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RCED-85-36 1 (1984-10-11)

handle is hein.gao/gaobabnnb0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 RE O(H)A4 F S COMMUNITY, AND E:CONOMIC DEfVELOPMENT DIV ISION October 11, 1984 B-216553 The Honorable George E. Brown, Jr. Chairman, Subcommittee on Department Operations, Research and Foreign Agriculture Committee on Agriculture House of Representatives The Honorable Tom Harkin Chairman, Subcommittee on Livestock, Dairy and Poultry 125410 Committee on Agriculture House of Representatives The Honorable Jim Olin House of Representatives Subject: Information on Indemnity Payments in USDA's Avian Influenza Eradication Program (GAO/RCED-85-36) In your April 20, 1984, letter, you asked that we review the methodology the U.S. Department of Agriculture (USDA) used in calculating indemnity rates for destruction of poultry flocks under the avian influenza eradication program. You asked that we advise you of any inequities that might have occurred as a result of the Department's indemnification procedures. As agreed with Representative Olin's office, this report provides information on the Department's procedures for setting the indemnity rates, its reasons for changing the procedures, an outside agricultural econ- omist's views on the Department's procedures, and our comparison of the indemnity rates for egg-producing hens (layers) and chick- ens and turkeys raised for slaughter (broilers and nonbreeder turkeys). We found that USDA originally established per-bird indemnity rates for all types of poultry to compensate producers for pro- duction costs incurred at the time their flocks were destroyed. However, as a result of comments from the Pennsylvania layer industry, USDA increased the per-bird indemnity rates to reflect increases in production costs for all poultry other than layers. Because layers (unlike broilers and turkeys) generate revenue con- tinuously and could not be replaced immediately, USDA decided to change per-bird indemnity rates for layers. The revised layer (022901)

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