The foot-and-mouth scare is causing significant collateral damage to non-agricultural sectors of the economy, according to Davy Stockbrokers.

In his latest research, chief economist Mr Jim O'Leary warns that a proper balance must be struck between reducing the risk of getting the disease and jeopardising jobs and output outside agriculture.

"Ireland has long passed the point where difficulties in farming significantly dampen overall economic activity. The record of recent years is eloquent testimony to this. Between 1996 and 2000, GDP increased by around 10 per cent a year even as agricultural income fell by a cumulative 18 per cent."

He added that it was in the interests of everybody that foot-and-mouth be kept out of Ireland, not least because the general taxpayers would have to fund whatever compensation package farmers received in the event of an outbreak.

An outbreak would also cause serious problems for agri-business. However, it is difficult to quantify how the cost would be shared between farmers, food processors and taxpayers, although farmers would almost certainly receive compensation, Mr O'Leary noted.

The overall cost would depend on the duration of any export ban and the willingness of the European Commission to buy into intervention.

It is also likely that an outbreak would provoke a shift in consumer demand to other protein sources such as milk, cheese, eggs and poultry.

"Whatever loss of income the farm sector would suffer on meat would, therefore, be at least partially offset," he said.

He added that farming now accounted for less than 4 per cent of GDP. Adding meat processing boosts this to 5 per cent. At the same time, receipts from tourism are the equivalent to about 5 per cent but "tourism is a growth industry and one that is largely unsubsidised".

He also said that export restrictions would amount to an effective worldwide ban on exports of live animals and meat products, but would scarcely impinge on other food products.

The value of exports to which restrictions would apply is about £1.7 billion (P2.16 billion) or 37 per cent of the value of all food exports. "In other words, by far the greater part of food exports is likely to be unaffected by the ban."

He said the restriction would apply to just 2.3 per cent of total exports of goods and services.