[Federal Register Volume 83, Number 158 (Wednesday, August 15, 2018)]
[Rules and Regulations]
[Pages 40433-40438]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17554]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 83, No. 158 / Wednesday, August 15, 2018 /
Rules and Regulations
[[Page 40433]]
DEPARTMENT OF AGRICULTURE
Animal and Plant Health Inspection Service
9 CFR Part 53
[Docket No. APHIS-2015-0061]
RIN 0579-AE14
Conditions for Payment of Highly Pathogenic Avian Influenza
Indemnity Claims
AGENCY: Animal and Plant Health Inspection Service, USDA.
ACTION: Final rule.
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SUMMARY: We are adopting as a final rule, with changes, an interim rule
that amended the regulations pertaining to certain diseases of
livestock and poultry to specify conditions for payment of indemnity
claims for highly pathogenic avian influenza (HPAI). The interim rule
provided a formula allowing us to split such payments between poultry
and egg owners and parties with which the owners enter into contracts
to raise or care for the eggs or poultry based on the proportion of the
production cycle completed. That action was necessary to ensure that
all contractors are compensated appropriately. The interim rule also
clarified an existing policy regarding the payment of indemnity for
eggs destroyed due to HPAI and required a statement from owners and
contractors, unless specifically exempted, indicating that at the time
of detection of HPAI in their facilities, they had in place and were
following a biosecurity plan aimed at keeping HPAI from spreading to
commercial premises.
DATES: Effective on August 15, 2018, we are adopting as a final rule
the interim rule published at 81 FR 6745-6751, on February 9, 2016. The
amendments in this final rule are effective on September 14, 2018.
FOR FURTHER INFORMATION CONTACT: Dr. Denise Brinson, Senior
Coordinator, National Poultry Improvement Plan, VS, APHIS, 1506
Klondike Road, Suite 101, Conyers, GA 30094-5104; (770) 922-3496.
SUPPLEMENTARY INFORMATION:
Background
In an interim rule \1\ effective and published in the Federal
Register on February 9, 2016 (81 FR 6745-6751, Docket No. APHIS-2015-
0061), we amended the regulations pertaining to certain diseases of
livestock and poultry to specify conditions for payment of indemnity
claims for highly pathogenic avian influenza (HPAI). The interim rule
provided a formula allowing us to split such payments between poultry
and egg owners and parties with which the owners enter into contracts
to raise or care for the eggs or poultry based on the proportion of the
production cycle completed. That action was necessary to ensure that
all contractors are compensated appropriately. The interim rule also
provided for the payment of indemnity for eggs required to be destroyed
due to HPAI, thus clarifying an existing policy. Finally, the interim
rule required owners and contractors, unless specifically exempted, to
provide a statement that at the time of detection of HPAI in their
facilities, they had in place and were following a biosecurity plan
aimed at keeping HPAI from spreading to commercial premises.
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\1\ To view the interim rule, supporting document, and the
comments we received, go to http://www.regulations.gov/#!docketDetail;D=APHIS-2015-0061.
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Comments on the interim rule were required to be received on or
before April 11, 2016. We received 18 comments by that date. They were
from industry stakeholders, an animal welfare organization, and
individuals. The issues raised by the commenters are discussed below.
Apportionment Formula
A number of commenters expressed concerns about the methodology set
out by the interim rule for determining how to apportion funds between
owner and contractor. These concerns mostly pertained to equitability
and transparency, with some addressing specific sectors of the poultry
industry.
Several commenters stated that the formula is flawed because it
effectively apportions zero value to the preparatory work done by the
contractor prior to the beginning of the production cycle. According to
the commenters, contractors incur costs prior to receiving the birds,
e.g., for bedding, fuel, and the labor required to prepare the
facilities. An indemnity payment, even if made early in the production
cycle, may not be sufficient for many contractors to recover these up-
front costs.
The Animal Health Protection Act (7 U.S.C. 8301) authorizes the
Animal and Plant Health Inspection Service (APHIS) to make payments for
birds destroyed due to HPAI based on the fair market value of the
birds. While owners and contractors may have additional costs
associated with the raising of the birds, the determination of fair
market value accounts for the production practices and the inputs
necessary to raise the species of bird. The Animal Health Protection
Act does not, however, authorize us to cover all losses from HPAI, so
costs incurred for certain supplies and labor performed prior to
confirmation of disease may not be covered.
