The federal government and Prince Edward Island have announced a 40 million dollar agreement on diverting surplus potatoes.

Those potatoes would have gone to the United States, but the Americans have raised concerns about two cases of potato wart, a disease which has been under control for a number of years.

Canada shutdown spud shipments to the U.S. but is in talks to resume shipments.

An estimated 290 million pounds of PEI potatoes will be diverted to processors, packers, dehydrators food banks and other markets.

However, current estimates indicate that 300 million pounds will need to be destroyed.

That represents about 10 percent of PEI potato production.

Producers will receive up to 8.5 cents a pound for the disposal of potatoes.

The 40 million dollar program will see Ottawa contribute 28 million dollars and PEI 12.2 million dollars.
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