USDA changes avian flu indemnity payments

Actions taken to solidify policies surrounding indemnity payments and further strengthen biosecurity adherence at poultry operations.

The outbreak of highly pathogenic avian influenza (HPAI) in the spring of 2015 had profound impacts on poultry producers, allied industries and federal and state governments. Responding to gaps seen in indemnity payments realized in the outbreak, the U.S. Department of Agriculture’s Animal & Plant Health Inspection Service (APHIS) announced Friday an interim rule that outlines conditions for the payment of indemnity claims for HPAI.  

One change includes a formula to allow indemnity payments to be split between poultry and egg owners and their contract growers.

During the 2014-15 HPAI outbreak, APHIS had been paying the full indemnity amount to the birds’ owners − usually the poultry company − with the understanding that parties that have entered into contracts with the owners to grow or care for the animals would then be paid by the owner in accordance with contractual agreements.

During the course of addressing the current 2015 outbreak, APHIS said it determined that the existing regulations do not specify that the indemnity should be split between owners and contractors. “Since both owners and contractors incur losses when a flock is depopulated, both should be compensated appropriately,” APHIS said.

A similar gap in the regulations concerning the payment of indemnity for low pathogenic avianinfluenza (LPAI) became an issue for APHIS during an outbreak of LPAI in Virginia in 2002. Later that year, an interim rule, followed by a final rule, provide for LPAI indemnity payments to owners and contractors.

Indemnity for eggs

The rule also clarifies an existing policy that allows for the payment of indemnity for eggs destroyed by HPAI response. Indemnity payments for eggs required to be destroyed due to HPAI will be based on the fair market value of the eggs, as determined by an appraisal, APHIS said. Appraisals will be reported on forms furnished by APHIS. The amount of indemnity paid, together with the amount for net salvage the owner or contractor received, if any, may not exceed the appraised fair market value of the eggs.

Salvage refers to any payment the owner or contractor may receive from a third party, such as a breaker facility for the eggs. Such facilities may purchase the eggs and then pasteurize them to kill the HPAI virus so that the eggs can be used in food products. APHIS will subtract the amount of any such payments made to the owners or contractors from the indemnity amount paid out by APHIS.

Biosecurity plans

In some instances during the 2014-15 outbreak, poor biosecurity practices may have led to HPAI introduction or spread within and among some commercial poultry facilities. The interim rule requires owners and contractors to provide a statement that they had a biosecurity plan in place at the time HPAI was detected in their facilities in order to receive indemnity.

This includes a list of several measures a biosecurity plan should include in order to be effective.

First, personnel working at such a facility should be given appropriate biosecurity training and should be subject to certain biosecurity requirements, e.g., showering and changing upon, or prior to, arriving at the facility. The biosecurity plan should also include measures to prevent HPAI introduction via vehicles and equipment. A “line of separation” should be maintained, beyond which nothing should cross that could introduce the virus to poultry houses. Measures to control wild birds, rodents and insects should be implemented, and the facility should have a source of clean water.

These actions are being taken in an effort to solidify policies surrounding the payment of indemnity and further strengthen biosecurity adherence at poultry operations. In addition, APHIS is requesting comments and ideas through this rule on how the agency should develop a stronger accountability system for monitoring industry biosecurity practices.

Public comments on the interim rule will be accepted for 60 days following publication in the Federal Register. Comments may be submitted by either of the following methods:  

Federal eRulemaking Portal: http://www.regulations.gov/#!docketDetail;D=APHIS-2015-0061.

Postal mail/commercial delivery:  Send comments to Docket No. APHIS-2015-0061, Regulatory Analysis & Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238.

The interim rule will be effective upon publication in the Federal Register.

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