The Foot and mouth disease was spreading to the whole country of Korea. The economic harm of the FMD has shown as farms’ loss and government expenditure. In addition, livestock industry and its linked sectors also have suffered economic losses from the disease. It was criticized that government’s policy target for FMD free country status without vaccination policy was inappropriate and maintaining FMD free country status has no economic gain to the Korea. With that point of view, it is necessary to review other countries’ FMD policies, OIE’s FMD related regulations and definitions of FMD free status. After reviewing all materials, this study estimates economic impacts from the outbreak of FMD and its policy implications.

This study provides scientifically sound knowledge of FMD to make people easily understand related matters. Also providing FMD policies of other countries such as England, Netherlands, Japan, Uruguay, Chinese Taipei. These policies are compared to the Korean policy to properly modify FMD policy decision making. Especially other countries policy of success and failure will be precisely dealt with in this study. This study shows that it is necessary to maintain the FMD free country status with several reasons. Mostly, the disease free status can be achieved from adequate prevention system. Without disease prevention system, the productivity will be decreased and it could be worsen off.

The input-output analysis was performed in this study. The analysis was co-worked with the Korea Development Institute. The analysis result shows that economic impact of FMD outbreak in Korea. The measure is based on a reduction of number of livestock unit and production value reduction. In the scenario analysis, if livestock productivity dropped in 10%, production value decreased to almost 2.4 trillion won. This figure shows that animal disease prevention system playes an important role in agriculture and a nation"s economy.

In another scenario analysis, this study assumed that regains the FMD free status in 2013 but the disease outbreak again shortly after getting the disease free status. Facing the disease outbreak, this study analyzes two policy options such as "vaccine-to-live" and "stamping out". The result shows that "stamping out" policy requires less government expenditure than "vaccine-to-live" if the volume of slaughter animal is below 15 thousands. This scenario analysis indicates that government"s decision making of FMD prevention should deploy ex-ante economic consideration before executed.

After the declaration of FMD outbreak, the government have to consider and change several policy issues. Most of all, crisis management system have to be enhanced to effectively manage all kind of disease situations. Also vaccinated animal management system and farmer compensation system is needed to change. Proper stamping-out procedure respect to animal welfare and effective disease prevention system also necessary to be modified.