One of the commenters cited above further stated that, due to the
initial costs contractors incur, losses for a contractor resulting from
an outbreak may exceed the value of the flock. In the commenter's view,
the distribution formula set out in the February 2016 interim rule does
not accurately reflect the relative impacts of an HPAI outbreak on
owner and contractor. The commenter recommended that, in determining
the value of the loss to the contractor, APHIS should use a 5-flock
average for each impacted contractor operation, based on the settlement
sheets provided by the owner to the contractor.
The February 2016 interim rule set out a formula whereby the
apportionment of indemnity payments to owners and contractors was based
on the duration in days of the contract, as signed prior to the disease
outbreak. The interim rule did include a provision, however, stating
that if determining the length of service contract is impractical or
inappropriate, then APHIS may use other methods as deemed appropriate.
This provision allows APHIS, when appropriate, to use previous flock
averages to assist in determining the contractor's portion of the
indemnity payment, as the commenter suggested.
A commenter stated that contractors' loss of income resulting from
bird disposal and cleanup following
[[Page 40434]]
depopulation should be factored into our formula. Noting that
contractors are often directly involved with the bird disposal, the
commenter stated that affected growers will lose not only the income
from the flock affected by and destroyed because of HPAI, but also
income from one or more flocks that cannot be raised on the premises
due to the shutdown time required. While such a shutdown will also
impact the owners somewhat, they can minimize economic losses by
increasing placement with unaffected contractors. The contractor, who
has no such recourse, therefore would bear the greater impact from such
a shutdown, a difference that should be reflected in the apportionment
of indemnity payments.
Under the Animal Health Protection Act, APHIS can make indemnity
payments of up to 100 percent of the fair market value for live birds
that must be destroyed because of HPAI. Further, the Act also
authorizes APHIS to pay for certain costs associated with cleanup,
disinfection, and disposal of birds and materials, such as bedding and
litter, as necessary to eliminate the virus. The regulations in 9 CFR
53.2 and 53.7 also provide for such payments. While the Animal Health
Protection Act does not allow APHIS to compensate owners and
contractors directly for loss of income due to a shutdown of
operations, the range of activities for which we do pay indemnities
will go some way towards offsetting such costs.
Commenters stated that our indemnity apportionment formula should
take the type and age of the birds into account. A standard cost
division for all poultry is not equitable, it was suggested, because
some birds require more of an investment than others. One commenter
stated that specific provisions should be added to the rule to address
HPAI losses experienced by breeder hen and pullet contract growers
because their flocks are kept for much longer durations than broiler
flocks.
These comments appear to be directed more toward our methodology
for determining fair market value of the birds rather than the formula
we use for apportioning indemnity payments between owners and
contractors. The former is beyond the scope of the present rulemaking.
That said, our formulas for determining the fair market value of
destroyed poultry for the purpose of indemnifying owners and growers
already take into account such factors as the type, age, and production
potential of the birds. These formulas, also referred to as appraisal
calculators, are developed specifically for each segment of the
industry and species of bird.
Transparency was another issue raised by the commenters. A
commenter suggested that we needed to gather more data in order to
devise a fair method of apportioning indemnity payments between owners
and contractors. Another commenter suggested that we should update and
make more transparent our formulas for calculating indemnities.
We apportion indemnity payments between owner and contractor based
on the terms of the contract between the two parties and the duration
of the period during which the contractor possessed the birds or eggs.
Thus, the amount of the indemnity received by the contractor from APHIS
will depend largely on the terms of the contract. APHIS does not play a
role in those contractual arrangements. Our indemnity calculation
formulas, referred to by the second commenter above, are the means by
which we determine the fair market value of birds and eggs destroyed
due to HPAI and, thereby, the total amount of compensation due the
indemnified party. As we have already noted, addressing these
calculators is beyond the scope of the current rulemaking; however, the
calculators are subject to continual review to ensure that the economic
assumptions on which they are based are correct and that they
adequately reflect standard industry practices.
Finally, one commenter stated that APHIS should indemnify farms
that are not infected with HPAI but are indirectly affected by an HPAI
outbreak. The commenter suggested that such farms may be affected
economically by being unable to restock if located in a quarantine or
control zone.
