the campaign. If the private sector is to contribute, it needs to be determined who in the private sector benefits from control and therefore should share the cost (e.g. processing industries, traders and farmers’ organizations). It also needs to be determined how the private sector funds will be raised. The funds could be established through compulsory industry-wide insurance premiums or through industry levies on livestock transactions or slaughtering which are then held as special, reserved funds.

Voluntary individual insurance policies could be satisfactory for insuring against direct losses from a disease or disease-control actions, but they are unsatisfactory for raising funds for the campaign itself. However, there are currently few countries where insurance companies are prepared to sell such insurance, or if they do so, it can be very expensive.

Additionally, consequential losses, such as loss of income because of reduced milk production, are potentially variable because they depend on factors that cannot be predicted, such as the duration of an epidemic. Insurance companies will very rarely be prepared to cover these. It must always be remembered that insurance companies sell insurance to make a profit.

In some cases, the funding of the whole emergency disease eradication campaign may be beyond the resources of the country. If this is the case, forward planning should be carried out to identify potential international donor sources for such a campaign. The procedures for applying for funding and requirements for preparing and submitting an application should be predetermined. However, this sort of external funding can never be guaranteed and is unlikely to be available quickly. Most countries have a national disaster plan which includes funding, and it is desirable for animal health emergencies to be included in this for various reasons, one of which is to have access to finances.

comPensatIon PolIcy

A compensation policy is a cornerstone of any control policy that will require the killing of animals or the destruction of property. It must be stressed that compensation should be seen as mostly an incentive to encourage rapid reporting of disease, and not as compensation for all losses. Compensation arrangements that are either inadequate or too generous can encourage behaviours that are damaging to the control efforts. Poor compensation might encourage owners to hide or move their animals to avoid culling. Compensation