### United States

Department of Agriculture Animal and Plant Health Inspection Service August 2013 **Regulatory Impact Analysis &**

**Initial Regulatory Flexibility Analysis Proposed Rule**  **APHIS 2010 -**  **0082 RIN 0579**  **- AD71**  **Establishing a Performance Standard for**  **Authorizing the Importation and Interstate Movement of Fruits and Vegetables** 

Policy & Program Development Policy Analysis & Developmenti



### Summary Requirements for the importation of fruits and vegetables include risk mitigation measures such as treatments, inspections, and certifications. A fruit or vegetable is not allowed to be imported until APHIS has completed the rulemaking process or the notice

- based process to approve entry

of the fruit or vegetable, based on specific ph yt osanitary measures. The proposed rule would allow us to approve all new fruits and vegetables for importation into the United States using a notice

- based process, rather than through rulemaking. As a result, w e are proposing to remove the region

- and commodity

- specific phy tosanitary requirements from the regulations and replace them with a single performance standard. A similar standard would be used for allowing the interstate movement of fruits and vegetables from Hawaii and the U.S. territories. The proposed rule would benefit both APHI S in its operations and U.S. businesses and consumers. APHIS would be able to use its resources more efficiently and the public would have more timel y access to many of the fruits and vegetables for which importation or movement from Hawaii and the U.S. territories has yet to be approved. APHI S has already

established a notice

- b ased process for allowing the importation or movement from Hawaii and the U.S. territories of certain fruits and vegetables, subject to one or more specified ph yt osanitary measures. For fruits and vegetables for which the risks are not adequatel y mitigate d by

these specified measures and thereby do not qualify under the current notice

- based process, the rulemaking process can range from 18 months to over 3 years. Under the notice

- based process, this time would range from 6 to 12 months.ii

Consumers and busin esses would benefit from the more timely access to fruits and vegetables for which entry or movement would currentl y require rulemaking. However, c ertain businesses would face increased competition for the subject fruits and vegetables sooner due to their more timely

approval. APHI S has not identified other costs that may be incurred because of the proposed rule. The rule would not alter the manner in which the risks associated with a fruit or vegetable import or interstate movement request are evaluated and mitigated. To illustrate potential benefits of more timel y access to U.S. markets, we reviewed fruit and vegetable import rules since 2010 for which import values were estimated. F or imports that do not already qualify for notice

- based approval, the time savings afforded by the proposed rule may range from 6 months to 21⁄2 years (6 to 12 months under the proposed notice

- based approval process versus 18 months to 3 years under current rulemaking). The estimated annual import value of the selected commodities is about $46 million. Based on this estimate, the value of more timely

access of 6 months to 2 1⁄2 years for these commodities would be between $23 million and $115 million. Similar benefits would result from more timely approval for the movement of fruits and vegetables from Hawaii and U.S. territories. The proposed rule also is expected to result in more efficient use of APHIS resources
. Principal industries that could be a ffected b y the proposed rule, fruit and vegetable farms and fruit and vegetable importers, are largel y composed of small entities. We welcome comment on anticipated impacts for businesses of the proposed rule.iii



### Table of Contents Summary
................................ ................................ ................................ .............................. i Introduction
................................ ................................ ................................ ......................... 1 Expected Benefits and Costs of the Rule
................................ ................................ ............ 2 Alternatives to the Proposed Rule
................................ ................................ ....................... 5 Initial Regulatory

Flexibility

Anal ys is
................................ ................................ ................ 5 Reasons Action is Being Considered
................................ ................................ .............. 5 Objectives of and Legal Basis for the Rule
................................ ................................ .... 6 Potentially

Affected Small Entities
................................ ................................ ................. 7 Projected Reporting, Recordkeeping, and Other Compliance Requirements
................. 8 Duplication, Overlap, or Conflict with Existing Rules and Regulations
........................ 8 Alternatives to minimize Significant Economic Impacts of the Rule
............................. 8 References
................................ ................................ ................................ ......................... 101



