A Risk Management Agency Fact Sheet 

Loss Adjustment Procedures 

for Aflatoxin 

Revised December 2008 

Program 

Aid 1979 

United States 

Department of 

Agriculture 

Aflatoxin is a fungus that is most commonly found in 

corn, cotton, peanuts, and tree nuts. Moisture, insects, 

and high temperatures can cause aflatoxin crop 

damage. Aflatoxin growth is most commonly found 

when a period of drought is followed by a period of 

high humidity. Aflatoxin can also attack crops during 

storage or if drying is delayed. Rodents and insects 

can also cause contamination. The Food and Drug 

Administration (FDA) has set contamination guidelines 

for food and feed. 

If you think your crop has been damaged by aflatoxin, 

notify your insurer. Aflatoxin contamination should be 

covered as long as representative samples of grain were 

taken before the grain was moved into commercial or 

on-farm storage. Crop insurance generally ends at 

harvest, so it is important that your insurer samples the 

crop prior to storage. 

An insurance adjuster will take a crop sample to be 

tested at an approved testing facility. Only approved 

testing facilities can provide aflatoxin testing. 

Approved testing facilities: 

a) Must be able to do quantitative tests on 

grain and itemize the results in parts per billion 

(ppb). USDA’s Grain Inspection, Packers & 

Stockyards Administration must certify the test 

kits. 

b) Must be a recognized commercial, 

governmental, or university testing lab that 

uses industry-recognized sample sizes, 

equipment, and procedures for testing 

aflatoxin. 

c) Must not have any interest in the grain being 

tested. 

policy provisions do not provide quality adjustments 

for levels 20 ppb or below. 

FDA may require crops with more than 300 ppb (500 

ppb in Texas) to be destroyed. Crop insurance policy 

provisions consider crops having more than 300 ppb of 

aflatoxin as having zero value, provided the crop is 

destroyed in a manner acceptable to the insurer, and 

will pay a full loss. 

2008 Crop Year Only 

If the crop tests over 20 ppb up to the State maximum, 

the crop qualifies for quality adjustment using the 

actual reduction in value (RIV). 

For example: 1,000 bushels of corn with 45 ppb of 

aflatoxin is being sold; the local market discount (RIV) 

for 45 ppb is $0.75 per bushel; the local market (spot 

cash) price is $1.80 per bushel. In this example: $0.75 

(RIV) ÷ $1.80 = 0.417. 0.417 is the discount factor 

(DF). The quality adjustment factor (QAF) is 1.000 – 

0.417, or 0.583. For quality adjustment, here is how to 

calculate the production: 1,000 bushels x 0.583 QAF = 

583 bushels production to count. 

Adjustments can also be made to crops that have levels 

of aflatoxin in excess of the maximum amounts in the 

Special Provisions of Insurance (SPOI). The SPOI has 

additional information, such as quality adjustment, loss 

procedures, and loss payment factors that are not 

contained in the insurance policy. These claims will 

not be settled until such production is sold to a third 

party who holds no claim on the crop’s loss payments, 

fed, used, or destroyed. 

There are four possible test results: no discounts/ 

damage, mild discounts, severe discounts, or a 

destruction order if aflatoxin is discovered. Since the 

FDA does not have advisory levels or use restrictions 

for crops with 0 to 20 ppb of aflatoxin, crop insurance 

For example: 1,000 bushels of corn is sold to a 

disinterested third party with 320 ppb aflatoxin, the 

local market discount (RIV) for 320 ppb is $1.50 per 

bushel, and the local market (spot cash) price is $1.80 

per bushel. In this example: $1.50 (RIV) ÷ $1.80 = 

0.833. 0.833 is the discount factor (DF). The quality 

This fact sheet gives only a general overview of the Federal Crop Insurance Program and is not a complete policy. For further information 

and an evaluation of your risk management needs, contact a crop insurance agent. 
 

 

adjustment factor (QAF) is 1.000 – 0.833, or 0.167. 

For quality adjustment, here is how to calculate the 

production: 1,000 bushels x 0.167 QAF = 167 

bushels production to count. 

Starting with the 2009 Crop Year 

If the crop tests over 20 ppb up to the State 

maximum, the crop qualifies for quality adjustment 

using the actual reduction in value (RIV). 

For example: 1,000 bushels of corn with 45 ppb of 

aflatoxin is being sold; the local market discount 

(RIV) for 45 ppb is $1.50 per bushel; the local 

market (spot cash) price is $1.80 per bushel. In 

this example: $1.50 (RIV) ÷ $1.80 = 0.833. 0.833 

is the discount factor (DF). The quality adjustment 

factor (QAF) is 1.000 – 0.833, or 0.167. For 

quality adjustment, here is how to calculate the 

production: 1,000 bushels x 0.167 QAF = 167 

bushels production to count. 

Adjustments can also be made to crops that have 

levels of aflatoxin in excess of the maximum 

amounts in the SPOI. These claims will not be 

settled until such production is sold to a third party 

who holds no claim on the crop’s loss payments, 

fed, used, or destroyed. 

For example: 1,000 bushels of corn is sold to a 

disinterested third party with 220 ppb aflatoxin. 

The discount factor chart shows the DF is 0.400 

The QAF is 1.000 – 0.400, or 0.600. For quality 

adjustment, here is how to calculate the production: 

1,000 bushels x 0.600 QAF = 600 bushels 

production to count. 

Producers concerned about placing aflatoxininfected grain in storage or efforts to reduce the 

spread of aflatoxin within grain storage facilities 

should contact local agricultural experts. 

Policyholders should contact their crop insurance 

agent or insurance company if they have questions 

about their crop insurance coverage or 

responsibilities. 

For additional information, please contact the Risk 

Management Agency. 

United States Department of Agriculture 

Risk Management Agency 

1400 Independence Ave., SW, Stop 0801 

Washington, D.C. 20250-0801 

TEL: (202) 690-2803 

FAX: (202) 690-2818 

EMAIL: rma.mail@rma.usda.gov 

Download Copies from the Web 

Visit our online publications/fact sheets page at: 

http://www.rma.usda.gov/pubs/2005/ 

aflatoxinfactsheet.pdf 

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, 

color, national origin, age, disability, and where applicable, sex, 

marital status, familial status, parental status, religion, sexual 

orientation, genetic information, political beliefs, reprisal, or 

because all or a part of an individual's income is derived from 

any public assistance program. (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 to: USDA, Director, 

Office of Civil Rights, 1400 Independence Avenue, S.W., Washington, D.C. 20250-9410 or call (800) 795-3272 (voice) or (202) 

720-6382 (TDD). USDA is an equal opportunity provider and 

employer. 

Risk Management Agency Loss Adjustment Procedures for Aflatoxin/Program Aid 1979