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APHIS Urged to Review Indemnification Calculators for TB and Brucellosis Eradication Programs

January 6, 2012

NMPF recently commented on the U.S. Department of Agriculture (USDA) Animal and Plant Health Inspection Service (APHIS) Veterinary Service (VS) proposals for “Appraisals Using Beef and Dairy Calculators” and “Options for Federal Indemnity Payments Veterinary Services Bovine Tuberculosis and Brucellosis Programs.”

Based on the USDA “Appraisals Using Beef and Dairy Calculators” proposal, the milk cow appraisal calculator appears to generate a reasonable engineered price. It depreciates a recently freshened first-calf cow until it is a cull cow, with logical adjustments for higher productivity and, through productivity, for breed. In comments to USDA, NMPF states that the milk cow appraisal calculator appears to overstate this depreciation in the first year or two, and encourage USDA to investigate this possibility. The dairy replacement appraisal calculators are a bit more ad hoc, because they rely on less consistent information, but also seem to be reasonable. Nevertheless, NMPF encouraged USDA to examine all these models’ ability to predict actual market prices (especially if that was not part of the original validation process) and to periodically review the models’ accuracy, especially for appraising whole herds.

One important purpose of the indemnity payments is fair compensation of producers for the cost they bear for the public’s benefit and fairness demands effective valuation. Providing fair market value for livestock is also important for eliminating an owner’s incentive to hide an infection or to resist taking appropriate steps for wider animal health. In that light, NMPF commented on four options presented in the USDA “Options for Federal Indemnity Payments Veterinary Services Bovine Tuberculosis and Brucellosis Programs” proposal.

NMPF suggested that enhancement of the management tools available for producers who have a tuberculosis or brucellosis infected animal is required to advance this disease eradication program. Traditionally, USDA and states have relied on whole herd depopulation as the preferred response to maintain state status. The recent TB experience in California, where a single TB-infected animal is identified out of thousands of animals, demonstrates the need for a viable test-and-cull strategy. At the same time, whole herd depopulation must remain in the suite of management strategies. A linchpin to these efforts is an effective animal ID system.

Full comments are available on the NMPF website.