### United States

Department of Agriculture

Animal and Plant Health Inspection Service June 2013 Initial Regulatory Flexibility Analysis

Proposed Rule APHIS 2013 - 0045 RIN 0579 - AD82 Importation of Fresh Bananas from the Philippines into Hawaii and The United States Territories

Policy & Program Development Policy Analysis & Developmenti



### Summary

This analysis examines impacts for U.S. small entities of a rule that w ill allow fresh banana imports from t he Philippines into Hawaii and the U.S. Territories

. Commercial production of bananas in the United States takes place in Hawaii, where most if not all of the

banana farms are small entities. Currently, about 4 .1 million metric tons (MT) of bananas are impo rted into the United States every year. In 2011, Hawaii’s banana harvest totaled about 7,900 MT compared to U.S. imports of about 4.1 million MT. We do not have information at this point on the quantity of bananas that the Philippines expects to ship to t he State of Hawaii or to U.S. territories, or the quantity of bananas already imported into these destinations. We note that for a recent rulemaking to allow banana imports from the Philippines into the continental United States, that the quantity was exp ected to be relatively insignificant, equivalent to about 0.05 percent of U.S. imports from other countries , 4.1

million MT

. Consumers in Hawaii and U.S. territories would benefit from the additional source

of fresh bananas. APHIS does not expect the pro posed rule to have a significant economic impact on small entities.ii



### Table of Contents Summary

................................ ................................ ................................ .............................. i

Introduction

................................ ................................ ................................ ......................... 1

Reasons Action i s Being Considered

................................ ................................ .................. 1 Objectives of and Legal Basis for the Rule

................................ ................................ ........ 2 Potentially Affected Small Entities

................................ ................................ ..................... 2 Projected Reporting, Recordkeeping, and Other Compliance Requirements

..................... 2 Duplication, Overlap, or Conflict with Existing Rules and Regulations

............................ 4

Alternatives to mi nimize Significant Economic Impacts of the Rule

................................ . 41



### Introduction

The Regulatory Flexibility Act requires agencies to evaluate the potential effects of their proposed and final rules on small businesses, small organizations and small governmental jurisdictions. This initial regulatory flexibility analysis describes expected impacts of this proposed rule on small entities, as required by section 603 of the Act. The analysis examines impacts of a rule that will allow fresh banana imports from the Philippines into Hawaii and U.S. territories on U.S. small entities . The rule will amend 7 CFR 319.5, and is part of a continuing program to allow the importation of foreign agricultural products that APHIS has determined are without significant risk of introducing exoti c plant pests

into the United States. 

### Reasons Action is Being Considered

The Philippine Bureau of Plant Industry (BPI) submitted a market access request for bananas to be approved for import into the U.S. This proposal would allow the importation of hard, green bananas from the Philippines to Hawaii and the United States Territories because we have identified measures that will prevent the introduction of plant pests. Generally, APHIS allows the importation of fresh fruits and vegetables when sound science and an analysis of the risks shows that it is appropriate to do so. This proposal follows a previous Final Rule published February 7, 201 3 , which allows the importation of hard, green bananas into the continental United States under a systems approach

. Co nsumers in the United States will benefit from the additional source of fresh bananas without increasing the pest risk to domestic producers in the

United States.2



### Objectives of and Legal Basis for the Rule

This proposal is to amend the regulations to allow the importation of commercial shipments of hard, green bananas from the Philippines into Hawaii and the United States Territories under a systems approach. The Plant Protection Act of 2000 give s the Secretary of Agriculture the legal authority to regulate the importation of plants and plant products to prevent the introduction of plant pests or noxious weeds into the United States. 

### Potentially Affected Smal l Entities

U.S. commercial production of bananas takes place in Hawaii. In 2011, that State’s

banana harvest totaled about 7,900 MT , harvested on 240 farms. 1 A banana farm is considered to be small according to the Small Business Administration’s standard for Other Noncitrus Fruit Farming (North American Industry Classification System category 111339) i f its annual receipts are not more than $750,000. Average annual receipts for the Hawaiian producers in 20 11 was about $ 47 , 125 , indicating that most if not all of these farms are small entities.

W e do not currently have enough information to fully assess the impact o f this proposed

rule

. The quantity of bananas expected to be imported from the Philippines specifically into Hawaii is unknown. However, it is likely to be a limited quantity. P rior to a recent rulemaking to allow banana imports from th e Philippines into the continental United States, the Philippines expected that it would ship only about 100 containers , or about 1,814 MT per year if granted

access to the U.S. as a whole , including Hawaii and the U.S. Territories

. Compared to the volu me of current imports, t his is a relatively insignificant quantity , equivalent to only about 0.05 percent of the 4.1 million MT in bananas imported in to the United

1 Hawaii Farm Facts, May 2010. http://www.nass.usda.gov/Statistics_by_State/Hawaii/Publications/Fruits_and_Nuts/annbanFF.pdf3

States in 2011

. The United States is a minor producer but a major importer of bananas. The international banana market is highly regional, and the United States imports bananas from Central America, South America and the Caribbean. 2 In 2011, the United States imported 4.1 million MT of fresh bananas, with Guatemala, Ecuador, and Costa Rica, respectively, the top

three sources. 3 Similarly, banana exports by the Philippines are principally to Asian markets, with Japan, Iran, China, and Korea its major customers. t is unlikely that a significant portion of th e small quantity of bananas expect ed to be imported from the Philippines to the United States as a whole would be directed specifically to Hawaii . The pull of the Hawaiian market for banana imports is considerably smaller than that of the larger continental U.S market, and current Hawaii an banana production provides considerable banana supply to the Hawaiian market.

. A ny impact of the rule for U.S. banana producers in Hawaii and U.S. territories is likely to be small. To the extent that new imports of

bananas from the Philippines t o a rrive in Hawaii and U.S territories, consumers would benefit

from th is additional source of fresh bananas

. APHIS does not expect the proposed rule to have a significant economic impact on small entities.



### Projected Reporting, Recordkeeping, and Other Compliance Requirement s

Reporting and recordkeeping requirements associated with the proposed rule are discussed in the rule under the heading "Paperwork Reduction Act."

2 http://www.unctad.org/infocomm/anglais/banana/market.htm 3 Hawaii Farm Facts, May 2010. http://www.nass.usda.gov/Statistics_by_State/Hawaii/Publications/Fruits_and_Nuts/annbanFF.pdf4



### Duplication, Overlap , or Conflict with Existing Rules and Regulations

APHIS has not identified any duplication, overlap, or conflict of the proposed rule with

other Federal rules. 

### Alternatives to minimize Significant Economic Impacts of the Rule

Based on our review of available information, APHIS does not expect the proposed rule to have a significant economic impact on small entities. We have prepared this initial regulatory flexibility analysis because our understanding of possible economic effects of the rule on small

entiti es is incomplete. In the absence of apparent significant economic impacts, we have not identified alternatives that would minimize such impacts.