EVANSVILLE, Ind., Sept. 16 (UPI) -- A handful of insurance companies in the United States and around the world are offering policies to cover massive losses hog farmers could incur if African swine fever impacts their business.
"The probability of it reaching the United States is probably unlikely," said Chris Moore, an insurance broker for ONI Risk Partners, which offers African swine fever insurance through James Allen Insurance. "But, if it were to come, the impact would be severe. And, severe is putting it lightly. It would be a disaster."
African swine fever is spreading relentlessly, infecting at least 18 countries in Africa, Asia and Europe. The disease is usually fatal to pigs, but does not infect humans. There are no treatments or vaccines, leaving culling and biosecurity as the only tools to fight it.
Its arrival has devastated the pork industries around the world and put countless farmers out of business.
In the United States, between 100 and 150 farms have purchased African swine fever insurance through James Allen, which was the first agency in the country to offer it, Moore said.
"We have companies that are on the top 10 list of pork powerhouses, and we have guys with as little as 600 sows," Moore said.
James Allen, based in Indiana, unveiled its program in September 2018, just a month after China announced the disease's presence. At least one other U.S. company has rolled out an African swine fever policy -- the Marsh & McLennan Agency, which operates nationwide.
The James Allen policy offers a couple of different types of coverage, Moore said. Farmers can opt for one that would reimburse all their farm expenses should the virus emerge. These include costs for feed, veterinary bills, other insurance, mortgages and anything else the farmer has to pay.
The other policy would reimburse the farmer for every hog that dies.
The policy premiums depend on the state in which the farmers operate. The major hog-producing states, like Iowa, have the highest premium. For $1 million of coverage, a farmer there would pay about $15,000 per year, Moore said. For other states, like Tennessee or Kentucky, the premium would be about half of that.
"This is a little bit more expensive that other types of insurance," Moore said. "But, we're talking about insuring a total loss here."
If African swine fever infects a farm, that farmer would have to cull all of the animals, losing all income immediately. Even if the virus doesn't reach a particular farm, the presence of African swine fever in the United States would severely depress the pork market and create financial losses for farmers.
That is because the federal government would stop all movement of pigs and pork, as well as pork exports. Since the United States exports roughly 30 percent of its pork, losing those foreign markets would be devastating, Moore said.
The impact would be similar in other countries, and so insurance policies are popping up elsewhere in the world.
In Germany, the government maintains a compulsory insurance program that will pay hog farmers should an outbreak occur. In addition, the country has three private insurance companies that offer optional policies, according to the National Hog Farmer trade magazine.
Elsewhere, farmers in Denmark have banded together to create an African swine fever insurance program. The United Kingdom's National Pig Association is seeking feedback from its farmers about what kind of insurance program they want. Groups in Spain have asked the government to add the disease to their national insurance program.
"Our ... agency network has started to express that demand exists in the U.K. for an [African swine fever] insurance solution," the U.K. association said. "The threat of African swine fever to the U.K. pig production industry heightens, following the continued spread of the disease globally, and most recently into Western Europe."
"Right now, insurance does not cover this disease," Carlos Carreira, a veterinarian with ASAJA Málaga, a farmers' association in Spain, told a Spanish agricultural news magazine. "If it does enter Spain, the farmer needs means to maintain his job."
China, which was the world's largest pork producer before the outbreak, is estimated to have lost between 30 and 50 percent of its herd to the disease. At the high end, that's roughly 200 million animals. Many of those animals were raised in small "backyard" farms that will never recover.
Nearby Vietnam has culled some 3.7 million pigs, according to the United Nations. Mongolia has lost more than 3,000 -- more than 10 percent of its herd. And, farther west, officials in Bulgaria declared a state of emergency after culling around 160,000 hogs -- 20 percent of their herd -- failed to stop the disease's spread.