The Animal Health Protection Act authorizes APHIS to make payments
for birds or eggs destroyed due to HPAI based on their fair market
value. APHIS recognizes that some owners and contractors whose flocks
do not have HPAI may still have limited ability to place birds or eggs
due to movement control restrictions and, consequently, may face
financial hardships. However, the Animal Health Protection Act only
authorizes payment of indemnity to owners and contract growers of
diseased birds or eggs that are destroyed and not to owners or
contractors whose premises were only indirectly impacted.
Biosecurity
The February 2016 interim rule contained a requirement stating
that, in order to be eligible to receive indemnity payments, both
poultry or egg owners and contractors had to provide to APHIS a
statement that at the time of detection of HPAI in their facilities,
they had in place and were following a biosecurity plan. A list of
recommended biosecurity measures was also included, as well as
exemptions from the biosecurity statement requirement for certain
relatively small facilities. Some commenters questioned whether the
requirements were sufficiently stringent overall, while others focused
more specifically on the exemptions for smaller facilities.
The various issues raised by these commenters, along with changes
we are making in response to some comments, are discussed in detail
below. One change we are making for the sake of clarity is to add a
definition to Sec. 53.1 of poultry biosecurity plan, which we define
in this final rule as a document utilized by an owner and/or contractor
describing the management practices and principles that are used to
prevent the introduction and spread of infectious diseases of poultry
at a specific facility.
One commenter stated that self-certification is not a reliable
method for ensuring the use of best practices in biosecurity on
poultry- or egg-producing premises because the self-certifying owners
and growers will have an economic interest in ensuring their
certifications. The commenter recommended that APHIS enforce
biosecurity requirements by conducting unannounced spot inspections
and, when violations are found, subjecting the violators to serious
financial consequences.
We believe the commenter has raised some legitimate concerns about
the efficacy of self-certification. In this final rule, we are adding
provisions for verifying that the owner and/or contractor does have a
biosecurity plan in place and that the plan is, in fact, being
implemented. Those provisions are discussed in greater detail below.
Some commenters advocated for more rigorous biosecurity
requirements. One commenter suggested that even if APHIS declines to do
targeted inspections, it should at least require that there is a
biosecurity plan in place prior to any HPAI outbreak or destruction of
animals. The commenter stated that allowing owners and contractors to
meet the requirement after an outbreak would provide a huge economic
incentive to misrepresent the state of biosecurity planning at a
facility in its attestation. Requiring a biosecurity statement prior to
an outbreak, on the other hand, would motivate owners and contractors
to address biosecurity planning earlier. Another commenter suggested
that facilities subject to the requirement should have had a plan in
place for 6 months prior to the outbreak,
[[Page 40435]]
have had no lapses during that period, have trained their employees in
biosecurity, and be liable for penalties for submitting false claims.
Since the publication of the February 2016 interim rule, we have
taken steps to strengthen our biosecurity requirements. In a notice \2\
published in the Federal Register on May 5, 2017, and effective on July
5, 2017 (82 FR 21187-21188, Docket No. APHIS-2016-0103), we advised the
public of our determination to update the National Poultry Improvement
Plan (NPIP) Program Standards. The NPIP Program Standards is a document
that provides detailed information on how to meet the requirements
contained in the NPIP regulations. The NPIP Standards can be amended
via notice rather than through a lengthy rulemaking process, thereby
providing us with the flexibility to ensure that program requirements
remain in sync with current industry practices. The May 2017 final
notice followed an earlier notice of availability, upon which we did
not receive any public comments. Among other changes, our updates to
the NPIP Program Standards included the addition of a set of 14
biosecurity principles addressing such issues as training and
biosecurity protocols for farm personnel; maintaining a line of
separation between the poultry house(s) and the birds inside from any
potential disease sources; control of birds, rodents, and insects;
procedures for maintaining clean water supplies; and procedures for
auditing biosecurity plans. A facility's biosecurity plan must address
all 14 principles in order to ensure that it complies with our
requirements.
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\2\ To view the notices and the Program Standards, go to http://www.regulations.gov/#!docketDetail;D=APHIS-2016-0103.