### Introduction Requirements for the importation of fruits and vegetables (7 CFR 319.56 to 319.56
- 68 ) include pest risk mitigation measures such as treatments, inspections, and certifications. These mitigation measures are specific for each fruit and vegetable that is allowed entry into the United States. A fruit or vegetable is not allowed to be imported until APHI S has completed the rulemaking process or the notice

- based process to approve entry of the fruit or vegetable, based on specific ph yt osanitary measures. The proposed rule would remove the region

- and commodity

- specific phy tosanitary requirements from the regulations and replace them with a single performance standard. 1 APHI S would issue commodity

- specific permits for the importation of fruits and vegetables onl y after anal yz ing the pest risk and making a determination that the risk posed by the quarantine pest can be mitigated b y the application of one or more phytosanitary measures. APHI S is proposing a similar performance standard for approving the interstate movement of fruits and vegetables from Hawaii and the U.S. t erritories. APHI S would maintain a list of all approved fruits and vegetables and their respective import requirements on its Web site. For fruits and vegetables from Hawaii and the U.S. territories, the list of all approved fruits and vegetables and thei r requirements would be maintained in the relevant online manual. This document provides a benefit

- cost anal ys is, as required b y Executive Orders 12866 and 13563, which direct agencies to assess all costs and benefits of available regulatory

1 Performance standard: “No fruit or vegetable is authorized importat ion into the United States unless the Ad ministrator has determined that the risk posed by each quarantine pest associated with the fruit or vegetable can be mitigated by the application of one or more phytosanitary measures designated by the Administrator and the fruit or vegetable is imported into the United States in accordance with, and as stipulated in, the permit issued by the Ad ministrator.”2

alternatives and, if regulation is necessary , to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and equity). Executive Order 13563 emphasizes the importance of quantifying both cos ts and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This document also examines the potential economic effects of the rule on small entities, as required by the Regulatory

Flexibility

Act. 

### Expected Benefits and Costs of **the Rule** APHI S has identified benefits of the proposed rule with respect to its own operations and for U.S. businesses and consumers. The proposed rule would allow for more efficient use of APHI S resources, and the public would have more timely access to fruits and vegetables yet to be approved for importation or movement from Hawaii and the U.S. territories. APHI S has already

established a notice

- based process for the importation or movement from Hawaii and the U.S. territories of fruits and vegetables, subject to one or more specified phy tosanitary measures. For those fruits and vegetables for which the pest risks would not be adequatel y mitigated b y the specified measures, rulemaking is required. The proposed rule would remove the region

- and commodity - specific requirements from the regulations , replacing them with the single performance standard. The commodity

- specific risk mitigation requirements would be listed on the permit issued for importation or movement of the particular fruit or vegetable. T he current rulemaking process for importation or interstate movement from Hawaii and the U.S. territories of new fruits and vegetables for which the notice

- based process is not applicable can take from 18 months to upward of 3 years to complete the adminis trative rulemaking process. The proposed rule would reduce the administrative rulemaking process3

needed for approval of these fruits and vegetables while maintaining the science

- based process , without eliminating the opportunity for public participation i n providing comments. Under the new process, the time for approval would range from 6 to 12 months. Consumers and businesses would benefit from the more timely access to fruits and vegetables for which importation or movement from Hawaii and the U.S terri tories currentl y require s rulemaking. Certain private sector entities may

potentially

face increased competition sooner than they would under approval through rulemaking
. To illustrate potential benefits of more timel y access to U.S. markets , we reviewed fruit and vegetable import rule s since 2010 for which import values were estimated (table 1)
. F or imports that do not already qualify for notice

- based approval, the time savings afforded by the proposed rule may

range from 6 months to 21⁄2 years (6 to 12 months under the proposed notice

based approval process versus 18 months to 3 years under current rulemaking ). The estimated annual import value of the selected commodities is about $46 million. Based on this estimate, the value of more timely access of 6 months to 2 1⁄2 years for these commodities would be between $23 million and $115 million.4

Table 1: E xpected annual value of certain fruit and vegetable imports for which import rules are being prepared or have been published since 2010

