United States Department of AgricultureAnimal and Plant Health Inspection Service

Compensation for Livestock Diseases

in the United States

Steve WeberStephen Ott

July 16, 2008

United States Department of AgricultureAnimal and Plant Health Inspection Service

Compensation for Livestock Diseases

• Funding authorities• Federal regulations • Federal/State cooperation• Appraisal• Indemnity• Other compensated items• Compensation process in emergency outbreak• Compensation in perspective of disease control• Evolution of compensation policy

United States Department of AgricultureAnimal and Plant Health Inspection Service

Funding Authorities

•Congressional authorization•Required for annual budgets including:

– Surveillance– Diagnostics– Disease control operations– Compensation

•Appropriation for specific disease control programs

•Commodity Credit Corporation•Quasi government agency•Office of Management & Budget serves as the gatekeeper to the funds

– Allocated compensation funds can roll over to next fiscal year

•APHIS’ operational budget generally is not used for compensation

United States Department of AgricultureAnimal and Plant Health Inspection Service

Federal RegulationsAnimal Disease Compensation

• Title 9 of Code of Federal Regulations: Animals and Animal Products

• http://www.access.gpo.gov/nara/cfr/cfr-table-search.html#page1

• Part 50: tuberculosis• Part 51: brucellosis• Part 52: swine pseudorabies• Part 53: foreign animal diseases • Part 54: sheep scrapie• Part 55: chronic wasting disease• Part 56: H5/H7 low pathogenic avian influenza

United States Department of AgricultureAnimal and Plant Health Inspection Service

Livestock Disease Categories• Program Disease (9 CFR – Parts 50-52, 54-56)

• Endemic • Of significant economic concern

• Endemic– Tuberculosis in cattle– Chronic Wasting Disease in farm raised deer and elk

• Foreign Animal Disease (9 CFR – Part 53, Part 56 (HPAI)• Diseases currently not in the U.S.• Typically are highly contagious

– Thus potential for large economic impact• Ex: Foot & Mouth Disease, HP Avian Influenza

United States Department of AgricultureAnimal and Plant Health Inspection Service

Federal—State Cooperation

• States Departments of Agriculture have the authority to order destruction of animals for domestic/endemic diseases• Quarantines generally placed by State• Depopulations are usually voluntary• Federal government pays indemnity

• Federal government can order destruction of animals to control a Foreign Animal Disease

United States Department of AgricultureAnimal and Plant Health Inspection Service

Program DiseaseIndemnity Rates

• Provided in 9 CFR, Parts 50-56

• Generally 100% Fair Market Value - with some exceptions• 95% for Chronic Wasting Disease (CWD)• $3000 maximum for cattle—tuberculosis • Commercial poultry LPAI 100% if in National Poultry

Improvement Program (NPIP), 25% if not in NPIP• Allows for appraisal process to determine Fair Market Value• Off-set by other payments – insurance, salvage, State indemnity

United States Department of AgricultureAnimal and Plant Health Inspection Service

Appraisal Process• Based upon fair market value of healthy animals • If whole herd depopulations generally private appraiser• If few animals then local federal veterinary official or

Appraisal-Indemnity-Compensation Specialist ( Dr. Stephen Ott) supplies values• Developed using appraisal calculators

• Poultry Appraisal• Standardized Rates for Commercial Poultry

United States Department of AgricultureAnimal and Plant Health Inspection Service

Other Items Compensated for:

•Contract poultry growers•Based upon percentage of contract completed minus any payment already received from the poultry company

•Cleaning & Disinfection•Can be expensive•Critical to avoid re-infection

United States Department of AgricultureAnimal and Plant Health Inspection Service

Compensation Process in Emergency Outbreak

Incident Command System

Incident Commander

Planning Operations Logistics Finance

Appraisal

United States Department of AgricultureAnimal and Plant Health Inspection Service

Compensation in perspective

•Elements of Disease Control•Purpose: Shared Public/Industry Goal

– Recognize that in many countries affects more than agriculture

•Authority/Policy/Budget•Biosecurity – vaccinations, quarantine•Surveillance•Diagnostics•Preparedness/Mitigation measures•Compensation:

– Decrease:• Time to recognize/report disease• Time to become disease free

•Progress towards achieving goal - Information

United States Department of AgricultureAnimal and Plant Health Inspection Service

Evolution of Compensation Policy

•Historically:•Herd/Flock Plans•Appropriate disposal•Cleaning and disinfection•Scraping/removal of manure•Proper paperwork

•More Recently: Infectious Salmon Anemia, LP/HPAI

•Surveillance/Reporting•Biosecurity •Adequate diagnostic measures

United States Department of AgricultureAnimal and Plant Health Inspection Service

Evolution of Compensation Policy•Responsibility:

Individual - Industry – Government – Govt/Industry/Insurance – Regional/Global Organizations•Amount:

No compensation – Stated Amount – Fair Market Value – Capitalize on Product Value

•Limiting ExtentQuarantine – Zoning – Business Continuity

•Continued Consideration:Animal Health – Public Health - Animal Welfare