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The auditing process that we have developed as one of the 14
biosecurity principles addresses concerns expressed by the commenters
regarding the need to have a biosecurity plan in place before a
facility is affected by HPAI. Facilities will be audited at least once
every 2 years or a sufficient number of times during that period to
satisfy their Official State Agency (OSA),\3\ a term we define in 9 CFR
145.1 and 146.1 as the State authority we recognize as a cooperator in
the administration of NPIP requirements, that the facility's
biosecurity plan complies with our 14 biosecurity principles, i.e.,
with the NPIP Standards. The audit will include, but may not be limited
to, an evaluation of the biosecurity plan itself and documentation
showing that the plan is being implemented.
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\3\ We note that the State of Hawaii does not participate in the
NPIP or have an OSA as defined in Sec. Sec. 145.1 and 146.1. Audits
on facilities in Hawaii may be performed by APHIS or an APHIS
representative.
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To be recognized as compliant with our biosecurity principles and
eligible for indemnity, owners and/or contractors whose biosecurity
plans fail the audit described above must have a check audit performed
by a team appointed by the National NPIP Office and must demonstrate
they have implemented applicable biosecurity measures.
The auditing procedures are described in a new paragraph (e) that
we are adding to Sec. 53.11 in this final rule and in greater detail
in the NPIP Program Standards.
A number of commenters opposed exempting smaller facilities from
the biosecurity certification requirement. It was stated that weak
biosecurity at a facility of any size may result in the spread of HPAI
and that some facilities that the interim rule exempted from the
biosecurity requirement were, in fact, affected during the 2014-2015
HPAI outbreak. One commenter stated that the flock size thresholds for
exempted facilities needed to be lowered considerably. According to the
commenter, the bird density on some of the exempted facilities was
still high enough to pose a risk of spreading HPAI.
While it is true that weak biosecurity on a farm of any size could
lead to spread of disease, the farms that were affected during the
2014-2015 outbreak were overwhelming large commercial facilities. There
are approximately 18,900 operations that will be subject to the
biosecurity statement requirement, out of 233,770 poultry producers in
the United States. Those 18,900 operations, however, produce or house
approximately 99 percent of the poultry in the United States. Exempting
the smaller facilities, therefore, allows us to focus our resources on
the operations that raise or house 99 percent of the nation's poultry
supply. While bird density on some smaller operations may be high
enough to pose a risk of spreading HPAI due to environmental
contamination when biosecurity is lacking, as noted above, 99 percent
of the nation's poultry reside and are raised on non-exempt operations.
Lowering the flock-size threshold would increase the regulatory burden
on small producers, which were not a major contributing factor in
disease spread during the 2014-2015 HPAI outbreak. In addition, if the
small farms participate in the NPIP because they are selling poultry,
they would have to have a biosecurity plan to comply with the NPIP
Program Standards.
In the preamble to February 2016 interim rule, we had stated that
an additional reason for our focus on large facilities is that their
operators had suffered the most devastating impacts during the 2014-
2015 outbreak. A commenter disputed that rationale, stating that
because smaller contractors may have lost their entire flocks to
depopulation, they may have been affected more adversely than the
owners with whom they contracted, since the latter may have other,
unaffected contractors with whom to place their products.
While the loss of any size flock adversely affects the contractor,
all flocks that were infected by HPAI during the 2014-2015 outbreak
were completely depopulated, including those owned by large-scale
producers. During the 2014-2015 HPAI outbreak, there were 21 infected
backyard flocks totaling approximately 10,000 birds versus 211
commercial flocks totaling approximately 50 million birds. In the
aggregate, then, the impact on large commercial producers was much
greater.
Furthermore, in some cases, depopulation may also have greater
impacts on individual commercial farms than on smaller facilities.
Smaller flock owners and contractors are more likely to be diversified.
A small contract grower with 500 birds is unlikely to be able to make a
living on selling the eggs or the meat from those birds. For that
reason, he or she may have other occupations or businesses or may raise
other livestock. Commercial producers, on the other hand, focus on
raising poultry, so depopulation of their flocks may leave them without
immediate alternatives.
A commenter questioned whether removing the exemption for smaller
facilities would really place an undue regulatory burden on the owners
and contractors operating such facilities. The commenter suggested that
due to the lower bird density on smaller facilities, owners and
contractors on small facilities may have to make fewer adaptations to
their existing biosecurity procedures than would those on larger ones.
That being the case, the commenter suggests, our biosecurity
requirements may not place a greater regulatory burden on smaller
facilities than on larger ones.