**Comm od**  **ity Country of Origin**  **Estimated Annual Value ($ Million)**  Litchis Australia, Vietnam 3.31 Longan Vietnam 6.61 Jackfruit Malaysia 5.12 Starfruit Malaysia 10.47 Pineapple Malaysia 10.25 Bananas Philippines 2.40 Apricot Spain 0.80 Beans Jordan 1.43 Blueberries Morocco 0.90 Avocados Spain 0.61 Unshu Oranges Japan 1.05 Papaya Peru 0.03 Mango Jamaica, Australia 3.45 **Total 46.**  **0 0**  We expect impacts on U.S. consumers and businesses because of more the timely approval of movement from Hawaii and the U.S. territories of fruits and vegetables would be of a similar nature . U.S. agricultural and natural resource interests, in general, wo uld benefit from APHI S’ improved capacity to respond quickl y to pest risk changes that necessitate altering permit requirements. Importers and the public would also benefit from having all import requirements removed from the regulations and included in the fruits and vegetables import requirement (FAVIR) database, which is readil y accessible via the PPQ Web site, and the APHIS Fresh Fruits and Vegetables Import Manual. APHI S has not identified costs that would be incurred because of the proposed rule , oth er than the possible increased level of competition for affected businesses occurring sooner than otherwise
. The rule would not change the manner in which the risks associated with a commodity

import or interstate movement request are evaluated and mitigated. Commodities approved for import or movement from Hawaii or the U.S. territories prior to this rule would continue to be allowed importation or movement under the same requirements.5



### Alternatives to the Proposed Rule One alternative to the proposed rul e would be to leave the regulations regarding imports and interstate movement of fruits and vegetables unchanged. In doing so, the expected benefits would not be realized. Import and movement requests for fruits and vegetables that do not qualify for the existing notice

- based process would require rulemaking, a much more lengthy regulatory

process. The usefulness of the FAVIR database and online manuals to importers and the general public would not be fully exploited, as commodity

- specific importation an d interstate movement requirements would remain in the regulations
. The proposed rule would improve the use of APHIS resources and enable the Agency to be more flexible and responsive relative to evolving pest situations in the United States and exporting regions, as well as provide for more timely access to many

of the fruits and vegetables not yet allowed to be imported or moved from Hawaii and the U.S. territories. 

### Initial Regulatory Flexibility Analysis The Regulatory

Flexibility

Act requires agencies t o evaluate the potential effects of their proposed and final rules on small businesses, small organizations and small governmental jurisdictions. This initial regulatory flexibility

analy sis describes expected impacts of this proposed rule on small entiti es, as required b y section 603 of the Act. **Reasons Action is Being Considered** We are proposing to amend our regulations governing the importations of fruits and vegetables b y broadening our existing performance standard to provide for approval of all new fruits and vegetables for importation into the United States using a notice

- bas ed process. We are also proposing to remove the region

- or commodity

- specific phy tosanitary requirements currentl y found in these regulations. L ikewise, we are proposing an equivalent revision of the6

performance standard in our regulations governing the interstate movements of fruits and vegetables from Hawaii and the U.S. territories and the removal of commodity

- specific phy tosanitary requirements from those regulations. This proposal would allow for the approval of requests to authorize the importatio n or interstate movement of new fruits and vegetables in a manner that enables a more flexible and responsive regulatory

approach to evolving pest situations in both the United States and exporting countries. It would not however, alter the science

- based process in which the risk associated with importation or interstate movement of a given fruit or vegetable is evaluated or the manner in which risks associated with the importation or interstate movement of a fruit or vegetable are mitigated. **Objectives of**  **and Legal Basis for the Rule** In August 2007, APHI S established a notice

- based process for approving the importation of certain fruits or vegetables
. Under this process, a pproval rests on a determination that the fruit or vegetable can be safely imported subject to one or more designated phy tosanitary measures. Amendments to the regulations are not needed, as approval is accomplished via the publication of notices in the Federal Register . APHI S established a similar notice

