Volume 10: Economic Impact and International Trade
4. Where did the economic consequences of BSE finally fall?
Summary

4.31 It would appear that the main effect of BSE during this period was to accelerate existing trends. The demand for beef had been declining throughout the developed world. BSE may have contributed to the rate of decline but it certainly did not cause it.

4.32 Long before BSE emerged, there was overcapacity in the slaughtering and rendering industries, and rationalisation and consolidation was overdue. The emergence of BSE may have brought forward the date but the changes in these industries cannot fairly be attributed to BSE.

4.33 The heightened inspection and health standards which were introduced in this period in the UK may, at first blush, seem attributable to BSE. But here, too, long-term trends towards improvements in meat hygiene practices meant that most of these heightened standards (and their associated administrative costs) would eventually have been introduced even in the absence of the disease.

4.34 In summary, the economic impact of BSE during the period to 20 March 1996 was not insignificant. There were real costs associated with it, especially for farmers and slaughterhouse-related industries, but these were minor in relation to the economy of the UK as a whole and each of the industry sectors. The taxpayer, through additional public expenditure costs of £288 million (in cash terms), faced perhaps the most significant economic cost of BSE over this period. Otherwise, BSE accelerated rather than caused the changes in the beef and cattle industries. The real crunch for this economic sector came after 20 March 1996, which is beyond the Inquiry's terms of reference.