In our view, the biosecurity requirements included in this final
rule and the NPIP Program Standards would likely prove more burdensome
for smaller facilities than for larger ones. Many smaller owners and
contractors
[[Page 40436]]
raise free-range chickens. To mitigate the chance of exposure of their
flocks to HPAI and comply with our biosecurity principles, small
growers and contractors would likely have to construct enclosures to
prevent exposure to wild birds and waterfowl. With fewer birds on their
premises, smaller owners and contractors might have to spend more per
bird to construct such enclosures than would larger ones.
Miscellaneous
One commenter questioned our justification for publishing an
interim rule. The commenter stated that we did not provide evidence
that the Administrative Procedure Act's ``good cause'' exemption from
the regular notice and comment rulemaking process should have applied
to the interim rule. In the commenter's view, we did not clearly state
what public interest was served by our issuing an interim rule on an
emergency basis rather than a proposed rule followed by a final rule.
In our view, emergency action was necessary due to the possibility
of another HPAI outbreak occurring during the spring wild bird
migration season. In order to prevent the spread of the disease, we
needed to ensure timely and equable compensation to both owners and
contractors for flocks destroyed due to HPAI.
Finally, we are adding a new paragraph (f) to Sec. 53.11,
describing the notice-based procedure we will use to update the
biosecurity principles and other sections of the NPIP Program
Standards. Proposed updates will be announced to the public through a
Federal Register notice in accordance with the NPIP regulations in 9
CFR 147.53(e).
Therefore, for the reasons given in the interim rule and in this
document, we are adopting the interim rule as a final rule, with the
changes discussed in this document.
This final rule also affirms the information contained in the
interim rule concerning Executive Orders 12372 and 12988.
Executive Orders 12866, 13563, 13771 and Regulatory Flexibility Act
This action has been determined to be significant for the purposes
of Executive Order 12866 and, therefore, has been reviewed by the
Office of Management and Budget.
We have prepared an economic analysis for this rule. The economic
analysis provides a cost-benefit analysis, as required by Executive
Orders 12866 and 13563, which direct agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, and equity). Executive Order 13563 emphasizes the importance
of quantifying both costs and benefits, of reducing costs, of
harmonizing rules, and of promoting flexibility. The economic analysis
is summarized below. Copies of the full analysis are available on the
Regulations.gov website or by contacting the person listed under FOR
FURTHER INFORMATION CONTACT.
This final rule is considered an Executive Order 13771 regulatory
action. In accordance with guidance on complying with Executive Order
13771, the single primary estimate of the cost of this rule is $9.3
million, the mid-point estimate annualized in perpetuity using a 7
percent discount rate. Details on the estimated costs of this final
rule can be found in the rule's economic analysis.
Regulatory Flexibility Act
APHIS is adopting as a final rule, with changes, an interim rule
that amended the regulations pertaining to certain diseases of
livestock and poultry to specify conditions for payment of indemnity
claims for HPAI. The interim rule provided a formula allowing us to
split such payments between poultry and egg owners and parties with
which the owners enter into contracts to raise or care for the eggs or
poultry based on the proportion of the production cycle completed. The
interim rule also clarified an existing policy regarding the payment of
indemnity for eggs destroyed due to HPAI. The interim rule also
required a statement from owners (including independent growers) and
contractors (contract growers), unless exempt, indicating that at the
time of detection of HPAI in their facilities, they had in place and
were following a biosecurity plan aimed at keeping HPAI from spreading
to commercial premises. Under this final rule, we are removing the
self-certification and adding provisions for verifying that the owner
and/or contractor does have a biosecurity plan in place and that the
plan is, in fact, being implemented.
At the time of the most recent outbreak, the regulations in part 53
did not specify that the indemnity be split between owners and
contractors. When APHIS pays to compensate owners and contractors for
losses, that compensation should be distributed to parties who suffer
losses based on the terms of the contract. The vast majority of
contracts are expected to reflect the relative level of inputs or
investments of the parties who suffer losses.
Inadequate biosecurity measures may have led to HPAI introduction
or spread within and among some commercial facilities. Therefore, this
final rule also requires large owners and contractors to have in place,
at the time of detection of HPAI, and have been following a poultry
biosecurity plan that is compliant with the biosecurity standards
outlined in the NPIP Program Standards, in order to receive
compensation for claims arising out of the destruction of animals or
eggs destroyed due to an outbreak of HPAI. Note that the NPIP is a
cooperative Federal-State-Industry mechanism for controlling certain
poultry diseases.
