## United States

Department of Agriculture Animal and Plant Health Inspection Service July 2013 **Analysis in Support of Certification that the** 

**Rule will not have a Significant Economic Impact on a Substantial Number of Small**  **Entities Final**  **Rule APHIS**  **- 2011**  **- 0019**  **IN 0579 -** **AD46 Importation of Jackfruit, Pineapple, and**  **Starfruit from Malaysia into the Continental United States** 

Policy & Program Development Policy Analysis & Development

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## Summary APHI S is amending the fruits and vegetables regulations to allow imports of fresh pineapple, jackfruit and starfruit with stems from Malaysia into the continental United States under certain phytosanitary requirements. The United States is a net importer of tropical fruit s in general and pineapple in particular. These fruits can only grow in limited numbers in greenhouses or in the S tate of Hawaii. In 2006, U.S. production of pineapples (i.e., in Hawaii) was 188,000 metric tons of pineapples. Since then , there are not data published for production o f tropical frui ts. B etween 200 3 and 201 2 , the United States imported an average of 6 89,000 metric tons of fresh pineapples annually
. In 201 2 , the United States imported 925 ,000 metric tons of fresh pineapples , which were valued at $ 513 million
. The declining pineapple production in Hawaii is augmented b y U.S. imports from Asian countries, Mexico, and Central America. The government of Malaysia proposed to export to the United States around 2,500 metric tons of fresh pinea

pple, 1,500 metric tons of fresh jackfruit, and 3,000 metric tons of fresh starfruit annuall y . With respect to average annual U
. S
. imports of pineapples, the proposed amount consists of less than 0. 4 percent of U
. S
. imports of pineapples. There are not trade data for the other two fruits to compare. U.S. entities most likely

to be directl y affected by the proposed rule are importers and wholesale merchants of fresh fruits and vegetables (NAICS 424480). There are not official data available on the number of importers and wholesale merchants b y specific fresh fruit. Assuming that the percentage of small entities importing fresh pineapples, jackfruit , and starfruit into the United States is approximately the same as the percentage of small entities importing all fresh fruits and vegetables, and given the fact that , in 2007 nearl y 95 percent (4,207 of 4,437) of fruit and vegetable wholesale establishments that operated the entire ye ar were small b y SBA

### ii

standard s , then nearl y all of the entities that may be affected positivel y by the proposed rule are small
. Even though these entities would be affected positively , none of the effects of the final amendments on them would be economicall y significant due to the sm all volume of the proposed imports from Malay sia
. Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action, if promulgated, will not have a significant economic impact on a substantial number of small entities.

### iii



## Table of Contents Summary
................................ ................................ ................................ .............................. i Introduction
................................ ................................ ............. .................................1 P otential Impact on Small Entitie s .................... ..................................................4 Appendix..........................................................................................
.... 6

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## Introduction The government of Malaysia requested APHI S permission to export fresh fruits of pineapple (

Ananas comosus (L ), jackfruit ( Artocarpus heterophylis Lam .), and starfruit ( Averrhoa carambolia ) with stems into the continental United States. Malaysia also provided detailed information on pest s associated with these commodities in that country and guaranteed treatment for all of its export commodities with APHI S
- approved treatments. APHI S phy

tosanitary requirements include treatment of all fruit from Malay sia with high power pressure water spray or compressed air to remove pests, broad spectrum fungi cide treatments, and visual inspection for plant pests. The government of Malaysia agreed to all of the above requirements and further agreed to an APHI S
- approved generic irradiation treatment that would mitigate pathway risks from most insect pests. In addition, each consignment of jackfruit, pineapple, and starfruit would have to be accompanied b y a phyt osanitary certificate of inspection issued by

Malaysia’s National Plant Protection Organization (NPPO) attesting that all APHI S phy

tosanitary requirem ents have been met and that the consignment was inspected and found free of quarantine pests. After con duc ting a pest
- risk assessment, APHI S concluded that the proposed phy tosanitary measures will effectivel y prevent the introduction of quarantine pests from the importation of pineapple, jackfruit, and starfruit from Malaysia
. Thus, APHI S is allowing the proposed Malaysian commodities access to the continental United States ’ markets subject to certain phytosanitary

requirements. APHI S ’ final rule satisfies our commitment under the International Plant Protection Convention (IPPC) to allow the importation of foreign agricultural products that we have

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determined are without significant risk of introducing exotic plant pests or noxious weeds into the United States. The fruits of pineapple, jackfruit and starfruit are tropical or semitropical fruits and , as such, they

are not grown in the continental United States except in greenhouses. Virtually the entire U.S. pineapple crop is grown in Hawaii. In 2006, the last year of reported production data for pineapples b y the U.S. Census in Hawaii, it was reported that 30 farms, using a total of 13,900 acres, produced 188,000 tons of pineapples with an estimated value of $75.5 million (table 1). In the last fifteen years, several pineapple companies in Hawaii closed down due to rising production costs and steep competition from Hawaii
- based corporations with production operations in low
- cost foreign pineapple producing countries. S everal small , independent Hawaiian pineapple growers remain on the islands of Maui and Hawaii . However, their sales are limited to the local fresh fruit markets. The declining pineapple production in Hawaii is augmented b y U.S. pineapple imports from countries, such as Thailand, the Philippines, Mexico, and from Central America. **Table 1**  **Pineapples : Number of farm**  **s, acreage, production, disposition, value, State of Hawaii, 2002 -**  **2006** Year Farms 1 Acreage

used for crop Production

in tons (fresh weight) Disposition Value of production (fresh weight) Processed in tons (fresh weight) Fresh market

