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GIC Contributor Blog/ Food Chain Threats: Minimizing Risk
From The Financial Times Online
May 31, 2006
http://news.ft.com/cms/s/6a91ef06-f0c3-11da-9338-0000779e2340.html

Agency warns of higher risks of bird flu
By Andrew Jack in London
Published: May 31 2006 17:49 | Last updated: May 31 2006 17:49
World flu pandemic Europe ’s disease control agency will on Thursday warn governments to accelerate their preparations for a flu pandemic in the face of an increased risk the bird flu virus could mutate into a form more dangerous to humans in the near future.

In its latest public health risk report, the European Centre for Disease Prevention and Control (ECDC) will say there are “many good reasons . . . to continue and intensify” preparations, including boosting co- operation among countries and between health, agriculture and other government departments within each nation.

Chief of these reasons is the spread of the virus since January into a broad range of birds, including migratory species that travel widely.

As a result, Europe must adjust to the likelihood of H5N1 becoming endemic in birds, warns the ECDC.

The cautiously worded document from the agency, created last year to monitor the spread of disease in the European Union, concludes: “The likelihood that [the H5N1 virus] might achieve any inherent potential in the near future may have risen.”

It stresses there are no current indications that the behaviour of the flu virus in humans has changed significantly. But it says the spread this year of H5N1 into animals in Europe, the Middle East and Africa increases the likelihood of human exposure and mutation or recombination of the virus.

The report comes after the World Health Organisation said on Wednesday it saw no need to escalate its pandemic alert level, as its investigations intensified into a cluster of infections in Sumatra in Indonesia that killed seven people this month.

The WHO said there were no signs of significant genetic mutation in the virus that it has studied in four of the Sumatra victims.

It said there was no spread of H5N1 from the cluster, although it has given the antiviral drug Tamiflu as a prophylaxis to 54 people.

A further six cases confirmed elsewhere in Indonesia in recent days have brought the worldwide total of infections to 224, and deaths to 127.

“H5N1 has become far more prevalent and, if it stays in its present form, we are going to have to learn to live with it in Europe,” said Angus Nicholl from the ECDC.

At a Europe-wide conference in Sweden earlier this month, the agency pledged to complete its assessment of all national preparation plans by July 2007.

It also promised to draw up indicators to assess progress, accelerate the take-up of seasonal flu vaccine, and strengthen international support to combat the virus, especially in Africa.

GIC's Commentary:

Implications:

The continuing spread of the H5N1 bird flu virus has made it necessary for governments around the globe to take seriously the threat of a pandemic and begin to consider and implement precautions to protect the human populations. However, the potential for the extensive spread of the virus to result in it becoming endemic in birds has more immediate consequences. Specifically, the globalization of the food industry means that today, trans-border pathogens such as H5N1 have the capacity to cause massive dislocations to the global food supply chain.

Analysis:

While governments have, albeit haltingly, begun to respond to the threat posed by H5N1, the food industry at the international level remains vulnerable. Until industry can develop a way to coordinate its actions and work decisively toward strengthening the three pillars of defense against trans-border pathogens--surveillance, prevention and defense--the global food supply chain will remain at risk. And it’s not just bird flu that poses a threat to global food producers. Recent incidents involving foot and mouth disease, BSE and wheat rust demonstrate that all sub-sectors of the food industry are susceptible to some threat or another. Furthermore, the linkages between food producers and the various enterprises reliant on them for business, multiply the potential severity of the threat.

Although it is unrealistic to expect an immediate industry-wide turnaround in global preparedness, individual agro-industries directly vulnerable to trans-boundary pathogens and supporting industries up and down the food chain as well as in the financial sector urgently need to pursue new risk minimization strategies. Any such roadmap must include operating phyto-sanitary controls at the plant and industry levels worldwide. Step two is for multinationals and their affiliates to introduce uniform standards and strengthen their ability to originate product from a diversity of suppliers in different countries. Step three is to establish reporting and contracting procedures so that suppliers, buyers, and the financial community are protected from any eventual contagion and sudden disruption in supply.

Many companies are first movers when it comes to food safety and their efforts should be rewarded by agribusiness investors. In fact, these initiatives should assume a weighted value when it comes to hedging commodity positions. Nonetheless, it takes even less than one bad apple to poison the sector and industries both directly and indirectly impacted by a biosecurity threat.

Risk minimization is just that—it reduces exposed risk but doesn’t eliminate it. Ultimately, the longer term solution rests with a global industry platform and coordination. The stakes are too high to do otherwise.

 


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