The entities affected by this rule are U.S. facilities primarily
engaged in breeding, hatching, and raising poultry for meat or egg
production, and facilities primarily engaged in slaughtering poultry.
There were about 18,900 farms that would be subject to the provisions
of this rule in the 2012 Agricultural Census. Almost all commercial
operations raising broilers are contract growers.4 5
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\4\ MacDonald, J.M. Technology, Organization, and Financial
Performance in U.S. Broiler Production, EIB-126 USDA Economic
Research Service. June 2014.
\5\ 2011 USDA Agricultural Resource Management Survey, Version
4.
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The United States is the world's largest poultry producer and the
second-largest egg producer. The combined value of production from
broilers, eggs, and turkeys, and the value of sales from chickens in
2016 was $38.7 billion. In 2016, the United States exported poultry
meat valued at about $3.3 billion. Following the first HPAI findings in
December 2014, a number of trading partners imposed complete or partial
bans on shipments of U.S. poultry and poultry products. All but one of
these restrictions from the 2014-15 outbreak have since been lifted.
United States poultry and poultry product exports declined by about 31
percent from 2014 through 2016. Exports in 2017 were at approximately
the same level as 2016.
Broilers account for nearly all U.S. chicken consumption. Broiler
production and processing primarily occurs within highly integrated
production systems. Owners of the processing facilities also own the
birds that are processed and contract with growers (contract growers)
to raise those birds before processing. Expanded broiler production has
been made possible to a large extent by the vertically integrated
production system and through the use of production contracts.
Under the system of production contracts, the contractor normally
[[Page 40437]]
supplies the grow-out house with all the necessary heating, cooling,
feeding, and watering systems. The contractor also supplies the labor
needed in growing the birds. The owner normally supplies the chicks,
feed, veterinary medicines, and transportation. Contractors have
exclusive contracts with an owner and receive payment for the services
that they provide, with premiums and discounts tied to the efficiency
with which feed is converted to live-weight broilers, the minimization
of mortality, or the number of eggs produced. Specific contract terms
and the period covered can vary.
Embedded in the value of a bird at any point in time is the value
of inputs by both owners and contractors. Contractors' costs are more
or less fixed and are heavily committed early in the production cycle.
Prior to the publication of the interim rule, indemnity payments went
directly to the owner of the birds who, depending on the terms of the
contractual arrangement, might or might not have compensated the
contractor. It is important to finalize these regulations to share
indemnity payments between poultry owners and contractors, both of whom
have productive assets imbedded in the value of the bird.
APHIS' determination of the total amount of indemnity will remain
the same under the rule as before. However, to determine the
appropriate payment split between owner and contractor, APHIS may have
to examine contract specifics on a case-by-case basis. This rule does
not change the total amount of compensation paid in a given situation,
but will ensure equitable distribution of that compensation between the
owner and contractor. This rule benefits contractors who otherwise may
suffer uncompensated economic losses from participating in an
eradication program.
This rule also specifies the appropriate reference to eggs and a
description of the appraisal of the value of eggs destroyed due to
HPAI, simply clarifying existing practice for the indemnification of
destroyed eggs and will not change the total amount of any compensation
paid in a given future situation.
This final rule requires large owners and contractors to follow 14
industry-standard biosecurity principles. These principles are laid out
in the NPIP Program Standards. The vast majority of contractors have
some level of biosecurity in place on their operations, or were in the
process of voluntarily adopting biosecurity measures prior to the
implementation of the interim rule.
There are approximately 18,900 poultry operations that will be
subject to this requirement. There will be one-time costs and annual
costs for some poultry operations associated with this rule. One-time
costs include the development of a biosecurity plan, and equipment
purchases for those facilities that need to implement structural
biosecurity measures in order to be fully compliant with the NPIP
biosecurity principles. In addition, some producers will incur
additional recurring biosecurity training costs necessary to be
compliant with these regulations.