(in tons) 2002 25 19 , 1 00 320 ,000 203 ,000 117 ,000 $100,616,000 2003 25 16 ,000 300 ,000 170 ,000 130 ,000 $101,470,000 2004 30 13 ,000 220 ,000 116 ,000 104 ,000 $83,104,000 2005 30 14 ,000 212 ,000 106 ,000 106 ,000 $79,288,000 2006 30 13 ,900 188 ,000 89 ,000 99 ,000 $75,542,000 Source: NASS, Dept. of Ag State of Hawaii, Ag Development Division, Pineapples: Annual Summary, Several Issues
. Note: 2006 wa s the last year pineapple producers disclose d any statistics to the public. 

### With respect to the U.S. production of starfruit and/or jackfruit, there are two years of reported production data for starfruit and none for jackfruit (table 2). The production of these

1 Includes large and small pineapple growers state wide.

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commodities is reported to gether with other minor fruits as one group, which is called “other minor tropical specialty fruits .” 2 **Table 2**  **Starfruit : Number of farms, acreage, production,**  **price , value, State of Hawaii, 2002**  **- 200**  **3** Year Farms Acreage Number of trees Utilized Production Farm Price Value of Sales Total Bearing 2002 50 25 2,100 1,800 63,000 $1.51 / lb. $ 95,000 2003 50 30 2,700 800 24,000 $1.58/ lb. $ 38,000 Source: NASS, Dept. of Ag State of Hawaii, Ag Development Division, Tropical Specialty Fruits : Annual Summary, 2010. 

### According to Hawaii’s National Agricultural Statistics, between 1991 and 2008, the size of planted acreage devoted to “minor tropical specialty fruits” as a whole has increased from 200 acres to 1,480 acres. In 2008, Hawaiian growers of “minor tropical specialty fruits” produced and sold an estimated 2. 1 million pounds of fresh fruit with their value of sales estimated at $4 million. Trade statistics are not available for either starfruit or jackfruit , specificall y. They are included in “other not specified” tropical fruits. The government of Malaysia proposed to export into the continental United States an annual volume of 2.5 thousand metric tons of pineapples which is equivalent to 0. 36 percent of the last ten - ye ar average volume of U.S. imported fresh pineapple s. Table 3. **U.S. Trade of fresh pineapples (HS -**  **6 :**  **0 8043**  **90 )**  **average (200 3**  **- 201**  **2 )** *

Average (200 3
- 201 2 ) Value of U.S. trade of pineapples Average (200 3
- 201 2 ) Volume of U.S. trade of pineapples (in metric tons) Proposed Malaysian Exports of pineapples into the U.S. Continental market (in metric tons) U
. S
. Imports $380,825 689,000 2,500 U
. S
. Exports $12,423 12,000 Net Imports $368,402 677,000 0.36 percent of U.S. fresh pineapple imports Source: World Trade Atlas, 201 3 . *Note: See Appendix for details.

2 Tropical Specialty Fruits of the State of Hawaii include: abiu, atemoya, caimito, cherimoya, durian, langsat, longan, loquat, lychee, mango, mangosteen, persimmon, rambutan, sapodilla, soursop, starf ruit, white sapote, breadfruit, canistel, jaboticaba, jackfruit, poha, rollina, and others.

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Malaysia has also proposed to export to the continental U.S. 1,500 metric tons of jackfruit and 3,000 metric tons of starfruit, for which there are not trade data available for comparison of imported volume s into the United States. **Table 4 .**  **U.S. imports of fresh pineapples average (2008 -**  **2010) and proposed annual Malaysian**  **exports into the continental United States of pineapples, jackfruit, and starfruit**

Average (200 3
- 201 2 ) U.S. Im ports (metric tons) Proposed annual Malaysian exports into the Continental U.S. (metric tons) Fresh pineapples with stems 6 89 , 000 2,500
F resh jackfruit with stems NA 1,500 F resh star fruit with stems NA 3,000 Source: World Trade Atlas, 201 3 , and the Government of Malaysia. 

### The United States is a net importer of fresh pineapples, the majority of which (i.e. , 98 percent) are imported from Mexico and Central American countries. Costa Rica alone ac counts for 84 percent of U
. S
. imports of pineapples. Table 3 shows the average value and volume of U.S. fresh pineapple imports and exports between 2003 and 2012. All U
. S
. pineapple exports originated from the S tate of Hawaii. 

