Animal and Plant Health Inspection Service

Analy sis in Support of Certification that the Rule will not have a Significant Economic Impact on a Substantial Number of Small Entities Final Rule: I mportation of Papay a from Colombia and Ecuador into the Con tinental United States Docket No.: 08

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- 2 October 5 , 2009 This final rule has been reviewed under Executive Order 12866. This rule has been determined to be not significant for the purposes of Executive Order 12866, and therefore, has not been revie wed b y the Office of Management and Budget. We will be amending the regulations regarding the importation of papay a cultivar Solo from Col o mbia and Ecuador into the continental United States . As a condition of entry , papay a s from Col o mbia and Ecuador wil l have to meet certain inspection and treatment requirements that mitigate ph yt osanitary

risks associated with the South American fruit fly ( Anastrepha fraterculus ), the Mediterranean fruit fly ( Ceratitis capitata ), and a fungal plant pathogen ( Phoma caric ae - papayae ). The mitigation measures include fruit fl y trapping, pest management, cultural practices that maintain low pest prevalence, and hot water treatment to remove pests of concern. This final rule will make our import regulations more effective an d less restrictive, while continuing to protect U.S. agriculture from the introduction of the identified plant pests. 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. Section 604 of the Act requires an agency to prepare a final regulatory flexibility anal ys is (FRFA) that describes the expected impact of the rule on small entities and the steps the agency has taken to minimize significant economic impacts on small entities. In place of theFRFA, the head of the agency may certify that a rule will not have a significant economic impact on a substantial number of small entities. This analy sis provides the factual basis for certification of this rule. Papay a production is classified under North American Industry Classification Sy stem (NAICS) 111339, other non

- citrus fruit farming. The Small Business Administration (SBA) classifies papay a producers as small entit ies if they have annual sales of not more than $750,000. In the United States in 200 7 , the average market value of agricultural products sold by farms classified under other non

- citrus fruit farming was about $112,000, well below the small

- entity standard

. 1 Most, if not all, papay a producers in the United States are small entities. Importers and wholesalers of papay a s could be affected b y the proposed rule as well. These industries and their small

- entity size standards are: Fresh fruit and vegetable whole salers (NAICS 424480, 100 or fewer employ ees), grocery stores (NAICS 445110, $2 7 million or less in annual receipts), warehouse clubs and superstores (NAI CS 452910, $2 7 million or less in annual receipts), and fruit and vegetable markets (NAI CS 445230, $ 7 million or less in annual receipts). Many of the entities that comprise these industries are small. Since publication of the proposed rule, APHIS has obtained updated data on papay a production and exports by Colombia and Ecuador, and domestic production

. Hawaii is the major U.S. producer of papay a. I n 2008, there were 177 farms with 2,040 acres (including bearing and
non - bearing a cres) producing papay a in Hawaii, the only State for which such data are available

. 2 T otal fresh utilization in 2008 of dom estic papaya production was approximately

1 USDA NASS. 2007 Census of Agriculture (v1.2), Table 46, Selected Characteristics of Farms by North Ameri can Industry Classification System: 2007. 2 USDA NASS. Hawaiian Field Office, Fruit and Nuts Report. Papayas (annual). Oct. 20, 2008. < http://www.nas s.usda.gov/Statistics_by_State/Hawaii/Publications/Fruits_and_Nuts/annpap.pdf >30.9 million pounds , valued at $14

. 4 million

. 3 , 4 A pproximately 50 percent of U.S.

- produced

fresh papay a is utilized within Hawaii

. The final rule will exclude Hawaii from receiving papay a impo rts from Colombia an d Ecuador. In 2007, estimated fresh papay a production in Colombia was 456 million pounds and in Ecuador , 95 million pounds. 5 Thus, the two South American countries together produce about 18 times more papay a than is grown in the United States. Comments received on the proposed rule state that the importation of papay a s from Colo mbia and Ecuador would cause financial harm to domestic papaya growers. APHIS expects such impacts to be insignificant. First, the United States is the largest importer of fres h papay a s in the world . T he quantity of fresh papay as imported since 1999 has almost doubled as U.S. consumption per capita continues to increase . I mports as a percent age of domestic fresh papay a consumption has risen fro m 80 percent in 2000, to over 93 percent in 2007

. 6 U.S. fresh papay a imports in 2008 totaled over 274 million pounds, which is nine times larger than domestic production. Mexico is the principal source of fresh papay a imports by the United States, while additional imports arrive from other Central and South American countries such as Belize, Brazil, Jamaica and Guatemala. U.S. producers of papay as compete against less expensive imports. I n 2008 , the prices of papay a imports from Mexico and Belize were approximately 27 cents and 19 ce nts per pound , respectively , excluding freight and other costs of importation

. 7 , 8 A verage 2008 papay a export prices for Colombia and Ecuador were 37 cents and

3 USDA NASS. Hawaiian Field Office, Fruit and Nuts Report. Papayas (monthly). Feb. 12, 2009. < http://www.nass.usda.gov/Statistics_by_State/Hawaii/Publications/Archive/xpap1208.pdf > 4 USDA NASS. Commodity Papayas. Noncitrus Fruits and Nuts 2008 Summary. July 2009. < http://usda.mannlib.cornell.edu/usda/current/NoncFruiNu/NoncFruiNu

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- 2009.pdf > 5 Food and Agriculture Organization. FAOStat. Commodity “papayas” converted to pounds from tonnes. Retrieved 8/11/09 < http://faostat.fao.org/site/567/default.aspx#ancor > 6 USDA ERS. Fruit and Tree Nuts Situation and Outlook Yearbook. Table F

- 9 Fresh papayas: Supply and Utilization. October 2008. < http://www.ers.usda.gov/Publications/fts/Yearbook08/FTS2008.pdf > 7 Global Trade Atlas. United States Import Statistics, annual data. Commodity HS code 080720, Papayas, Fresh. Retrieved 8/ 10/09. < http://www.gtis.com/gta >23 cents per pound

. 9 In comparison, the 2008 average market price in Hawaii received for

H awaii an p apay a was 43 cents per pound

. 10 In sum, t he U.S. market for fresh papay a is dominated by imports, and becoming increasingl y so. T he addition of Colombia and Ecuador will not significantly affect sales by

U.S. producers. Based on the foregoing inform ation, the Administrator has certified that this final rule will not have a significant economic impact on a substantial number of small entities.

8 Custom Import Value (C.V)

– This value is generally defined as the price actually paid or payable for merchandise when sold for exportation, excluding import duties, freight, insur ance, and other charges incurred in bringing the merchandise to the importing country 9 Global Trade Atlas. 10 USDA NASS. Agricultural Prices 2008 Summary. August 2009. < http://usda.mannlib.cornell.edu/usda/current/AgriPricSu/AgriPricSu

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- 2009.pdf >