This report is an overview of the management of risk due to livestock diseases, a potentially catastrophic type of risk that can have strong external effects given its links to the food chain and to human health. Animal disease, primarily in farmed livestock, has long been a policy concern for food safety reasons and the high economic losses it can engender. The globalisation of trade and human movement, and sensitivities to food safety, enhance the relevance and complexity of disease control for terrestrial livestock. Outbreaks – or even rumours of an outbreak – can result in widespread consumer alarm, disruption of trade, and severe effects on incomes, not to mention the human cost of illnesses and deaths arising from animal disease.

Governments are increasingly acting to prevent and control livestock diseases that can cause major harm to human health (zoonoses) and/or to economic enterprises through their effects on income, trade and third parties. Policies in this area can be pursued in a number of ways. These include regulations and advisory/education systems, and compensation schemes to incentivise producers, veterinarians and others to take appropriate actions. However, in order to ensure efficiency, the nature and financing of these prevention, control and compensation schemes need to be carefully considered, given the need to involve a variety of stakeholders in both design and implementation.