Summary

Pursuant to a congressional request, GAO reviewed the methodology the Department of Agriculture (USDA) used in calculating indemnity rates for destruction of poultry flocks under the avian influenza eradication program.

GAO found that USDA originally established per-bird indemnity rates for all types of poultry to compensate producers for production costs incurred at the time their flocks were destroyed. However, USDA increased the per-bird indemnity rates to reflect increases in production costs for all poultry other than egg-producing hens, referred to as layers. Because these layers generate revenue continuously and could not be replaced immediately, USDA decided to change per-bird indemnity rates for layers to fairly compensate producers. GAO concluded that producers of poultry that was raised for slaughter were indemnified at least as well as layer producers even though a different basis was used for setting the per-bird indemnity rates.