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A fungus that caused a lengthy cross-border dispute and cost PEI farmers tens of millions of dollars in lost business two years ago has been detected again in a PEI potato field.

Potato wart, a virus which isn't harmful to humans but leaves the vegetables with unsightly growths, was found in a small section of a field owned by Cavendish Farms in Freetown, PEI.

The field is located about 10 kilometres from where the virus was detected in Oct. 2000, the Canadian Food Inspection Agency announced Wednesday.

The initial find in a potato field in New Annan devastated the Island's potato industry and caused serious repercussions for the provincial economy as a whole.

The United States closed the border to PEI spuds in 2000, after learning of an isolated outbreak of potato-wart virus. The most rigid limits on U.S.-bound potatoes were lifted in April 2001.

Ivan Noonan, general manager of the PEI Potato Board, said that farmers are not happy about the recent find but that they are "a lot more comfortable this time," now that a plan to deal with the virus is in place. Potato farmers are confident that agriculture officials took the appropriate steps to quarantine the field where the virus was found, he told globeandmai.com.

Mr. Noonan said officials with the Canadian Food Inspection Agency have told him that they have spoken with U.S. officials who have told them they are satisfied with the action taken by Canadian officials.

Canadian agriculture officials don't expect the recent potato-wart finding will have an impact on trade due to the existence of a three-year work plan worked out between Canadian and American agriculture officials after the initial discovery of the potato-wart virus. That plan includes restrictions on affected fields and those nearby as well as a surveillance program.

A spokeswoman from the U.S. Department of Agriculture said U.S. officials have been informed of the finding and are assessing the situation. A team from the department's Animal and Plant Health Inspection Service is planning to travel to the Island next week to inspect the field.

"It's too early to speculate what actions we might take," Meghan Thomas told globeandmail.com.

The field where the potato wart was recently found has been quarantined and any nearby potato fields will have restrictions put on them, at least initially.