USDA Explains Loss Adjustment Procedures for Aflatoxin

August 27, 2012 06:17 AM

USDA's Risk Management Agency (RMA) has issued a "Loss Adjustment Procedures for Aflatoxin" fact sheet, which explains the importance of testing grain for insurance purposes. The document states if you think your insured crop has aflatoxin, it's important to contact your crop insurance agent before you harvest the grain, put it in storage or deliver it for sale.

Additional information on Aflatoxin Testing.

RMA says because aflatoxin can worsen in storage, aflatoxin losses are only insurable if:

  • the grain is tested at an approved testing facility before being moved into commercial or on-farm storage; or
  • your insurance provider asks you to leave representative sample areas of the unharvested crop for taking samples for testing.

Losses not covered under the crop insurance policy include:

  • losses due to an increase in the aflatoxin level while in farm storage; and
  • losses that cannot be determined because proper testing was not completed.

RMA says the Food and Drug Administration, or another government agency, may require the destruction of crops when aflatoxin is present with more than 300 ppb. "If you destroy the crop in an acceptable manner, you will be paid for a full loss. Please ask your approved insurance provider about acceptable ways to destroy your crop before doing so," states RMA.

If the crop qualifies for quality adjustment (test results are over 20.0 ppb), you may receive the actual reduction in value (RIV) if:

  • You deliver your crop to a buyer directly from the field; or
  • You put it in commercial storage without the crop going into farm storage, and the crop is sold not later than 59 days after the calendar date of the end of the insurance period to a disinterested third party.

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