Instead, the crisis caused by bovine spongiform encephalopathy (BSE) in cattle cost the UK nearly pounds 1bn in the year after March 1996, according to an independent report published yesterday. It found, though, that job losses and the impact on the economy were less severe than predicted, because of government subsidies and compensation, and a change in people's shopping habits.
On Monday, the BSE Inquiry panel will hear evidence from Professor Roy Anderson of Oxford University, who has submitted written testimony that he was repeatedly rebuffed when he formally approached the Ministry of Agriculture, Fisheries and Food (Maff) from 1989 to 1991, offering to make an independent analysis of the BSE epidemic.
Professor Anderson runs a world-class group of scientists specialising in analysis of infectious epidemics, and says he was "somewhat frustrated" by Maff's refusal to give him access to its BSE database.
If his techniques had been applied then they would have shown that the ministry's ban on feeding BSE-infected food to cows was failing, and allowed them to take appropriate action. "The size of the epidemic would have been significantly smaller, by about a quarter of a million infected cattle," he says in his written submission to the inquiry.
When he was finally given access to the database, in June 1996, he calculated that a total of 1 million cattle had been infected with the disease, of which only 160,000 cases were actually diagnosed.
Scientist now believe that the 24 deaths from "new variant" Creutzfeldt- Jakob disease in Britain were caused by eating BSE-infected food. A spokesman for Maff said the ministry would not comment on Professor Anderson's statement at this time: "We are going to let the inquiry take its course. If there's criticism, people will have their chance to answer it."
Meanwhile, yesterday's report, Economic Impact of BSE on the UK Economy, said the UK beef industry suffered only modest falls in output and jobs between 1996 and 1997.
The report, commissioned by the previous government,estimated that the net loss to the economy in the first 12 months after the onset of the BSE crisis was between pounds 740m and pounds 980m - substantially lower than earlier estimates, following a 36 per cent fall in demand for British beef and beef products.
Early predictions of 46,000 job losses were substantially reduced by support to the food industry. Instead, no more than 1,000 people lost their jobs in the 12 months after the BSE crisis broke in March 1996.
But Stephen Nicol, a co-author of the report, warned: "The future impacts of the BSE crisis, in job and income terms, on some sectors - particularly beef farmers, abattoirs and part of the marketing chain such as auction markets - are likely to be significantly greater than those impacts that had occurred up to the middle of 1997."
At that time, wholesalers, manufacturers, retailers and consumers switched to other UK meat products as an alternative to beef, expanding output and employment elsewhere in the UK economy, they said.
The authors estimated that the switch offset between a half and two-thirds of the potential impact of the crisis on the economy. And the pounds 1.5bn of subsidy and compensation payments to farmers, abattoirs and other food businesses did "largely compensate" for the loss of output.
Though abattoirs were hit hard - particularly by the loss of the export market - their profit margins actually rose, helped by compensation payments and a fall in cattle prices.
Meat processors received no compensation and were forced to switch to imported beef and to change their recipes - raising costs and depressing sales and profits.
Regionally, the biggest losers were in Northern Ireland, followed by Scotland, and parts of northern and south-west England.
Winners and losers
How the BSE crisis affected different groups and areas:
Retailers, manufacturers that could switch to non-beef products;
Renderers and abattoirs covered by government compensation schemes;
Inspection and compliance services;
Dairy farms (in short term).
Specialist exporters of meat, livestock and genetic material such as bull semen;
Specialist beef and mixed livestock farmers.
ACROSS THE UK
England: North, major loss; South West, significant loss; West Midlands, significant loss; North West, small loss; East Midlands, small loss; South East, neutral; Yorkshire & Humberside, net gain; East Anglia, large net gain. Scotland: major loss
N Ireland: major loss;
Wales: small to significant loss.
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