## Potential Impact on Small Entities This analysis provid es the basis, as required by the Regulatory

Flexibility

Act, for certification by

the APHIS Administrator that th is final rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. Entities most likely to be directly affected b y the final rule are importers and wholesale merchants of fresh fruits and vegetables (NAICS 424480). The Small Business Administration ( SBA) has established guidelines for determining which establishments are to be considered small. Import/export merchants, agents , and brokers are identified within the broader wholesaling trade sector. A firm

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primarily engaged in wholesaling fresh fruits and vegetables is considered small if it employs not more than 100 persons
. 3
**Table 5 .**  **Fresh Fruits & Vegetable Wholesale Merchants**  **(NAICS 424480) that m**  **ay be affected by the rule, 2007** Number of Establishments Number of

Establishments that operated the entire year Number of Establishments with fewer than 100 employees that operated the entire year Small
- entity Establishments as a percentage of those that operated the entire year 5,074 4,437 4 , 207 94.8% Source: 2007 Economic Census. Sector 42: Wholesale Trade: Subject Series
- Estab lishment & Firm Size: Summary Statistics by Employment size of establishments for the United States
. 

### In 2007, nearl y 95 percent (4,207 of 4,437) of fruit and vegetable wholesale establishments that operated the entire ye ar were small by the SBA standard. There are not official data available on the number of wholesal e merchants b y specific fresh fruit and/ or vegetable. Thus, we do not know how many establishments are importing fresh pineapples. With respect to fresh starfruits and jackfruits there have not been any recorded data on commercial shipments by the U.S. Department of Commerce. The above numbers in table 4 include the wholesale importers of all fresh fruits and vegetables into the U.S. Assuming that the percentage of small entities importing fresh pineapples, jackfruit , and starfruit into the U.S. is approximately

the same percentage as those importing all fresh fruits and vegetables, then nearl y all of the entities that may be affected b y this final rule are small . They would be affected positively, even though none of the effects of the final amendm ents would be economically significant due to the small volume of the proposed imports from Malay sia
. Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action, if promulgated, will not have a significant economic impact on a substantial number of small entities.

3 NAICS Code Report, https://epic.od.nih.gov/naics/Naicscodelist.asp (Subsector 424

– Merchant Whol esalers, Nondurable Goods; pp. 15:16 of 39
- )

### 6 **Appendix Table**  **6. Pineapples: Number of farm**  **s, acreage, production, disposition, value, State of Hawaii, 2002 -**  **2006**
Year Farms 4 Acreage

used for crop Production (fresh

weight) in 1,000 tons Disposition Value of production (fresh weight) in 1,000 dollars Processed (fresh weight) in 1,000 tons Fresh market

in 1,000 tons **2002** 25 19,100 320 203 117 $100,616 **2003** 25 16,000 300 170 130 $101,470 **2004** 30 13,000 220 116 104 $83,104 **2005** 30 14,000 212 106 106 $79,288 **2006** 30 13,900 188 89 99 $75,542 Source: NASS, Dept. of Ag State of Hawaii, Ag Development Division, Pineapples: Annual Summary, Several Issues. Note: 2006 was the last year pineapple producers disclosed any statistics to the public. **Table 7**  **. Value of U.S. trade**  **of fresh pineapples (HS -**  **6 :08043**  **0 ) in 1,000 dollars** 

**2003 2004**  **2005 2006**  **2007 2008**  **2009 2010**  **2011 201**  **2** U
. S
. Imports 225,670 231,120 264,085 440,215 230,318 458,344 466,567 504,447 474,364 513,123 U
. S
. Exports 9,878 14,705 16,053 16,544 10,181 13,475 11,992 10,486 10,095 10,821 U.S. Net Imports 215,792 216,415 248,032 423,671 220,137 444,869 454,575 493,961 464,269 502,302 Source: World Trade Atlas, 2011 **Table 8**  **. V olume**  **of U.S. trade**  **of fresh pineapples (HS -**  **6 :08043**  **0 ) in 1,000**  **me tric tons** 

**2003 2004**  **2005 2**  **006 2007**  **2008 2009**  **2010 2011**  **2012** U
. S
. Imports 47 7 511 57 8 634 69 7 71 4 720 81 6 818 925 U
. S
. Exports 12 1 6 15 1 6 9 1 2 1 1 8 8 9 Net Imports 465 495 563 618 688 702 709 808 810 916 Table 9. U.S. Trade of fresh pineapple (historically) and proposed increased volume by adding Malaysia

(200 3
- 201 2 ) Average Value of U.S. trade of pineapples (in 1,000 dollars) (200 3
- 201 2 ) Average Volume of U.S. trade of pineapples (in 1,000 metric tons) Proposed Malaysian Exports of pineapples into the U.S. Continental market (in 1,000 metric tons) U
. S
. Imports $380,825 689 2.5
U
. S
. Exports $12,423 12 Net Imports $368,402 677 (0. 36 percent of U
. S
. fresh pineapple im

ports)

4 Includes large and small pineapple growers state wide.