Elasticity and substitutability of food demand and emerging disease risk on livestock farms

Abstract Disease emergence in livestock is a product of environment, epidemiology, and economic forces. The environmental and epidemiological factors contributing to novel pathogen emergence in humans have been studied extensively, but the two-way relationship between farm microeconomics and outbreak risk has received comparably little attention. We introduce a game-theoretic model where farmers produce and sell two goods one of which (e.g. pigs, poultry) is susceptible to infection by a pathogen potentially dangerous to humans. We model market effects and epidemiological effects at both the individual farm level and the community level. The addition of a second good into this modeling framework ensures that producing a unit of livestock has an opportunity cost. We find that in the case of low demand elasticity for livestock meat, the presence of an animal pathogen causing large production losses can lead to a bistable system where two outcomes are possible, depending on the economic inputs into the system. One outcome is succesful disease control. The second outcome, a potentially dangerous one, is a stable equilibrium where farmers slaughter their animals at a low rate, face substantial production losses, but maintain large herds because of the appeal of high meat market prices, therefore maintaining disease circulation. We show the potential epidemiological benefits to (i) policies aimed at stabilizing livestock product prices, (ii) subsidies for alternative agricultural activities during epidemics, and (iii) diversifying agricultural production and sources of proteins available to consumers.