Farm Progress

Comments sought on new proposed approach to indemnity valuation and standardizing allowances for appraisals.

Jacqui Fatka, Policy editor

September 8, 2022

4 Min Read
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MORE MONEY: USDA announces details of offering 80% indemnity payments for livestock producers who had to depopulate animals during COVID pandemic meat processing plant shutdowns.iStock Getty Images

USDA’s Animal and Plant Health Inspection Service published an advance notice of proposed rulemaking to solicit public comments on a new approach to indemnity valuation and a new indemnity framework. The agency says this approach aims to standardize and provide greater consistency to the livestock indemnification process.

The ANPR describes two structural changes to the indemnity regulations. The first is the use of an annual indemnity value table to standardize the indemnification process and resolve discrepancies between disease programs. The current regulations for valuing animals for indemnification vary from species to species and, in some cases, from disease to disease within the same species.

Under the new approach outlined in the ANPR, APHIS would collaborate with other USDA agencies—including the Farm Service Agency’s Livestock Indemnity Program—to develop harmonized USDA indemnity values, along with the methodology to determine them. These values would be published online annually.

Second, the ANPR describes an approach to standardize allowances for an appraisal when an indemnity value cannot be calculated using the tables or when a producer elects to appeal the indemnity value based on extraordinary circumstances surrounding the animals at issue. This approach would resolve known challenges with indemnification based on fair market appraisal by an appraiser, APHIS says.

The ANPR also outlines the potential consolidation of all APHIS indemnity regulations into a single section of the Code of Federal Regulations. This would harmonize how APHIS addresses value determination, compensation for cleaning and disposal, and other related issues across existing programs.

APHIS is publishing the ANPR to solicit comments to inform future rulemaking. Specifically, APHIS says it is seeking comments on the standardized approach to indemnity valuation and how it may affect members of the public, as well as any suggestions to improve it. USDA is also seeking input on whether any species or commodity classes would not benefit from consolidation, whether consolidation would significantly alter disease management, and any other concerns.

Part 50 provides conditions for the payment of indemnity for animals destroyed because of tuberculosis; part 51 for animals destroyed because of brucellosis; and part 52 for swine destroyed because of pseudorabies. Part 53 provides conditions for the payment of indemnity for animals destroyed because of foreign animal diseases, such as foot-and-mouth disease, contagious pleuropneumonia, Newcastle disease, HPAI, infectious salmon anemia, spring viremia of carp, as well as any other communicable disease of livestock or poultry that the Secretary decides constitutes an emergency and threatens the livestock or poultry of the United States. Part 54 contains our regulations governing indemnification for scrapie in sheep and goats, while part 55 contains our regulations governing indemnification for chronic wasting disease in captive cervids. Finally, part 56 contains our regulations governing indemnification for poultry destroyed because of H5/H7 low pathogenic avian influenza.

Industry plans to respond

A spokeswoman for the National Pork Producers Council says NPPC appreciates USDA publishing this advanced notice of proposed rulemaking as a way to gather feedback from the livestock industry and other stakeholders. “NPPC will fully assess this approach and its impact on pork producers. It’s important to engage on many fronts to address issues related to foreign animal disease prevention and response,” the spokeswoman says.

Ken Klippen, president of the National Association of Egg Farmers, says the egg industry will be closely watching how the proposal compares to current regulations for indemnities for layers and their eggs.

During the 1983-84 low path avian influenza outbreak, LPAI reverted to HPAI (high path avian influenza) costing USDA indemnity payments in the tens of millions of dollars. In 2009 when LPAI occurred, and after the 2006 promulgation of 9 CFR Part 56.3 and Part 56.4, the rapid depopulation of flocks reduced the indemnity payouts comparatively. 

Since September 2006, the egg industry has relied on 9 CFR Part 56.3 which does the following: destruction and disposal of infected or exposed to H5/H7 LPAI; destruction of any eggs destroyed during testing of poultry for H5/H7 LPAI during an outbreak of H5/H7 LPAI; cleaning and disinfection of premises, conveyances and materials that came into contact with poultry that were infected with or exposed to H5/H7 LPAI and based on a specified percentage of costs eligible for indemnity with the administrator authorized to pay 100% of the costs. 

“The egg industry will only accept this ANPR if APHIS is clearly indemnifying as already outlined in 9 CFR part 56.4 (a) the true value of egg layers which includes the eggs those layers would have laid during the course of their lives."

The National Chicken Council also says it is reviewing the proposal and plans to make comments.

 

 

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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