Rising cost of farm crisis

The knock-on effect of the crisis is growing by the day

By BBC News Online's Jorn Madslien

Tens of thousands of jobs are under threat as the foot-and-mouth outbreak extends its grip on the UK.

Entire rural communities and companies ranging from village pubs to road haulage firms to city centre butchers are being hit as the cost to the UK economy of the disease mounts.

Many country pubs are nearly empty.

Sporting events have been decimated, with horse racing and at least one rugby international cancelled, so betting shops are losing large chunks of their traditional business.

And weekends in the country - or even Sunday lunch at a country pub - have been effectively banned.

Those City dwellers who thought foot-and-mouth disease would have little impact on their lives are being forced to have a rethink.

Not only are there the travel restrictions and sporting cancellations, but soon we should all notice a rise in the price of meat on sale in supermarkets as a result of wholesale pork and lamb prices doubling in less than a week.

Bankruptcies ahead

The net result is expected to be that a string of bankruptcies will hit several sectors of the UK economy following the outbreak.

The cost of some racing cancellations this weekend

Newbury
£20-30,000

Kelso
£10-20,000

Huntingdon
£20,000

Wetherby
£20-25,000

Race tracks' own estimates.

Many businesses that depend on agriculture are suffering, as are rural shops, pubs, restaurants and country tourism.

"This is not a farming crisis, it is an industry crisis," said the GMB trades union general secretary John Edmonds.

"The adverse effects of this outbreak go well beyond the farming businesses directly affected," added the Country Land and Business Association's chief political adviser, Nick Way.

Can't get to work

Many firms which just happen to be based in the countryside are also hurt because travel bans in some areas mean their goods cannot be sold and their staff cannot travel to work.

Newbury race course stands to lose up to £30,000 this weekend.

"We have had many employers asking us whether they can lay staff off because of the lack of work," said Derek Evans of the Advisory Conciliation and Arbitration Service, an independent industrial relations organisation.

In addition, he said, many employees are "worried that they may be dismissed if they can't make the journey to work due to the exclusion zones".

The most obvious losses are incurred by industries directly linked to farming.

Truck drivers who can no longer transport meat and animals are losing between £4m and £5m per week, according to the Road Haulage and the Freight Transport associations.

Truck drivers and meat processors

And some hauliers are warning of imminent job losses.

The meat processing industry is also losing money fast.

The loss of activity is costing £60m a week according to BBC Newsnight estimates based on National Statistics figures showing a turnover of £3bn per year.

Farming loses £51m per week because livestock cannot be shipped to market.

The cost to the industry is reduced slightly - but only because they have started axing jobs.

More than 1,000 workers at meat processing plants and other factories have already been laid off or are on short term contracts, according to the GMB trade union.

And an uncertain future faces 20,000 workers in the slaughter industry and 40,000 in the bacon and ham processing industry if the crisis continues, the union said.

Then there are the losses suffered by the farming industry itself.

Losses because animals cannot be shipped to market total £51m per week, according to the National Farmers Union.

Rural tourism

Rural tourism businesses - many of them run by farmers keen to supplement their already falling agricultural incomes - have already been hit since people are encouraged not to visit the countryside.

This is not a farming crisis, it is an industry crisis

John Edmonds
GMB trades union general secretary

A million anglers are staying away from the UK's rivers, livery stables are faced with thousands of horses churning up their wet fields, walkers and mountain bikers are cancelling their weekend breaks.

Shops, pubs and restaurants are in the same boat: Their customers are simply not turning up.

The owner of the Queens Arms pub in the Gloucestershire village of Ashleworth, Tony Burreddu, predicts sales will drop by £500 per week.

Even watering holes in the cities could see their sales plummet as rugby and racing events, normally broadcast on TV in pubs, have been cancelled.

Racing costs

Racing events across the country have been called off, though some of them would have been cancelled anyway due to snow.

The boss at Newbury race course, Mark Kershaw, reckons he will be up to £30,000 out of pocket after cancelling the meets on Friday and Saturday.

We have been lucky in the respect that the decision was made early so we didn't incur costs for the printing of race cards and catering

Mark Kershaw
Newbury race course

Other race courses report similar losses, with Cheltenham's restaurants and hotels likely to find big holes in their incomes if the annual racing festival is cancelled.

"But we have been lucky in the respect that the decision was made early so we didn't incur costs for the printing of race cards and catering," said Mr Kershaw.

Which means the printers and the caterers have suffered consequential loss, as an indirect consequence of the foot-and-mouth outbreak.

Inflation threat

Meanwhile bookmakers are having to tempt punters with South African horse racing action as they seek to avoid big hits to their trade.

Betting shops are expected to lose up to £1.5m during the racing suspension.

Train companies, airlines and petrol stations may also begin to lose money if people's movements continue to be restricted.

All these effects could lead to a decline in the overall growth rate of the UK economy during the course of the crisis, hurting company profits in a wide range of industries and yet also pushing up inflation if meat costs continue to rise.

One thing is for sure; as each day passes with more cases of foot-and-mouth disease, the implications for the entire UK economy grow more severe.