An Economic Assessment of the BSE Crisis in Canada: Impact of Border Closure and BSE Recovery Programs

Abstract

This article assesses the economic consequences of three alternative government responses to the BSE crisis in Canada: 1) expansion in slaughter capacity; 2) partial destruction of the cattle herd; and 3) deficiency payments. Each of these policies is evaluated under four different border situations: 1) autarky; 2) free trade in young beef only; 3) free trade in young beef and cattle; and 4) complete free trade. The results of the policy analysis are quite sensitive to the border assumptions, making it impossible to select a “best†policy without perfect foresight with respect to the timing and the extent of the border opening.BSE, cattle and beef, partial equilibrium model, simulation, trade ban, International Relations/Trade, Livestock Production/Industries,