Canada has halted exports of fresh potatoes from Prince Edward Island (PEI) to the United States, facing a threat from Washington to ban the shipments over concerns about the potato wart fungus, the Canadian Food Inspection Agency said on Monday.

The agency (CFIA) confirmed the fungus in high levels on two PEI farms in October, the first in 21 years in the province. Potato wart can decrease crop yields but poses no threat to human health or food safety, the CFIA said.

PEI, the smallest Canadian province, is the third-largest potato-producing province after Manitoba and Alberta, growing about 20% of the national harvest in 2020, according to Statistics Canada. The crop is worth more than C$1 billion ($788 million) annually to the province's economy, according to the Prince Edward Island Potato Board.

Canada halted movement of PEI seed potatoes to the United States on Nov. 2. The United States notified Canada that it would ban all imports of PEI fresh potatoes unless Canada took further action.

In response, Canada also suspended exports of fresh PEI potatoes, including potatoes for table use and processing, to the United States. The decision does not apply to processed products.

"I appreciate Canada’s action to suspend the movement of all potatoes from Prince Edward Island to the United States," said U.S. Agriculture Secretary Tom Vilsack. "We look forward to working with the Canadian Food Inspection Agency as they delimit the infestation and trace the sources so that appropriate mitigation measures can be imposed and trade restrictions relaxed."

Fresh potatoes can still move to other Canadian provinces, said David Bailey, Canada's acting chief plant health officer.