CHOICES
A publication of AAEA
As an island nation and exporter known for shipping large percentages of its high-quality animal products internationally, Australia is very conscious of its biosecurity status, with a long-standing history of protecting livestock populations from outside pests and diseases at the national borders. More recent efforts combine border vigilance with collaborative management of prevention and response activities within Australia. An attempt to split the bills between biosecurity “beneficiaries,” such as producers and consuming taxpayers, and biosecurity “risk creators,” such as importers and travelers, via different flat-rate levies targeted to each group, has had mixed success. Cost-sharing agreements covering emergency response, producer loss payments, and surveillance provide indirect incentives to follow safer practices with guidance from the government-industry-research partnerships created by Animal Health Australia (AHA). As is true for the United States, Brazil, and in the wildlife arena, challenges remain in creating more direct incentives for preventing pests and diseases compatible with policy objectives and biosecurity participants’ motivations. The search for market mechanisms leading to speedier adoption of advanced surveillance methods, particularly those capitalizing on technology, continues.
two areas (Figure 1). One wraps from the upper thirds of Western Australia (WA) and the Northern Territory (NT) around to the east, covering the middle and eastern parts of Queensland (QLD) and New South Wales (NSW), all of Victoria (VIC) in the south, and the southern part of South Australia (SA). Extensive beef operations dominate the northern, tropical areas, while intensive beef operations in the eastern midsection are joined by intensive lamb production, extensive wool and lamb production, and very small vertically integrated pigand poultry production sectors. Moving into southeastern Australia adds intensive dairy production to the mix. A second much smaller livestock production area is found in the southwestern part of the state of Western Australia, with intensive beef and extensive sheep operations along with another very small segment of intensive pig production. A vast arid region occupies central and central western Australia (Harper et al., 2021).
Australian producers face the challenges of intense weather variations as they develop their largest markets among consumers abroad seeking higher quality goods. Figure 1 shows the values of production by commodity across the Australian states. Almost three-quarters of the values of production for wool, sheep and lamb meat, and cattle and beef are exported, along with 39% of dairy production. This contrasts with the Brazilian and United States livestock sectors, which export up to one-third and one-quarter of production, respectively (ABARES, 2023).
During the 1990s, concerns about Australia’s ability to organize and fund timely responses should a highly infectious disease outbreak occur in commercial livestock, transitioned the animal health systems to more formal, on-going interactions among its many parties. Legislated responsibilities are divided between the national government focusing on international commitments safeguarding trade, and individual state and territory governments tasked with surveillance, disease preparedness and response, and livestock identification systems within their respective borders. National consultative committees bring government entities including the Chief Veterinary Officer and laboratory personnel together with AHA to develop and implement harmonized plans protecting animal health as
well as their funding mechanisms. Unique to the system is the role of AHA, which functions as an independent, public nonprofit company funded by governments and industry to facilitate implementation of animal health programs. Greater participation in these agreements is motivated by the expectations of groups sharing the costs for biosecurity activities and wanting a say in developing the approaches laid down. Getting to agreement on the approaches is attributed to AHA facilitation of the processes and determination to come to workable agreements (AHA, 2021).
Cost-sharing arrangements—which are now part of the animal health systems under a “beneficiary pays” principle—are illustrated by funding of AHA and work through it in developing and funding outbreak response plans and producer loss payments. For AHA, 2023–2024 core funding of 4.8 million AUD comes in set equal thirds from (1) the Australian government, (2) state and territory governments, and (3) livestock industry groups. Just over 1% of core funding comes from associate memberships. These funds are used for administering programs working across multiple livestock industries such as the Emergency Animal Disease Response Agreement (EADRA) and working toward better on-farm biosecurity and surveillance databases supporting international market access. The above organizations also provided another 6.8 million AUD of noncore funding to AHA for 2023–2024, with the Australian government giving 1.2 million AUD, states and territories0.7 million AUD, industry members 3.7 million AUD,associate members 0.2 million AUD, and external stakeholders 1.0 million AUD. The noncore funding is typically targeted to projects of interest to individual segments of the livestock industry (AHA, 2023).
Similarly, EADRA is a contractual agreement between 23 government agencies and livestock industry groups that details the sharing of eligible costs that would be incurred in an approved emergency response to outbreaks of 66 Emergency Animal Diseases (EADs). The eligible costs are salaries and wages, operating expenses, capital costs, and producer loss payments associated with the outbreak response. The 66 diseases are divided into four categories based on potential public health, environmental, and livestock industry consequences, as indicated in Table 1. Cost sharing between government agencies and the affected industries ranges from Category 1 diseases, where the government covers all outbreak-related expenses, to Category 4 diseases, where affected industries cover 80% (Black, 2012).
The producer loss payment paid under the EADRA is limited to the “value of livestock and other property damaged or destroyed in the response effort” (AHA, 2022). Once the property can restock, they may receive a second payment if livestock replacement costs exceed the initial calculated animal value. Business continuity losses are not covered under EADRA producer loss payments, although they may be partially addressed by other disaster relief agencies.