The biosecurity measures needed on a given operation are specific
to that operation. The vast majority of operations already have some
level of biosecurity in place on their operations, as a result of
contractual obligations, participation in existing government/industry
programs, compliance with existing regulations, or existing company
policies, thereby reducing the need for many poultry operations to
implement such measures from scratch. Most will be able to adhere to
the NPIP biosecurity principles by making small operational changes and
identifying and enumerating current standard operating procedures in
their biosecurity plans. Some poultry operations will have to implement
new operational or structural biosecurity measures in order to be fully
compliant with the NPIP biosecurity principles. Based on discussions
with industry, the measures that are most likely to involve changes for
poultry operations concern the biosecurity categories of training,
cleaning and disinfection of equipment, and the treatment of water. For
the few poultry operations that need additional vehicle cleaning and
disinfection, we estimate that the total one-time costs for equipment
will be from about $48,000 to $439,000.
The vast majority of affected poultry operations have access to
municipal water or a sufficiently deep well to meet the standards laid
out in the biosecurity principles. For poultry operations that need to
treat water we estimate that total one-time costs for equipment will
range from about $570,000 to $1.1 million. Many operations affected by
this rule will need to review their existing biosecurity plans and some
will need to develop new plans. We estimate that if 5 percent of
affected poultry operations need to develop new biosecurity plans and
95 percent need to review existing biosecurity plans, the total one-
time cost could be between $1.8 million and $2 million.
We estimate that the total additional annual biosecurity training
will cost from about $5.3 million to $9.3 million. In addition, annual
costs of sanitizers used in vehicle cleaning and disinfection could
range from about $2,550 to $10,200 in total for those few operations
needing additional cleaning and disinfection. Annual costs of chemicals
for water treatment could range from about $164,000 to $328,500 in
total for those few operations needing water treatment. We estimate
that the total cost of performing audits of the biosecurity plans at
all affected facilities will be between $2.8 million and $3.3 million.
Because these audits will be performed every 2 years, we assume that
one half of this cost is incurred each year.
This rule directly benefits poultry operations who otherwise may
suffer uncompensated economic losses from participating in an HPAI
eradication program. In addition, the development or revision of
biosecurity requirements may help to avert future HPAI outbreaks or
prevent the spread of disease during an outbreak. To the extent that
the rule contributes to the elimination of HPAI, entities at all levels
of the poultry industry as well as consumers will benefit over the long
term.
The 2015 HPAI outbreak had a substantial impact on the U.S. poultry
sector. The birds lost during the outbreak accounted for about 12
percent of the U.S. table-egg laying population and 8 percent of the
estimated inventory of turkeys grown for meat. Losses in the egg
sector, including layers and eggs, were estimated at nearly $1.04
billion. Layers accounted for a large majority of the birds lost due to
the outbreak with those losses compounded by extensive losses of layer
pullets, young birds that mature into replacement layers. Turkey losses
were magnified by the relatively large size of the birds and smaller
inventory. Almost 600,000 breeding turkeys were lost. Market and
breeding turkey losses due to the 2015 outbreak were estimated at $530
million.
Many destination markets for U.S. poultry commodities levied trade
restrictions on U.S. poultry exports, distorting markets and
exacerbating economic losses for all poultry sectors. Although very few
broilers were affected by the outbreak, trade restrictions decreased
overseas demand for broiler products and contributed to much lower 2015
and 2016 broiler prices compared to pre-outbreak levels.
APHIS paid indemnities for euthanized poultry and destroyed eggs as
well as paying for the euthanasia, cleaning and disinfection of poultry
premises and equipment, and testing for the HPAI virus to ensure
poultry farms can be safely repopulated. In total, the U.S. Department
of Agriculture spent about $850 million on these activities related to
the 2015 outbreak.
[[Page 40438]]
Executive Order 13175
This rule has been reviewed in accordance with the requirements of
Executive Order 13175, ``Consultation and Coordination with Indian
Tribal Governments.'' Executive Order 13175 requires Federal agencies
to consult and coordinate with Tribes on a government-to-government
basis on policies that have Tribal implications, including regulations,
legislative comments or proposed legislation, and other policy
statements or actions that have substantial direct effects on one or
more Indian Tribes, on the relationship between the Federal Government
and Indian Tribes or on the distribution of power and responsibilities
between the Federal Government and Indian Tribes.
APHIS has assessed the impact of this rule on Indian Tribes and
determined that this rule does not, to our knowledge, have Tribal
implications that require Tribal consultation under Executive Order
13175. If a Tribe requests consultation, APHIS will work with the
Office of Tribal Relations to ensure meaningful consultation is
provided where changes, additions and modifications identified herein
are not expressly mandated by Congress.
