Q’s and A’s About

Citrus Canker Lost

Production Payments

Q. How do lost production payments differ from

tree replacement payments?

A. Tree replacement payments were first made available in 2000 to compensate eligible owners of commercial citrus groves who have had citrus trees

destroyed because of citrus canker. Lost production

payments go one step further by providing payments

to eligible producers for the recovery of production

income lost as a result of the removal of commercial

citrus trees to control citrus canker. Together, these

provisions, established by the U.S. Department of

Agriculture (USDA), will help reduce the economic

effects of the citrus canker quarantine on commercial

citrus growers.

Q. Why are lost production payments subject to

the availability of funding?

A. Because the Secretary of Agriculture has not

declared an extraordinary emergency with respect to

citrus canker in Florida, USDA’s Animal and Plant

Health Inspection Service (APHIS) does not have the

authority under the Plant Protection Act to establish a

compensation program to cover losses associated

with the current citrus canker outbreak. APHIS can

only provide payments for the recovery of lost production income if appropriated funds are made available for that purpose. Initial funding is available for

FY 2001.

Q. Who qualifies for lost production payments?

A. The owner of a commercial citrus grove may be

eligible to receive payments to recover income from

production lost as a result of the removal of citrus

trees to control citrus canker if the trees were

removed pursuant to a public order between 1986

and 1990 or on or after September 28, 1995.

Although the current citrus canker infestation was

detected in Florida on September 28, 1995, Florida

officials have identified five commercial citrus groves

in Manatee and Highlands Counties that were

destroyed to control citrus canker during a limited

outbreak of the disease that occurred between 1986

and 1990.

Q. What qualifies as a commercial citrus grove?

A. A commercial citrus grove is any establishment

maintained for the primary purpose of producing 

citrus fruit for commercial sale. Although the Florida

Department of Agriculture and Consumer Services’

(FDACS) Division of Plant Industry defines a commercial citrus grove as a “solid set planting of 40 or

more citrus trees,” APHIS’ definition of the term omits

the 40-tree threshold. APHIS recognizes that there

may be some small groves of fewer than 40 trees

that were, prior to being destroyed to control citrus

canker, maintained for commercial purposes. If, 

during the processing of an application for lost production payments, a question arises as to whether or

not a small grove was maintained for commercial purposes, APHIS will ask the grove owner to produce

documentation to support the claim. Supporting 

documents that APHIS will accept include records of

production expenses incurred, records of income

derived from direct sales to consumers or from the

consignment of harvested fruit to a packer or juicing

operation, and tax records showing losses or gains in

income resulting from the production and sale of fruit.

Q. How much money will eligible growers

receive?

A. Eligible commercial citrus producers will be paid

on a per-acre basis. The amount to be paid varies,

depending on the type of citrus trees that constitute a

particular grove. Per-acre payments for each variety

of citrus are listed below.

Citrus Variety Lost Production

Payment (per acre)

Grapefruit $3,342

Orange, Valencia, and tangerine $6,446

Orange, navel (including early $6,384

and midseason oranges)

Tangelos $1,989

Limes $6,503

Other mixed citrus $3,342

Q. Why are lost production payments made on a

per-acre basis, rather than a per-tree basis?

A. Output per acre is approximately the same

regardless of the number of trees per acre. Paying

on a per-tree basis would likely result in under

payments to growers with older groves and in overpayments to growers with newer groves. This is

because older groves normally have fewer, but larger

and more productive trees, while newer groves 

normally have more trees that are smaller and proFactsheet

Plant Protection and Quarantine December 2002

APHIS
duce less fruit per tree than larger trees. The current

trend in the industry is to plant more trees per acre;

smaller trees allow for easier harvesting, making it

easier to find workers willing to do this type of work.

Q. How were the per-acre payments calculated?

A. The payments are based on the per-acre loss in

the net present value of the destroyed groves. The

loss in value is the difference between the value of the

grove before it was destroyed minus the value of the

replanted grove for its entire productive life. Because

APHIS has already provided funds for tree replacement, the Agency has subtracted those payments

($26 times the number of trees per acre) from the lost

production value of each acre. While APHIS acknowledges that some groves may outproduce others for

any of several reasons, the Agency believes that the

approach and data used to calculate the per-acre payments are valid, appropriate, and consistent.

Q. How was the per-acre amount determined?

A. To determine the per-acre net income for each

variety of fruit, APHIS multiplied the yield (number of

boxes) per tree by the price per box, then subtracted

the production cost per tree to arrive at the cash flow

per tree; the cash flow per tree was then multiplied by

the number of trees per acre to determine per-acre

net income. The values used for the calculation variables were based on information obtained from the

Florida Agricultural Statistics Service and the

University of Florida’s Institute of Food and

Agricultural Services. The per-acre value was calculated using a life cycle approach. The revenues and

costs were calculated over a period equal to the

expected productive life of a replanted grove, which as

noted previously, is 25 years for lime groves and 36

years for other varieties of citrus.

Q. How will the availability of Asiatic citrus

canker (ACC) crop insurance coverage affect lost

production payments?

A. If the owner of a commercial citrus grove obtained

ACC coverage for trees in his or her grove and

received crop insurance payments following the

destruction of the insured trees, then the lost production payment will be reduced by the total amount of

the crop insurance payments received by the commercial citrus grove’s owner. This adjustment enables

APHIS to deduct any indemnity for destroyed trees

that may have been received by a grower through

crop insurance, thus ensuring that the grove owner

does not receive two tree replacement payments for

the same destroyed trees.

If the owner of a commercial citrus grove was 

eligible to obtain ACC coverage for the trees in his or

her grove, but failed to do so, the per-acre lost production payment will be reduced by 5 percent. If

APHIS were to provide full lost production payments

to insurance-eligible commercial growers who elected

not to obtain ACC coverage, it would likely undermine

the intent and effectiveness of the Federal crop insurance program by making it appear that crop insurance

was not necessary.

Q. How can producers apply for lost production

payments?

A. The form necessary to apply for payments can be

obtained from any local citrus canker program office

or from the USDA Citrus Canker Eradication Project

office in Winter Haven, FL. Applications will automatically be mailed to producers who applied for tree

replacement payments. Completed claim forms need

to be sent to the USDA Citrus Canker Eradication

Project office in Winter Haven, FL, where the records

necessary to validate claims are located. Applicants

should also include a copy of the public order that

directed the destruction of their trees, the order’s

accompanying inventory that describes the acreage,

number, and variety of trees removed, and documentation verifying that the destruction of trees was completed, and the date of that destruction. Claims for

citrus trees already destroyed to control citrus canker

need to be received within 60 days after the effective

date of this final rule. Claims for losses attributable to

the destruction of trees after the effective date of the

final rule need to be received within 60 days after the

destruction of the trees. For more information please

call 1-800-282-5153.

The U.S. Department of Agriculture (USDA) prohibits discrimination

in all its programs and activities on the basis of race, color, national

origin, sex, religion, age, disability, political beliefs, sexual orientation, or marital or family status. (Not all prohibited bases apply to

all programs.) Persons with disabilities who require alternative

means for communication of program information (Braille, large

print, audiotape, etc.) should contact USDA’s TARGET Center at

(202) 720–2600 (voice and TDD).

To file a complaint of discrimination, write USDA, Director, Office of

Civil Rights, Room 326–W, Whitten Building, 1400 Independence

Avenue, SW, Washington, DC 20250–9410 or call (202) 720–5964

(voice and TDD). USDA is an equal opportunity provider and

employer.

United States Department of Agriculture • Animal and Plant Health Inspection Service • Safeguarding American Agriculture