The National, state, and territory governments cover the outbreak costs as it unfolds. Within 6 months of the end of an outbreak, the state or territory government leading the response must provide documentation of the expenses to AHA, which then coordinates reimbursement of the industry cost share through levies which may be spread out over a period of time, rather than subject to immediate full payment. If outbreak expenses exceed 1% of the affected livestock sector’s gross value product (GVP), all parties must agree to further funding before the response continues (AHA, 2020).
As Australia’s international trade position for both livestock and plant goods strengthened through the 2010s and into the 2020s, a series of reviews called for increased and more sustainable, animal, plant, seafood, and forestry biosecurity funding, with attention drawn to widening the pool of risk creators’ and beneficiaries’ contributions. One review indicates over half of state and territory funds are spent on managing established pests and diseases, while the Australian government directs about half of its funds toward disease prevention and emergency planning. There is argument for a larger share of funds to be directed away from response and toward cost-effective prevention measures.
National, state, and territory governments sporadically increased their biosecurity outlays in 2021/22 and 2022/23 while longer term solutions based on the reviews took shape. Notably, the Australian national government made two unsuccessful attempts to introduce (flat-rate) levies in a bid to improve funding sustainability—a first in 2019 targeting importers as risk creators (DAFF, 2024) and a second in 2024 expanding the scope to include a levy on domestic producers as biosecurity beneficiaries (DAFF, 2025). Instead, from 2024/25 forward, border-biosecurity activities will largely continue to be funded but at increased levels by taxpayers via increased budget appropriations and by increasing existing cost recovery charges on importers. Table 2 illustrates recent increases in charges on importers, passengers, and mail. These funds are expected to slow the recent trend of Australia relying more on short-term government and external industry contributions with some additional targeting of disease prevention incursions with longer term investment in surveillance.
Australia introduces indirect economic incentives for improved animal health through its cost-sharing approaches. But efforts remain at a collective level rather than more directly targeting preventative biosecurity actions by individual farmers, trading companies, and governments. Internationally, farmers,
governments, and researchers continue to face challenges in designing and implementing efficient toolsin the face of uncertainty about the risks of disease, the costs of recommended interventions, and the payback from them (Biesheuvel et al., 2021). Two examples raised in submissions responding to the Australian Department of Agriculture, Fisheries and Forestry (DAFF) November 2022 request for “what long-term, sustainable funding and resourcing for Australia’s biosecurity system might look like” illustrate possibilities for further targeting biosecurity incentives in the Australian context: importer insurance and investment in point of care testing (DAFF, 2022b).
Stoneham et al. (2021,2024) explore biosecurity risk insurance (actuarial levies) as an efficient alternative to flat-rate levies on risk creators who import. The study analyses the insurance characteristics needed for importers to face signals that lead them to lower risk in their importing patterns in terms of product origin or modes of transportation. Higher risk importing faces higher insurance premiums. Although the policies could be sold by either the private or the public sector, government would need to mandate importers to purchase the insurance. The proceeds from insurance premiums would be used to fund government risk-reducing measures such as inspections taken prior to entry of the products into the country as well as the costs of any resulting outbreaks. International trade and production losses would not be covered. Information gained from such an insurance market also provides price estimates for taking on biosecurity risks across sectors. Further research work to determine the feasibility of biosecurity risk insurance is recommended in these responses.
The second example, increased investment in point-of-care (POC) testing, appears in multiple responses. The reviews of Australian biosecurity funding and the national government’s new funding initiatives also emphasize the need for easier adoption of new technologies with an emphasis on improving government inspection systems and diagnostics. With results available more quickly and on-site, POC tests able to diagnose multiple diseases could help provide the disease information needed to better focus response and surveillance measures, particularly for EADs. Economic modeling studies repeatedly report the value of early detection in reducing Australian outbreak response costs and international trade losses. This dependence on international trade and the remote locations of livestock operations provides market incentives for developing well-validated POC testing for detection and surveillance, even if individual test costs may seem higher.
However, successful implementation of POC tests requires more than just test development and validation in the lab. They must be validated under the resource and personnel conditions in the field and in the context of government agencies’ capacities to implement confirmatory testing protocols. Validation approaches have been developed by the World Organization for Animal Health (WOAH) as well as a few countries, but their application is not always mandatory. Targeted market incentives for POC test implementation falter as variations in location characteristics increase costs of field validation, and the economic benefits of this field validation are spread so widely across livestock producers, consumers, and government biosecurity departments (Sims, 2012; Hobbs, 2020; Railey, 2024). As a result, marshalling private investment for field validation of POC test implementation is difficult, and government departments struggle to obtain the additional funding needed for implementing new technologies. Without the information provided by quicker, on-site tests, uncertainty continues to blur the incentives for a better balance toward preventive rather than reactive biosecurity.
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