Paperwork Reduction Act
In accordance with section 3507(d) of the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.), the burden requirements included in
this final rule will be approved by the Office of Management and Budget
under control number 0579-0440.
E-Government Act Compliance
The Animal and Plant Health Inspection Service is committed to
compliance with the E-Government Act to promote the use of the internet
and other information technologies, to provide increased opportunities
for citizen access to Government information and services, and for
other purposes. For information pertinent to E-Government Act
compliance related to this rule, please contact Ms. Kimberly Hardy,
APHIS' Information Collection Coordinator, at (301) 851-2483.
List of Subjects in 9 CFR Part 53
Animal diseases, Indemnity payments, Livestock, Poultry and poultry
products.
Accordingly, the interim rule amending 9 CFR part 53 that was
published at 81 FR 6745-6751, on February 9, 2016, is adopted as a
final rule with the following changes:
PART 53--FOOT-AND-MOUTH DISEASE, PLEUROPNEUMONIA, RINDERPEST, AND
CERTAIN OTHER COMMUNICABLE DISEASES OF LIVESTOCK OR POULTRY
0
1. The authority citation for part 53 continues to read as follows:
Authority: 7 U.S.C. 8301-8317; 7 CFR 2.22, 2.80, and 371.4.
0
2. Section 53.1 is amended by adding a definition of Poultry
biosecurity plan in alphabetical order to read as follows:
Sec. 53.1 Definitions.
* * * * *
Poultry biosecurity plan. A document utilized by an owner and/or
contractor describing the management practices and principles that are
used to prevent the introduction and spread of infectious diseases of
poultry at a specific facility.
* * * * *
0
3. Section 53.10 is amended as follows:
0
a. By removing paragraph (g) introductory text;
0
b. By revising paragraph (g)(1); and
0
c. By adding an OMB citation at the end of the section.
The revision and addition read as follows:
Sec. 53.10 Claims not allowed.
* * * * *
(g)(1) Except as provided in paragraph (g)(2) of this section, the
Department will not allow claims arising out of the destruction of
animals or eggs destroyed due to an outbreak of highly pathogenic avian
influenza unless the owner of the animals or eggs and, if applicable,
any party that enters into a contract with the owner to grow or care
for the poultry or eggs, had in place, at the time of detection of
highly pathogenic avian influenza, and was following a poultry
biosecurity plan that meets the requirements of Sec. 53.11(e).
* * * * *
(Approved by the Office of Management and Budget under control
number 0579-0440)
0
4. Section 53.11 is amended as follows:
0
a. By adding paragraphs (e) and (f); and
0
b. By adding an OMB citation at the end of the section.
The additions read as follows:
Sec. 53.11 Highly pathogenic avian influenza; conditions for
payment.
* * * * *
(e)(1) The owner and, if applicable, the contractor, unless
exempted under Sec. 53.10(g)(2), must have a poultry biosecurity plan
that is approved by the Administrator. Approved biosecurity principles
are listed in the NPIP Program Standards, as defined in Sec. 147.51 of
this chapter. Alternative biosecurity principles may also be approved
by the Administrator in accordance with Sec. 147.53(d)(2) of this
chapter.
(2)(i) The biosecurity plan shall be audited at least once every 2
years or a sufficient number of times during that period to satisfy the
owner and/or contractor's Official State Agency that the plan is in
compliance with the biosecurity principles contained in the NPIP
Program Standards. The audit will include, but may not be limited to, a
review of the biosecurity plan, as well as documentation that it is
being implemented.
(ii) To be recognized as being in compliance with the biosecurity
principles and eligible for indemnity, owners and contractors who fail
the initial audit conducted by the NPIP Official State Agency must have
a check audit performed by a team appointed by National NPIP Office and
must demonstrate that they have implemented applicable biosecurity
measures. The team will consist of an APHIS poultry subject matter
expert, the Official State Agency, and a licensed, accredited, industry
poultry veterinarian.
(f) Proposed updates to the NPIP Program Standards will be
announced to the public through a Federal Register notice, as described
in Sec. 147.53(e) of this chapter.
(Approved by the Office of Management and Budget under control
number 0579-0440)
Done in Washington, DC, this 8th day of August 2018.
Greg Ibach,
Under Secretary for Marketing and Regulatory Programs.
[FR Doc. 2018-17554 Filed 8-14-18; 8:45 am]
BILLING CODE 3410-34-P