The impact of the fipronil crisis on the financial performance of Dutch laying hen farms
Abstract Background: Illegal use of fipronil as an insecticide in 2017 has caused substantial damage to Dutch laying hen farms. We assessed how the Fipronil crisis has affected the financial performance of affected farms as well as unaffected farms. While affected farms faced culling of their flock and lost revenues, unaffected farms benefitted from temporary high egg prices. Methods: A three-step normative modelling approach is taken using two financial statements. First, a baseline was created by making up an income statement of a laying hen farm representing a ‘normal year’ Second, changes in farm income as a result of the fipronil crisis were estimated using a partial budget. Third, two additional income statements were created; one reports the income of an unaffected farm, the other of an affected farm. Estimations are for a 50 000 laying hen farm facing the fipronil crisis for five months.Results: While in a normal year this average-sized farm has a net operating result of around 18 kEuro, profitability was estimated to be -369 kEuro and +169 kEuro for the affected and unaffected farms due to the crisis respectively. For affected farms impacts were especially high as there was no government compensation or insurance. Conclusions: As Dutch farms typically operate as independent family farms, there was no compensation from other chain actors such as contract providers or integrators either. The affected farms therefore likely have faced financial distress and have had to increase debt or use their financial reserves for household consumption and restarting the farm. Outcomes contribute to discussions around liability claims and cost-benefit assessments of measures to improve chain food safety and rapid alert systems.