- based process for approv al of i nterstate movement of fruits or vegetables from Hawaii and U.S. territories in January 2009. The 2007 and 2009 rules streamlined the authorization process for those fruits or vegetables whose ph yt osanitary requirements consisted of measures used frequentl y. The notice

based process established by those rules is as transparent and accessible to our stakeholders and other interested parties as the rulemaking process, while providing APHIS with the ability to7

make more responsive decisions on import issues and by reducing the time involved in approving the commodity for importation or interstate movement. Our objective , by expanding the use of the notice

- based process to all decisions related to the importation and interstate movement of new fruits and vegeta bles and removing the remaining region

- or commodity

- specific phy tosanitary requirements currently

found in the regulations , is to reduce APHI S’ administrative burden while carrying out the same rigorous risk anal ys is process we use to support decisions made via rulemaking. Under the Plant Protection Act, the Secretary of Agriculture is authorized to regulate the importation of plants, plant products, and other articles to prevent the introduction of plant pests into the United States or the dissemination of plant pests within the United States. **Potentially Affected**  **Small Entities** We expect that most of the e ntities potentiall y affected b y the proposed rule are small. Many of them can be classified within the following industries , categorized according to the North American Industry Classification Sy stem : Vegetable and Melon Farming (NAI CS 1112) , Fruit and Tree Nut Farming (NA ICS 1113) , Post Harvest Crop Activities (except cotton ginning) (NAICS 11511 4 ), and Fresh Fruit and Vegetable Merchant Wholesalers (NAI CS 424480). Establishments classified within Vegetable and Melon Farming are considered small according to the Small Busi ness Administration ( SBA ) standard if they have annual receipts that do not exceed $750,000. 2 In2007, the Census of Agriculture reports there were 40,589 farms in this category

and 36,752 ( 91 percent) had annual receipts of $500,000 or less, which is well below the small

- entity threshold. A ccording to the 2007 Census of Agriculture, there were 98,281 farms in th e Fruit and Tree Nut Farming category , of which 92,348 ( 94 percent ) had

2 2007 Census of Agriculture, Table 62: Summary by North American Industry Classification System.8

annual receipts of $500,000 or less, al so well below the same SBA small

- entity standard of $750,000. Establishments classified with in Post Harvest Crop Activities (except cotton ginning) are considered small b y the SBA standard if annual sales are not more than $7 million . The percentage of est ablishments that meet this standard is not known; neither the Census of Agriculture nor the Economic Census reports revenue for these establishments. The SBA small

- entit y standard for e stablishments classified with in Fresh Fruit and Vegetable Merchant Whol esalers is not more than 100 employees . According to the 200 7 Survey of Business Owners, 97 percent of the establishments in this category employed fewer than 100 people
. **Projected Reporting, Recordkeeping, and Other**  **Compliance Requirement**  **s** This proposed rule contains no new information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq .). **Duplication, Overlap ,**  **or Conflict with Existing Rules and Regulations**  APHI S has not identified any d uplication, overlap, or conflict of the proposed rule with other Federal rules. **Alternatives to minimize Significant Economic Impacts of the**  **Rule** The proposed rule would enable APHIS to take a more flexible and responsive regulatory approach to requests to authorize the importation or interstate movement of new fruits and vegetables
. We expect the overall impact for effected entities to be positive. In some instances, entities may

bear some level of additional business competition sooner than they would under normal rulemaking, due to the approval of imports and the interstate movement of products from Hawaii or U.S. territories occurring more quickl y. We do not expect these potential effects to be9

significant and therefore have not identified alternative s to minimize them
. W e expect entities to generall y benefit from the proposed streamlined process. We welcome comment on anticipated impacts for businesses of the proposed rule.10



### References Census of Agriculture, 2007, http:// www.agcensus.usda.gov/Publications/2007/Full_Report/index.asp Economic Census, 2007, http://www.census.gov/econ/ census07/ U.S. Small Business Administration. U.S. Small Business Administration: Table of Small Business Size Standards Match to North American Industry Classification Sy stem http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf