69748 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection 

Service 

7 CFR Part 319

[Docket No. 03–022–5] 

RIN 0579–AB81

Mexican Avocado Import Program

AGENCY: Animal and Plant Health 

Inspection Service, USDA.

ACTION: Final rule.

SUMMARY: We are amending the 

regulations governing the importation of 

fruits and vegetables to expand the 

number of States in which fresh Hass 

avocado fruit grown in approved 

orchards in approved municipalities in 

Michoacan, Mexico, may be distributed. 

We are also allowing the distribution of 

the avocados during all months of the 

year. For the first 2 years following the 

effective date of this rule, those 

avocados may be distributed in all 

States except California, Florida, and 

Hawaii; after 2 years, the avocados may 

be distributed in all States. We are 

taking this action in response to a 

request from the Government of Mexico 

and based on our finding that the 

phytosanitary measures described in 

this final rule will reduce the risk of 

introducing plant pests associated with 

Mexican Hass avocados into the United 

States.

DATES: Effective Date: January 31, 2005.

FOR FURTHER INFORMATION CONTACT: Ms. 

Karen Bedigian, Import Specialist, 

Phytosanitary Issues Management Team, 

PPQ, APHIS, 4700 River Road Unit 140, 

Riverdale, MD 20737–1236; (301) 734–

6799.

SUPPLEMENTARY INFORMATION: 

Background 

The regulations in ‘‘Subpart—Fruits 

and Vegetables’’ (7 CFR 319.56 through 

319.56–8) prohibit or restrict the 

importation of fruits and vegetables into 

the United States from certain parts of 

the world to prevent the introduction 

and dissemination of plant pests, 

including fruit flies, that are new to or 

not widely distributed within the 

United States. 

The regulations in 7 CFR 319.56–2ff 

(referred to below as the regulations) 

have provided for the importation of 

fresh Hass avocado fruit grown in 

approved orchards in approved 

municipalities in Michoacan, Mexico, 

into specified areas of the United States, 

subject to certain conditions. Those 

conditions, which include pest surveys 

and pest risk-reducing cultural 

practices, packinghouse procedures, 

inspection and shipping procedures, 

and restrictions on the time of year 

(October 15 through April 15) that 

shipments may enter the United States, 

are designed to reduce the risk of pest 

introduction. Further, the regulations 

have limited the distribution of the 

avocados to 31 northeastern and north 

central States (Colorado, Connecticut, 

Delaware, Idaho, Illinois, Indiana, Iowa, 

Kansas, Kentucky, Maine, Maryland, 

Massachusetts, Michigan, Minnesota, 

Missouri, Montana, Nebraska, New 

Hampshire, New Jersey, New York, 

North Dakota, Ohio, Pennsylvania, 

Rhode Island, South Dakota, Utah, 

Vermont, Virginia, West Virginia, 

Wisconsin, and Wyoming) and the 

District of Columbia.

In November 2000, the Government of 

Mexico requested that the Animal and 

Plant Health Inspection Service (APHIS) 

amend the regulations to allow Hass 

avocados to be imported year round into 

all 50 States. We did not act on Mexico’s 

request at the time because we did not 

have documentation available to 

support Mexico’s position that such 

importations would not present a risk of 

introducing plant pests into certain 

States. 

As part of our evaluation of Mexico’s 

request, we prepared a draft pest risk 

assessment (PRA), titled ‘‘Importation of 

‘Hass’ Avocado Fruit (Persea 

americana) from Mexico’’ (June 2003), 

to evaluate the importation of fruit to 

the entire United States throughout the 

year. The draft PRA contained two 

components: (1) A risk assessment 

component that identifies quarantine 

pests that are likely to follow the 

Mexican Hass avocado import pathway, 

and (2) a risk management component 

that evaluates the ability of the selected 

phytosanitary measures to mitigate the 

risk posed by those quarantine pests. 

The first component revealed that the 

quarantine pests of concern remained 

the same as those identified in previous 

risk assessments. After eliminating nonquarantine and non-pathway pests from 

the list, eight pests of quarantine 

significance that follow the pathway 

remain: Three fruit flies (Ceratitis 

capitata, Anastrepha ludens, A. striata), 

three seed weevils (Conotrachelus 

aguacatae, C. perseae, and Heilipus 

lauri), one stem weevil (Copturus 

aguacatae), and one seed moth 

(Stenoma catenifer). 

The second component of the draft 

PRA evaluated the selected 

phytosanitary measures to mitigate the 

risk posed by the eight identified pests. 

This component concluded that imports 

of Mexican avocados subject to those 

phytosanitary requirements will result 

in the following: 

• Fewer than 387 infested avocados 

will enter the United States each year, 

estimated with 95 percent confidence. 

• Fewer than 49 avocados infested 

with stem weevil, seed weevils, and 

seed moth will enter avocado producing 

areas each year, estimated with 95 

percent confidence. 

• Fewer than 208 avocados infested 

with fruit flies will enter fruit fly 

susceptible areas each year, estimated 

with 95 percent confidence. 

• Fewer than 3 avocados infested 

with stem weevil, seed weevils and seed 

moth will be discarded in avocado 

producing areas each year, estimated 

with 95 percent confidence. 

• Fewer than 11 avocados infested 

with fruit flies will be discarded in fruit 

fly susceptible areas each year, 

estimated with 95 percent confidence. 

• There is an overall low likelihood 

of pest introduction. 

• Based on the statistical models we 

have used to estimate sampling efficacy, 

it is slightly more likely that zero 

infested avocados will enter the United 

States than one infested avocado; 

however, we cannot rule out the 

possibility that some may enter the 

country. 

Only those avocados discarded in 

susceptible areas pose a risk of 

establishment of the pests in the United 

States. In the PRA, the risk associated 

with the importation of commercial 

shipments of avocados is compared to 

the risks associated with infested 

avocados smuggled into the United 

States. During the 17-year period from 

1985 to 2002, an average of 30 avocados 

each year (specific variety or cultivar 

not recorded) infested with pathway 

pests were intercepted in baggage and 

cargo and denied entry into the United 

States. Studies of port efficiency, when 

searching for prohibited materials, 

indicate that inspectors detect 

approximately 10 to 20 percent of what 

actually arrives. That suggests that the 

number of prohibited avocados (i.e., 

smuggled or inadvertently imported 

non-program avocados) entering the 

United States would average 150 to 300 

per year.

While we state above that fewer than 

387 infested avocados will enter the 

United States each year, estimated with 

95 percent confidence, this number is 

based on statistical models. An 

examination of over 10 million program 

fruit has not revealed any pests in 6 

years of fruit cutting and inspection 

and, also based on statistical models, we 

determined that it is slightly more likely 

that zero infested avocados will enter 

the United States than one infested 

Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 69749

1The updated risk assessment may be viewed on 

the Internet at http://www.aphis.usda.gov/ppq/

avocados and may be obtained from the person 

listed under FOR FURTHER INFORMATION CONTACT.

avocado. Prohibited transport of 

avocados in baggage and cargo poses a 

substantially greater risk of introducing 

the above pests into the United States 

than commercial imports of Hass 

avocados from Mexico. 

Additionally, the 6 years’ worth of 

data from the avocado import program 

gives us confidence that the systems 

approach currently in place provides 

adequate safeguards against avocado 

pests. The systems approach mitigations 

include annual pest field surveys; 

orchard certification; and packinghouse, 

packaging, and shipping requirements. 

The efficacy of the systems approach 

depends on multiple measures. Those 

measures are backed up by an 

inspection system that, when a pest is 

detected, shuts down the imports from 

an affected area, depending on the pest, 

until corrective actions are taken. An 

examination of over 10 million fruit has 

not revealed any pests in 6 years of fruit 

cutting and inspection. 

On May 24, 2004, we published in the 

Federal Register (69 FR 29466–29477, 

Docket No. 03–022–3) a proposal to 

expand the number of States in which 

fresh Hass avocado fruit grown in 

approved orchards in approved 

municipalities in Michoacan, Mexico, 

may be distributed. We also proposed to 

allow the distribution of the avocados 

during all months of the year and to 

make other changes in the regulations, 

such as removing restrictions on the 

ports through which the avocados may 

enter the United States and the corridor 

through which the avocados must 

transit the United States. We proposed 

this action in response to a request from 

the Government of Mexico and based on 

our finding that the phytosanitary 

measures described in this final rule 

will reduce the risk of introducing plant 

pests associated with Mexican Hass 

avocados into the United States. 

We solicited comments concerning 

our proposal for 60 days ending July 23, 

2004. We received 17,022 comments by 

that date (including 11,000 form letters, 

both for and against the proposed rule). 

They were from producers, exporters, 

researchers, members of Congress, and 

representatives of State and foreign 

governments. They are discussed below 

by topic. 

After the comment period for the 

proposed rule closed on July 23, 2004, 

we updated the risk assessment 1 based 

on comments that we received. The 

updated risk assessment incorporates 

suggested changes to the May 2004 

version of the risk assessment that 

accompanied the proposed rule and 

reflects new information received in 

public comments. These changes 

include the following:

• A 47-State scenario was added in 

which the risk is calculated for all States 

excluding California, Florida, and 

Hawaii. 

• Uncertainty was added to the 

estimate for sensitivity of inspection in 

the model. The estimate of 50 percent 

was replaced with a uniform 

distribution from 17.9 percent to 83.5 

percent. 

• The estimate for the number of 

avocados imported was changed for 

consistency with the economic analysis 

prepared for the proposed rule. 

• Statistics including mean, mode, 

and standard deviation were reported 

for all model output distributions.

Our new conclusions, based on the 

recalculations discussed above in the 

second bullet, are as follows: 

In the 50-State scenario, the risk 

assessment model results present, with 

95 percent confidence, the following 

estimates: 

• Fewer than 442 infested avocados 

will enter the entire United States each 

year; 

• Fewer than 54 avocados infested 

with stem weevil, seed weevils, and 

seed moth will enter avocado producing 

areas each year; 

• Fewer than 238 avocados infested 

with fruit flies will enter fruit fly 

susceptible areas each year; 

• Fewer than three avocados infested 

with stem weevil, seed weevils, and 

seed moth will be discarded in avocado 

producing areas each year; 

• Fewer than 12 avocados infested 

with fruit flies will be discarded in fruit 

fly susceptible areas each year. 

Under the 50-State scenario, there is 

an overall low likelihood of pest 

introduction. 

In the 47-State scenario (excluding 

California, Florida, and Hawaii), the risk 

assessment model results present, with 

95 percent confidence, the following 

estimates: 

• Fewer than 393 infested avocados 

will enter the 47 States each year; 

• Fewer than seven avocados infested 

with stem weevil, seed weevils, and 

seed moth will enter avocado producing 

areas outside of California, Florida, and 

Hawaii each year; 

• Fewer than 98 avocados infested 

with fruit flies will enter fruit fly 

susceptible areas outside of California, 

Florida, and Hawaii each year; 

• Fewer than one avocado infested 

with stem weevil, seed weevils, and 

seed moth will be discarded in avocado 

producing areas outside of California, 

Florida, and Hawaii each year; 

• Fewer than five avocados infested 

with fruit flies will be discarded in fruit 

fly susceptible areas outside of 

California, Florida, and Hawaii each 

year; and 

Under the 47-State scenario, there is 

an overall low likelihood of pest 

introduction. 

Even if some infested avocados 

entered the country, the likelihood of 

pest establishment and spread would 

require that: (1) The infested avocados 

must be in close proximity to host 

material; (2) the pests must find mates; 

(3) the pests must successfully avoid 

predation; (4) the adult pests must find 

host material; and (5) the climatological 

and microenvironmental conditions 

must be suitable. These factors 

substantially reduce the likelihood of 

establishment. The degree of pest risk 

reduction attributable to each of the 

factors has not been quantified. People 

generally consume the fruit they 

purchase and dispose of the waste 

material in a manner (such as in plastic 

bags that are landfilled or incinerated) 

that precludes the release of pests into 

the environment. 

In the preceding bullet points, the 

reader may note that the estimated 

numbers of potentially infested fruit are 

in some cases different than the similar 

bullet points presented in the proposed 

rule. These differences are attributable 

to adjustments made in the updated risk 

assessment to the 95th percentile 

estimates for ‘‘N’’ (number of Hass 

avocados imported from Mexico per 

year) and ‘‘P1’’ (proportion of avocados 

infested). P1 was revised upwards 

because the detection sensitivity range 

17.9 to 83.5 was used. P1 is the same for 

the 47 and 50 State scenarios. N was 

revised downward based on the revised 

economic analysis.

Based on comments that we received 

on the proposed rule, and taking into 

account the findings of the updated risk 

assessment, this final rule includes 

several provisions that differ from the 

proposed rule. Specifically: 

• We proposed to allow the avocados 

to be distributed in all 50 States, but 

solicited comments on the possibility of 

delaying the distribution of the 

avocados in California, Florida, and 

Hawaii for 1 year. In this final rule, we 

have adopted a delay in the distribution 

of the avocados in California, Florida, 

and Hawaii for a period of 2 years based 

on the comments that we received. After 

that 2-year period, the avocados may be 

distributed in all 50 States. The effective 

dates for importing fruit into all 50 

States are built into the final rule, which 

precludes the need for APHIS to initiate 

further rulemaking in order to expand 

the area into which the fruit may be 

69750 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

imported. If it is determined that the 

requirements of the export program are 

not being observed routinely or 

uniformly, APHIS will be able to act 

quickly to suspend the effective dates or 

even the entire program, if warranted. 

The export program provides for the 

detection of infested fruit at any point 

in the pathway, with that detection 

leading to the rejection of the shipment 

containing the infested fruit and the 

removal of the grove or municipality 

that produced the fruit from the export 

program until it is determined by APHIS 

and the Mexican NPPO that the grove or 

municipality may be readmitted to the 

program. Thus, the detection of infested 

fruit will not, by itself, result in the 

suspension of all or part of the export 

program. To determine whether the 

requirements of the export program are 

being observed routinely or uniformly 

and to ensure that the distribution 

restrictions of this rule are being 

observed, APHIS personnel will be 

involved in monitoring activities in both 

the United States and Mexico. 

• To reflect our proposal to allow the 

avocados to be distributed in all 50 

States, we proposed to remove the 

requirement in § 319.56–2ff(c)(3)(vii) 

that all boxes or crates of avocados be 

clearly marked with, among other 

things, the statement ‘‘Not for 

distribution in AL, AK, AZ, AR, CA, FL, 

GA, HI, LA, MS, NV, NM, NC, OK, OR, 

SC, TN, TX, WA, Puerto Rico, and all 

other U.S. Territories.’’ In this final rule, 

we have retained that marking 

requirement, specific to California, 

Florida, and Hawaii, for the term of the 

2-year delay in distribution to those 

States. 

• To reflect our proposal to allow the 

avocados to be distributed in all 50 

States, we proposed to remove the 

provisions in § 319.56–2ff(f), which 

limited the ports of entry through which 

the avocados may be imported, and 

§ 319.56–2ff(g), which described the 

areas of the United States that avocados 

moving by truck or rail car may transit 

while en route to approved States. In 

this final rule, we continue to prohibit 

the movement of the avocados into or 

through California, Florida, and Hawaii 

for the term of the 2-year delay in 

distribution to those States. 

• To reflect our proposal to allow the 

avocados to be distributed in all 50 

States, we proposed to remove the 

provisions in § 319.56–2ff(j) that 

required any boxes used to repackage 

the avocados in the United States to 

bear the same information that is 

required to be displayed on the original 

boxes in which the fruit was packed in 

Mexico. In this final rule, we have 

retained those repackaging requirements 

due to the 2-year delay in distribution 

to California, Florida, and Hawaii. 

• We proposed to add a requirement 

for the avocados to be packed in insectproof cartons, loaded in insect-proof 

containers, or covered with insect-proof 

mesh or plastic tarpaulin prior to 

leaving the packinghouse. This 

proposed requirement was intended to 

replace the requirement in § 319.56–2ff 

(c)(3)(viii) that, prior to leaving the 

packinghouse, the truck or container 

transporting the avocados must be 

secured by Sanidad Vegetal with a seal 

that will be broken when the truck or 

container is opened. In this final rule, 

we retain the requirement for seals and 

will not require the insect-proofing 

measures we had proposed. 

Although our adoption of a 2-year 

delay in distribution to California, 

Florida, and Hawaii has led us to retain, 

at least in part, the box marking, port of 

entry, and repackaging provisions 

discussed above that we had proposed 

to remove, we have decided to follow 

through with the removal of another 

measure related to limited distribution, 

i.e., compliance agreements. The 

compliance agreement provisions that 

were located in § 319.56–2ff(k) were 

intended to ensure that distributors and 

handlers of the avocados were familiar 

with the distribution restrictions and 

other requirements of the regulations. 

Given that the distribution restrictions 

established in this final rule cover only 

three States, and only for a limited time, 

we believe that the time, costs, and 

logistical difficulties involved in 

initiating compliance agreements with 

all distributers and handlers of imported 

Mexican Hass avocados in 47 States 

would outweigh the benefits that may 

be gained by retaining the compliance 

agreement requirement. The fruit 

stickering, box marking, and 

repackaging requirements of the 

regulations will serve to ensure that the 

avocado’s origin can be determined, and 

the latter two requirements will ensure 

that the limited distribution statement is 

present on all boxes of fruit. During the 

2-year delay, we will focus our efforts 

on education and outreach so that 

distributors and handlers will be made 

aware of product origin indicators and 

penalties for violation of regulations. 

We will be able to concentrate our 

enforcement efforts more readily since 

the avocados will be prohibited in only 

three States during the 2-year delay, and 

will continue to take action and seek 

penalties for violations of the 

regulations under the Plant Protection 

Act. 

Determination by the Secretary 

Under section 412(a) of the Plant 

Protection Act, the Secretary of 

Agriculture may prohibit or restrict the 

importation and entry of any plant or 

plant product if the Secretary 

determines that the prohibition or 

restriction is necessary to prevent the 

introduction into the United States or 

the dissemination within the United 

States of a plant pest or noxious weed. 

The Secretary has determined that it 

is not necessary to prohibit the 

importation of Hass avocados from 

Mexico subject to the phytosanitary 

requirements described in this final rule 

in order to prevent the introduction into 

the United States or the dissemination 

within the United States of a plant pest 

or noxious weed. This determination is 

based on the findings of the risk 

assessment referred to earlier in this 

document, and the Secretary’s judgment 

that the application of the measures 

required under § 319.56–2ff would 

prevent the introduction or 

dissemination of plant pests into the 

United States. 

Based on the Secretary’s 

determination, and in response to the 

Mexican Government’s request, we are 

amending the regulations to expand the 

number of States (plus the District of 

Columbia) in which fresh Hass avocado 

fruit grown in approved orchards in 

approved municipalities in Michoacan, 

Mexico, may be distributed and to allow 

the distribution of the Hass avocados 

during all months of the year.

Comments 

Comment: The U.S. Department of 

Agriculture’s (USDA’s) Mexican 

avocado import program has never 

before operated during warm summer 

months when pest population levels in 

Mexico are at their peak and susceptible 

crops are in full production in the 

United States. The proposed rule would 

allow avocados from Mexico to be 

imported during all months of the year, 

across all States, including those 

currently excluded under the existing 

rule. By increasing the timeframe to all 

months, the proposed rule includes the 

time period when pest insects are most 

active and sexually mature, in highly 

favorable environments for infestation 

on avocados and other host plants. 

Response: The goal of the program 

continues to be the exclusion of any 

quarantine pests that could become 

established in the United States. Under 

the modified systems approach 

semiannual surveys, rather than annual, 

will be conducted at the municipality 

and orchard level. Municipalities must 

be free of Ceratitis capitata, 

Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 69751

Conotrachelus aguacatae, C. perseae,

Heilipus lauri, and Stenoma catenifer

before they can be certified to export 

avocados to the United States. In 

addition, orchards must be certified free 

of Copturus aguacatae. Trapping is 

conducted in orchards for Anastrepha

spp. fruit flies. Both the regulations and 

the workplan specify what mitigation 

measures must be taken when a 

pathway pest is detected in a certified 

orchard or municipality. The time 

periods selected for the surveys were 

based on the biology of the pests. 

Additionally, fruit cutting will be 

conducted in the orchard, 

packinghouses, and at the port of entry. 

Since the expansion of Mexican 

avocado imports in 1997, none of these 

pests have been intercepted during 

inspections of fruit at packinghouses or 

upon inspection at the U.S. border 

ports. Further, the limited distribution 

plan that we will implement would 

delay the importation of Hass avocados 

from the Mexico State of Michoacan 

into the commercial avocado producing 

States of California, Florida, and Hawaii 

for 2 years from the effective date of this 

final rule. This restriction will provide 

APHIS an opportunity to further 

substantiate the effectiveness of the 

mitigation measures under the 

expanded program. 

Comment: USDA has ignored the fact 

that stem weevils continue to be found 

in alarming numbers in the Mexican 

production areas and that these insects 

can easily migrate from backyard 

orchards to commercial groves. 

Response: Registered orchards and all 

contiguous orchards and property are 

surveyed for the stem weevil, Copturus 

aguacatae and must be found free of the 

pest. If Copturus aguacatae is detected 

in an orchard requesting certification, 

eradication must be completed prior to 

the orchard receiving certification to 

export avocados to the United States. If 

the stem weevil is found in an orchard 

or property contiguous to a certified 

orchard, eradication measures will be 

ordered for that orchard or property. 

Surveys for the stem weevil will 

commence in the registered orchard 

contiguous to the area where the 

detection was found on a weekly basis 

until eradication of the stem weevil in 

the contiguous orchard has been 

completed. Since 1997, the stem weevil 

has been detected in 7 orchards that 

applied for certification. Certification 

was denied due to the presence of the 

stem weevil. Since the expansion of 

Mexican avocado imports in 1997, no 

stem weevils have been intercepted 

during inspections of fruit at 

packinghouses or upon inspection at the 

U.S. border ports. 

Comment: USDA has mistakenly 

decided that other thrips-related insects 

pose no threat because they are not 

associated with avocado fruit; this is 

demonstrably false and inconsistent 

with research done by prominent 

entomologists. Every year a significant 

percentage of the California avocado 

crop is either downgraded to Grade 2 

fruit, for which growers receive a lot 

less money, or is culled or thrown out 

due to thrips damage. Thrips-damaged 

fruit is unattractive and cannot be sold 

in grocery stores. Why would the USDA 

allow Mexican fruit known to be 

infested with thrips to be imported into 

avocado producing areas? 

Response: The risk analysis does not 

list any thrips as pests that would 

follow the pathway. There are 16 thrips 

listed in the Appendix A pest list. Of 

the 16 which occur in Mexico, 5 occur 

in the United States. All 16 pests are 

associated with a plant part other than 

avocado fruit, or in rotting fruit on the 

ground. For example, research (e.g., 

Hoddle, 2002; Yee et al., 2003, cited in 

the risk assessment) has demonstrated 

that Scirtothrips perseae, lays eggs in 

small, immature fruits and tender 

leaves, and does not feed on or lay eggs 

in mature fruit, and is, therefore, 

unlikely to be imported with the fruit. 

APHIS considers Scirtothrips perseae as 

probably representative of other pest 

thrips species. Mitigation of these pests 

in rotting fruit is addressed in the 

workplan and regulation. Avocado fruit 

that has fallen from the trees must be 

removed from the orchard within 7 days 

and may not be included in field boxes 

of fruit to be packed for export. In 

addition, damaged fruit must be culled 

at the packinghouse. Although 

Frankliniella bruneri is listed as having 

been intercepted in avocados at the U.S. 

border, the interception was made in 

fruit found in baggage, not in a 

commercial shipment imported under 

the program. Since the expansion of 

Mexican avocado imports in 1997, no 

thrips have been intercepted in program 

fruit during inspections at 

packinghouses or upon inspection at the 

U.S. border ports. 

Comment: The USDA import program 

has grown exponentially since 1997, 

from approximately 3,700 to over 53,000 

certified acres, stretching USDA 

resources and increasing the probability 

of human error. Believing a screening 

system can be set up to catch all 

infested fruit at the border is not 

realistic. Control at the source with 

identification and traceability through 

the entire chain is required. 

Response: APHIS’ role under the 

operational workplan provided by the 

regulations is to provide management 

and monitoring of the activities 

specified in the workplan, e.g., trapping, 

surveying, and packinghouse 

inspections. While APHIS personnel do 

not necessarily conduct these activities 

themselves, they do monitor Mexican 

officials’ compliance with workplan 

specifications. The staffing level of 

APHIS personnel is sufficient to ensure 

that APHIS meets its requirements 

under the workplan and that other 

signatories are in compliance with the 

regulations. The lack of pest detections 

in the orchard, packinghouse, and 

border inspection since the program 

began in 1997 is evidence that the 

regulations and workplan are being 

complied with. 

In addition, as more orchards have 

applied for certification, it does take 

longer for inspectors to perform the 

initial inspection before the first 

shipping date of October 15. The 

inspectors have had to start inspections 

earlier before that date each year to 

finish inspecting all of the orchards. 

Nevertheless, all orchards must be 

inspected using the same workplan 

criteria, as the records show. APHIS 

keeps lists of all the orchards inspected 

by name. 

Comment: USDA should test the 

proposed expansion regulations under 

actual production and distribution 

conditions over a 2-year period at a 

minimum before allowing shipments 

into California, Florida, and Hawaii. 

Response: As noted previously, 

APHIS has decided, based on the 

comments we received on the issue, to 

implement a limited distribution plan 

that would delay the importation of 

Hass avocados from the Mexico State of 

Michoacan into the commercial avocado 

producing States of California, Florida, 

and Hawaii for 2 years from the effective 

date of this final rule. This restriction 

will provide APHIS an opportunity to 

further substantiate the effectiveness of 

the mitigation measures under the 

expanded program. 

As stated in the economic analysis, 

the volume of Mexican Hass avocado 

exported to the United States is 

expected to substantially increase. In 

addition, some of the commenters stated 

that they believed the expansion of this 

program could not be effectively 

managed. The data collected during the 

first 2 years of the expanded program 

will provide confirmation of the 

effectiveness of the mitigation measures 

and management of the Mexican Hass 

avocado export program. Some of those 

data will cover production and 

distribution periods not previously 

covered by the current regulation. 

Comment: USDA has never allowed 

untreated fruit to be imported from a 

69752 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

region where quarantine pests are 

present into a region of the United 

States where the same crop is produced. 

Response: We disagree with the 

commenter’s characterization of the 

proposed action and statement that 

USDA has never allowed untreated fruit 

to be imported from a region where 

quarantine pests are present into a 

region of the United States where the 

same crop is produced. In the case of 

tomatoes from France, for example, we 

allow the entry of tomatoes from France 

under certain conditions. The tomatoes 

must be produced under a systems 

approach to mitigate the pest risk of 

Ceratitis capitata, which is a quarantine 

pest for the United States. The systems 

approach includes trapping for 

Mediterranean fruit fly, the tomatoes 

must be greenhouse grown, and the 

tomatoes must be safeguarded from 

harvest to arrival in the United States. 

In addition, a phytosanitary certificate is 

required. While phytosanitary treatment 

is not an option to mitigate the fruit fly 

risk, the mitigation measures applied to 

this commodity are equivalent to a 

pesticide treatment. Similarly, under the 

Mexican avocado import program, Hass 

avocados are subject to a systems 

approach to mitigating pest risk that 

produces results similar to those 

achieved through treatment measures.

Comment: California growers have 

been unable to gain access to the 

avocado market in Mexico since 1998. 

Rather than assisting U.S. growers in 

dismantling false trade barriers erected 

by Mexico, USDA has diligently worked 

with Mexican officials to open up the 

U.S. avocado market to Mexican 

avocados. 

Response: APHIS officials are aware 

that U.S. avocado producers would like 

further access to Mexican markets. 

Initially, APHIS officials requested 

market access for U.S. avocados only to 

Mexicali and Tijuana and successfully 

opened these markets. Thereafter, 

APHIS requested market access to the 

five northern Mexican States along the 

border with the United States and more 

recently informed Mexico that our 

avocado producers are interested in 

access to all of Mexico. In response to 

APHIS’ request, Mexican plant health 

officials began a pest risk assessment for 

the importation of U.S. avocados to 

additional Mexican markets. This 

process is similar to the pest risk 

assessment process APHIS conducted 

prior to publishing the proposed rule to 

allow Mexican avocados further access 

to our markets. USDA has continually 

pursued the issue of expanded market 

access for U.S. avocados with Mexico, 

however the next stage of the process 

cannot take place until Mexico 

completes its risk assessment. 

Comment: Mexican avocado growers 

have the ability to use pesticides on 

their crops that American growers are 

prohibited from using. American 

growers are at a disadvantage if they 

were ever faced with a pest infestation, 

as USDA does not have a method of 

dealing with an infestation that has 

occurred other than imposing an 

economically devastating quarantine. 

Additionally, there are concerns about 

human health issues that might arise as 

a result of pesticide residues. 

Response: Considering the 

conclusions of the risk assessment and 

given the fact that there have been no 

interceptions of pests in commercial 

shipments of Hass avocados from 

Mexico, we do not believe that a pest 

infestation will occur under the 

expanded program. USDA and its State 

counterparts, however, have a variety of 

options for dealing with pest outbreaks 

that may occur in this country. The 

response in any particular instance 

depends largely on the specific 

circumstances of the outbreak. 

In addition, while the United States 

does not have direct control over 

pesticides that are used on food 

commodities such as avocados in other 

countries, there are regulations in the 

United States concerning the 

importation of food to ensure that 

commodities do not enter the United 

States containing illegal pesticide 

residues. Because DDT is a pesticide 

that is banned in the United States, even 

if it were used on food commodities in 

foreign countries, the current 

regulations concerning the importation 

of food into the United States prevent 

the entry of products treated with it. 

Through section 408 of the Federal 

Food, Drug, and Cosmetic Act, the 

Environmental Protection Agency (EPA) 

has the authority to establish, change, or 

cancel tolerances for food commodities. 

These tolerances are the maximum 

levels of pesticide residues that have 

been determined, through 

comprehensive safety evaluations, to be 

safe for human consumption. 

Tolerances apply to both food 

commodities that are grown in the 

United States and food commodities 

that are grown and imported into the 

United States from foreign countries. 

While EPA has no authority in a foreign 

country, the tolerance levels are 

enforced once the commodity enters the 

United States. Chemicals such as DDT 

that are banned in the United States do 

not have tolerances on food 

commodities. 

Federal government food inspectors 

are responsible for monitoring food 

commodities that enter the United 

States to confirm that tolerance levels 

are not exceeded and that residues of 

pesticide chemicals that are banned in 

the United States are not present on the 

commodities. Tolerance levels for all 

chemicals that are acceptable for use on 

avocados may be found in EPA’s 

regulations in 40 CFR 180.101 

through180.2020. Tolerance information 

can also be obtained at http://

www.epa.gov/pesticides/food/

viewtols.htm.

Comment: If USDA expands the 

Mexican Hass avocado import program 

as proposed, it should ensure that 

compensation is available for U.S. 

growers in avocado producing areas 

should a pest infestation occur. 

Response: The Plant Protection Act 

provides that the Secretary may pay 

compensation to any person for 

economic losses incurred by the person 

as a result of action taken by the 

Secretary under the extraordinary 

emergency authority provided in section 

415 of the Act (7 U.S.C. 7715). The 

determination of an extraordinary 

emergency would depend on the 

circumstances of an infestation on a 

case-by-case basis and APHIS cannot 

regulate on this issue at this time since 

infestation has not occurred. Any 

decision as to the need to declare an 

extraordinary emergency and, if 

declared, to pay compensation, rests 

with the Secretary. 

Comment: USDA should set up an 

insurance or indemnification program to 

compensate domestic avocado growers 

for any damage incurred as a result of 

any pest infestation that may occur as a 

result of the proposed expansion.

Response: APHIS does not have the 

authority to establish such a program 

under the Plant Protection Act. 

Comment: Growers in Mexico should 

have to pay for the quarantine insurance 

for the avocado growers in the United 

States. While it could be argued that all 

of the previous infestations were the 

result of illegal importation, it is 

inevitable that legal importation will 

eventually create a domestic quarantine. 

Requiring the Mexican producers to pay 

for the quarantine insurance would 

level the economic costs. Paying for 

insurance would also encourage Mexico 

to rid other areas of applicable pests. 

Response: APHIS has no authority to 

require foreign producers to pay 

quarantine insurance for domestic 

producers. 

Comment: Mexican avocados should 

not be imported into the United States 

because of the prevalence of stem 

weevils, seed weevils, fruit flies, thrips, 

and persea mites in Mexico. 

Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 69753

Response: APHIS has assessed the 

risk and determined that there is low 

likelihood of introducing quarantine 

pests such as stem weevils, seed 

weevils, seed moth, and fruit flies. Nine 

mites are identified in the pest list in 

Appendix A of the risk assessment. Of 

the nine mites, eight are also present in 

the United States so those species are 

not considered to be quarantine pests. 

Only one mite, Brevipalpus australis, 

occurs in Mexico but not in the United 

States. All the identified mites are 

associated with a plant part other than 

the avocado fruit, or in rotting fruit on 

the ground and, therefore, are not likely 

to follow the pathway. Since the 

expansion of Mexican avocado imports 

in 1997, mites have not been intercepted 

during inspections at packinghouses or 

upon inspection at the U.S. border 

ports. 

The risk analysis does not list any 

thrips as pests that would follow the 

pathway. There are 16 thrips listed in 

the Appendix A pest list. Of the 16 that 

occur in Mexico, 5 also occur in the 

United States. All 16 pests are 

associated with a plant part other than 

avocado fruit, or in rotting fruit on the 

ground. For example, research (e.g., 

Hoddle, 2002; Yee et al., 2003, cited in 

the risk assessment) has demonstrated 

that Scirtothrips perseae lays eggs in 

small, immature fruits and tender 

leaves, and does not feed on or lay eggs 

in mature fruit, and is, therefore, 

unlikely to be imported with the fruit. 

APHIS considers Scirtothrips perseae as 

probably representative of other pest 

thrips species. Mitigation of these pests 

in rotting fruit is addressed in the 

workplan and the regulations. Avocado 

fruit that has fallen from the trees must 

be removed from the orchard within 7 

days and may not be included in field 

boxes of fruit to be packed for export. 

In addition, damaged fruit must be 

culled at the packinghouse. Although 

Frankliniella bruneri is listed as having 

been intercepted in avocados at the U.S. 

border, the interception was made in 

fruit found in baggage, not in a 

commercial shipment imported under 

the program. Since the expansion of 

Mexican avocado imports in 1997, no 

thrips have been intercepted in program 

fruit during inspections at 

packinghouses or upon inspection at the 

U.S. border ports. 

Comment: I am opposed to the 

expansion of the Mexican avocado 

program into avocado-producing States 

due to a pest infestation that resulted in 

a quarantine in San Diego County and 

other counties in California in 2002 and 

2003 (the Valley Center infestation). The 

quarantine caused financial losses for 

which we were not compensated. 

Response: The Valley Center 

infestation in California stemmed from 

unknown origins and not from 

commercially imported Hass avocados 

from Mexico which were prohibited 

from entering California at the time.

Comment: The avocado expansion 

will jeopardize not only domestic 

avocado production, but all U.S. 

agricultural products susceptible to 

pests found in Mexico. 

Response: With the exception of fruit 

flies, the pathway pests identified in the 

risk assessment are avocado specific, 

thus we expect that the commenter is 

referring to fruit flies in speaking of 

‘‘pests found in Mexico’’ that would 

affect other U.S. agricultural products. 

The risk assessment identified three 

fruit flies capable of following the 

pathway. Ceratitis capitata can infest 

avocado (Liquido et al.,1998) and is a 

quarantine pathway pest. The species is 

under official control in Mexico and is 

found only on the Mexico-Guatemala 

border (APHIS, 1999). Municipalities 

participating in the program must be 

certified free from Ceratitis capitata. 

Hass avocados are considered poor 

hosts for the other two fruit flies, 

Anastrepha ludens and Anastrepha 

striata, thus those pests are unlikely to 

follow the pathway. Anastrepha ludens, 

Anastrepha striata, and Ceratitis 

capitata have not been intercepted in 

any of the more than 10 million 

avocados cut during the course of the 

program. 

The risk assessment further identifies 

the conditions that would be necessary 

for fruit flies to be introduced in the 

United States. Even if an infested 

avocado were to arrive at a region with 

host material, several additional 

conditions are required for pest 

establishment: (1) The pest must survive 

in the avocado during transportation 

and storage; (2) the infested avocado 

must be discarded in close proximity to 

host material; (3) the pest must find a 

mate; (4) the pest must successfully 

avoid predation and other threats; (5) 

the adult pest must find appropriate 

host material; (6) suitable climatological 

and microenvironmental conditions 

must exist; and (7) they must escape 

detection and subsequent eradication 

measures. 

Comment: Mexican agricultural field 

workers are not reliable enough to 

consistently follow procedures 

necessary for pest-free exports from 

Mexico. In contrast, American avocado 

growers go through an abundance of 

measures to monitor for disease and to 

contain outbreaks from spreading to our 

neighbor growers. 

Response: The commenter provided 

no information to support his 

contention regarding the reliability of 

Mexican field workers. Avocados are a 

commercially important crop in Mexico, 

and Mexico’s continued ability to export 

avocados to markets such as the United 

States and Japan is dependent on its 

ability to meet the phytosanitary 

standards of those importing nations. It 

has been our experience that avocado 

producers in Mexico are fully capable of 

meeting the requirement of the 

regulations and anticipate that they will 

continue to do so. 

Comment: Eighty-five different 

Thysanoptera species of thrips have 

been found in Mexican avocados and 24 

different mite pest species, pertaining to 

eight distinct families, have been found 

in Mexican avocado plantings. More 

research should be done into these pests 

and the damage they could incur should 

they reach an American avocado farm. 

Response: In the latest risk assessment 

update, the list of quarantine pest thrips 

has been updated. Mites and thrips are 

not likely to be in the commercial 

import pathway because they are not 

generally associated with mature fruit or 

remain on mature, harvested fruit. None 

have been intercepted by APHIS with 

program Hass avocados from Mexico. 

The risk assessment does not list any 

thrips as pests that would follow the 

pathway. There are 16 thrips listed in 

the risk assessment’s Appendix A pest 

list as occurring in Mexico; of those, 5 

also occur in the United States. All 16 

pests are associated with a plant part 

other than avocado fruit, or in rotting 

fruit on the ground. For example, 

research (e.g., Hoddle, 2002; Yee et al., 

2003, cited in the risk assessment) has 

demonstrated that Scirtothrips perseae

lays eggs in small, immature fruits and 

tender leaves, and does not feed on or 

lay eggs in mature fruit, and is, 

therefore, unlikely to be imported with 

the fruit. APHIS considers Scirtothrips 

perseae as probably representative of 

other pest thrips species. Mitigation of 

these pests in rotting fruit is addressed 

in the workplan and the regulations. 

Avocado fruit that has fallen from the 

trees must be removed from the orchard 

within 7 days and may not be included 

in field boxes of fruit to be packed for 

export. In addition, damaged fruit must 

be culled at the packinghouse. Although 

Frankliniella bruneri is listed as having 

been intercepted in avocados at the U.S. 

border, the interception was made in 

fruit found in baggage, not a commercial 

shipment imported under the program. 

Since the expansion of Mexican 

avocado imports in 1997, no thrips have 

been intercepted during inspections at 

packinghouses or upon inspection at the 

U.S. border ports. 

69754 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

2Aluja, M., Diaz-Fleisher, F., and J. Arredondo. 

2004. Non-host status of Persea americana ‘‘Hass’’

to Anastrepha ludens, Anastrepha obliqua, 

Anastrepha serpentina, and Anastrepha striata

(Diptera: Tephritidae) in Mexico. Journal of 

Economic Entomology, volume 97, issue 2, April 

2004.

Nine mites are identified in the pest 

list in Appendix A of the risk 

assessment. Of the nine mites, eight are 

also present in the United States. Only 

one mite, Brevipalpus australis, occurs 

only in Mexico. All the identified mites 

are associated with a plant part other 

than avocado fruit, or in rotting fruit on 

the ground and, therefore, not likely to 

follow the pathway. Since the 

expansion of Mexican avocado imports 

in 1997, mites have not been intercepted 

in program fruit during inspections at 

packinghouses or upon inspection at the 

U.S. border ports. 

Comment: The study that served as 

underlying research for the APHIS risk 

assessment did not test Hass 

susceptibility to Mexican fruit fly at all 

maturity levels during all-year weather 

conditions such as temperature and 

humidity. Mexican fruit fly does 

reproduce in Hass avocado, certainly so 

in harvested fruit. Fruit still on the tree 

but ready to drop is a very probable 

host. A study should be performed by 

APHIS experts, or by Agricultural 

Research Service (ARS) experts on 

subtropical fruit pests, and Hass 

avocado host susceptibility should be 

studied at all potential stages of the 

Hass avocado during its marketing 

season, i.e., from just barely mature to 

very mature on-tree Hass fruit, as well 

as fresh, naturally dropped from tree 

Hass fruit, since the fruit could be 

harvested just before they drop. 

Response: The host studies conducted 

by Aluja et al. for Anastrepha species 

and Hass avocados in Mexico 2 did test 

Hass susceptibility to Mexican fruit fly 

at all maturity levels during all-year 

weather conditions such as the 

temperature and humidity that occurs 

during the summer months of June, 

August, and September. The study 

considered fruits of a range of sizes that 

were commercially mature, and mature 

fruit attached to the tree as well as off 

the tree. The study concluded that this 

fruit was not considered to be a host for 

Mexican fruit fly under any of these 

conditions.

The Aluja et al. study was subjected 

to rigorous peer review prior to its 

publication and was likewise reviewed 

by USDA fruit fly experts in ARS and 

APHIS. The input from ARS follows the 

tradition and guidelines of peer review. 

The ARS experts offered their own 

interpretation of the scope and 

applicability of the findings. This 

information suggested that we should 

update our risk assessment, and we 

considered the ARS input in preparing 

our updates and changing our 

classification of the host status of Hass 

avocados. We fully intend to continue to 

seek and incorporate ARS expertise and 

guidance in our risk analysis products.

Comment: Paragraph (e)(1) of 

proposed § 319.56–2ff provides that if 

Heilipus lauri, Conotrachelus 

aguacatae, C. perseae, or Stenoma 

catenifer are detected during the 

semiannual pest surveys, orchard 

surveys, packinghouse inspections, or 

other monitoring or inspection activity 

in the municipality, the municipality 

where the pest is found will be 

suspended until APHIS and the 

Mexican NPPO agree that the 

eradication measures taken have been 

effective and the risk of the pest in the 

municipality has been eliminated. In 

order to harmonize phytosanitary 

measures between Mexico and the 

United States, and given that 

preclearance programs for exports from 

the United States to Mexico do not in 

any case suspend the export program for 

a whole county when there is a single 

detection of a quarantine pest, we 

request that the suspension provided for 

in paragraph (e)(1) be applied to only 

the grove involved, and not the entire 

municipality. 

Response: Under the regulations, as 

well as in the proposed rule and its final 

rule, area freedom for Heilipus lauri, 

Conotrachelus aguacatae, C. perseae, 

and Stenoma catenifer is defined at the 

municipality level. Mexico has 

requested that we adjust this to the 

orchard level. Such an adjustment 

would require a change to the 

regulations, and we believe that the 

public should have the opportunity to 

comment on that change and its 

underlying basis. Therefore, APHIS will 

take this suggestion under advisement 

and review whether a pest risk analysis 

must be conducted to address the 

requested change, if the change would 

provide an equivalent measure of 

phytosanitary security, and whether or 

not to initiate the rulemaking that 

would be required to make the 

requested change. 

Comment: Different sensitivities in 

inspection have not been taken into 

account in the risk assessment. 

Response: The commenter is 

suggesting that the sensitivity of fruit 

cutting may be different for the eight 

pathway pests. The estimate for the 

sensitivity of fruit cutting used in the 

May 2004 risk assessment is 50 percent 

(i.e., an infested fruit would be 

identified 50 percent of the time). Our 

use of a point value (50 percent) in the 

quantitative model did not include 

uncertainty about the estimate. APHIS 

had used the average sensitivity of 

starfruit and grapefruit ([35 percent + 80 

percent] ÷ 2 = 57.5 percent) and 

rounded down to 50 percent. For 

simplicity we used a point value, 

confident that this number is a 

reasonable minimum and that the actual 

value is probably higher. 

For our updated (August 2004) risk 

analysis, data were reanalyzed to 

determine the effect of variation in the 

sensitivity parameter on the model 

output. We replaced the 50 percent 

point estimate with a uniform 

distribution from 17.9 to 83.5 percent. 

When we used the entire range given in 

Gould (1995, table 3, as cited in the risk 

assessment) of 17.9 percent to 83.5 

percent, there was very little change in 

the results. Gould (1995) reported that 

the sensitivity of detection by 

experienced inspectors of six types of 

fruit (not including avocado) infested 

with third instar Caribbean fruit fly 

(Anastrepha suspensa) larvae ranged 

from 17.9 percent for green guavas to 

83.5 percent for carambolas. In order to 

account for uncertainty, a uniform 

distribution was used in the analysis 

presented in Appendix D of the updated 

risk assessment. 

The sensitivity of detection could 

vary somewhat among pathway pests. 

All of them can damage the fruit pulp 

when present in the fruit; however, the 

stem weevil (Copturus aguacatae) 

produces tunnels that are usually 

restricted to a small portion of the fruit 

close to the peduncle. Stem weevil 

larvae rarely migrate into the fruit, but 

when they do, they are usually localized 

to the area of the fruit near the peduncle 

(APHIS, 1997; Gudino Juarez and Garcia 

Guzman, 1990, cited in the risk 

assessment). Inspectors are specifically 

instructed and trained to examine the 

peduncle end of the fruit for stem 

weevil larvae (APHIS, 1997, cited in the 

risk assessment). Because of this 

training and because the location of 

stem weevil larvae is highly predictable 

and usually quite localized, APHIS has 

determined that the sensitivity of 

detection for stem weevils and other 

internal avocado pests could reasonably 

be considered to be close to the 50 

percent point in the 17.9 to 83.5 percent 

range. 

Comment: In the proposed rule, 

USDA points to the fact that no pests of 

concern have been found in commercial 

shipments of Mexican avocados since 

the program began. This fact may be 

true, but the Department’s reliance on it 

is misplaced; the dynamic nature of the 

program ensures that the systems 

approach will not operate in the same 

Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 69755

fashion from one year to the next, and 

possibility of human error increases as 

the program grows in size. The 

importance of analyzing human 

reliability factors in the estimation of 

risk is undisputed. Nonetheless, USDA’s 

consideration of human error in the 

operation of its systems approach for 

Mexican avocados has, to date, been 

inconsequential. The omission of the 

characterization of failure modes and 

human reliability in the Department’s 

risk assessment is a fatal flaw that U.S. 

avocado growers cannot accept. 

Response: While there will be 

additional acres under certification in 

Michoacan as well as additional 

avocado imports, the systems approach 

can be adapted to deal with these 

increasing requirements. Additional 

staff or additional layers of mitigations 

may be added to deal with issues that 

arise. APHIS meets yearly to negotiate a 

work plan with Mexican plant health 

authorities and address issues that arose 

in the previous year’s operation. We are 

confident that adequate resources will 

be available to ensure that the systems 

approach will continue to be effective.

While past experience is not a perfect 

guide to future performance, there is no 

reason to believe that we will not be 

able to rely on the effectiveness of the 

systems approach under conditions that 

may exist in the future. Additionally, 

there is also no reason to believe that 

the systems approach will remain the 

same while demand for program 

resources increases. The systems 

approach is a dynamic process that is, 

and will continue to be, modified to 

address changes and future needs. 

Comment: Given the very high longterm costs to California avocado 

producers (and the State of California) 

of a pest introduction from Mexican 

imports, why are all of the pest risk 

assessments on page 4 of the analysis 

presented at a 95 rather than a 99 

percent level of confidence? I am sure 

that producers want a high level of 

confidence that risks are very low or 

nonexistent. 

Response: The risk assessment’s 

Appendix D was modified to include 

graphic representations of all percentile 

results for all of the model outputs. Both 

the 95th percentile and the 99th 

percentile results are included in the 

table of results in the body of the 

document and in Appendix D. The 95th 

percentile results are as relevant as the 

99th percentile. 

Comment: I have a problem 

reconciling the first and last pest risk 

conclusions on page 4 of the proposed 

rule. The statement that ‘‘fewer than 387 

infested avocados will enter the United 

States each year, estimated with 95 

confidence’’ must be based on a 

different distribution than the statement 

that ‘‘it is slightly more likely that zero 

infested avocados will enter the United 

States than one infested avocado,’’ or 

the distribution has to have a large 

standard error on the high side. 

Response: The number of infested 

avocados entering the United States is 

not a point value but is represented by 

a probability distribution. A probability 

distribution presents the range of values 

a parameter can assume (x-axis), plotted 

against the relative likelihood of 

assuming those values (y-axis). The 

probability distribution for the number 

of infested avocados entering the United 

States is presented in Appendix D, page 

104. The figure indicates that the value 

with the highest relative likelihood (the 

most likely value) is zero, and the mean 

of the distribution is 122.6. 

A cumulative probability distribution 

presents the range of values a parameter 

can assume (x-axis), plotted against the 

likelihood of assuming those values or 

less (y-axis). The cumulative probability 

distribution for the number of infested 

avocados entering the United States is 

presented in Appendix D, page 104. The 

95th percentile value for the number of 

infested avocados entering the United 

States is 387. The 95th percentile of a 

parameter is the value in the data set for 

which 95 percent of the values are 

below it and 5 percent are above. The 

distribution for the number of infested 

avocados entering the United States is 

skewed to the left, and has a tail to the 

right. 

The most likely value or mode is the 

value that occurs most often in a set of 

values. In a histogram and a result 

distribution, it is the center value in the 

class or bar with the highest probability. 

In this case, the most likely value is 

zero. 

Comment: The statement in the 

APHIS risk assessment comparing the 

probability of entry of zero versus one 

infested avocado is not at all useful. A 

more relevant comparison of 

probabilities is between zero and one or 

more infested avocados entering the 

United States. In addition, a description 

of the statistical distributions (i.e., mean 

and variance) that these statements are 

based on would help the reader to better 

understand the nature of the risks. 

Response: Appendix D has been 

modified to include mean and standard 

deviations for all model output results. 

The mode of the distribution is zero; 

therefore, zero infested avocados 

entering the United States is more 

probable than one.

Comment: The consideration on 

behalf of the USDA to import foreign 

fruit motivates foreign growers to 

purposely smuggle and introduce 

insects into U.S. growing areas so as to 

overcome the opposition to import, such 

as was suggested in the Valley Center 

Mexican fruit fly infestation which cost 

growers millions. 

Response: While the origin of the 

Valley Center outbreak has not been 

determined, we have no information to 

suggest it was the result of an 

intentional introduction of pests as the 

commenter contends. 

Comment: The public must be 

informed about where the transportation 

of avocados is prohibited and where it 

is not. The public must also be informed 

that they are prohibited from personally 

transporting avocados into the United 

States, even if commercial (inspected) 

avocados are permitted. Public 

education is even more critical within 

the avocado growing and producing 

States of Florida, California, and 

Hawaii. How does the USDA propose to 

educate the public about this proposal? 

If there is a trial period, how does the 

USDA plan to inform the public in 

Florida, California, and Hawaii that 

commercially produced Mexican 

avocados are still prohibited into those 

States? The public will not see a 

difference between these two scenarios 

and it is not discussed within the 

proposal. I fully expect to see serious 

increases in inadvertent movement of 

fruit from Mexico. 

Response: The general public will be 

notified of the change in the Mexican 

avocado program and its specific 

restrictions through this rulemaking 

process and through Agency outreach 

and the media by way of press releases, 

fact sheets, publications, and other 

materials that help explain APHIS 

programs. The Agency’s outreach efforts 

are coordinated with those of the States 

in order to extend their coverage. 

Federal inspection officers at ports of 

entry will continue to inspect members 

of the public returning to the United 

States and will seize any agricultural 

items, including avocados, that are 

prohibited from entering the country. 

Comment: In light of the ARS 

conclusion that Hass avocados are a 

very poor host for Anastrepha fruit flies, 

it would seem logical for APHIS to at 

least lower some of the very costly 

elements of the systems approach in 

Michoacan that are targeted at 

Anastrepha spp. fruit flies. Yet, instead 

of decreasing the requirements aimed at 

fruit flies in Michoacan, APHIS has left 

the requirements for fruit fly trapping 

completely intact. This means that 

when Anastrepha spp. flies are found, a 

list of unnecessary regulatory actions 

must take place, including the needless 

application of pesticides. 

69756 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

Considering the consensus that the 

Hass avocado is a very poor pathway for 

Anastrepha spp. fruit flies, it would 

seem logical to replace the current 

restrictions requiring the need for a full 

fruit fly trapping program with a fruit 

fly monitoring program. Additionally, in 

light of the proposal to remove the 

specific details of the seed and stem 

pest surveys from the regulation and 

insert them into the phytosanitary work 

plan, it would also make sense to 

remove the specific language referring to 

this fruit fly monitoring activity from 

the regulation and, for the sake of 

consistency, insert it into the 

phytosanitary work plan as well. This 

way, as the discussion on the host status 

of the Hass avocado continues to evolve, 

there will be no need to go through the 

rulemaking process to make adjustments 

to this section of the regulation in the 

future. 

Response: Removing the details for 

fruit fly trapping was not considered at 

the time the proposed rule was 

published and, therefore, we will not 

remove those details in the final rule. 

We will, however, consider this issue 

for future rulemaking.

Comment: USDA should ensure that 

the surveys and detection trappings in 

Mexico occur during all 12 months of 

the year to ensure that monitoring for all 

potential pests is sufficient for all the 

listed pests and occurs during all the 

potential detection periods (instead of 

the proposed semiannual surveys). 

Response: The semiannual 

municipality and orchard surveys are 

required for initial certification and to 

maintain certification later on. There is 

year-round trapping for fruit flies, 

which is performed in support of a 

separate APHIS program, and 

packinghouse and border inspections 

will occur on a continual basis. Other 

pests of concern are surveyed at specific 

times of the year based on the biology 

of those species. The regulations 

provide for the suspension of an orchard 

or municipality from the program at any 

time as a result of the detection of 

specified pests during the semiannual 

pest surveys, orchard surveys, 

packinghouse inspections, or other 

monitoring or inspection activity. 

Comment: We disagree with the 

APHIS proposal to replace the 

requirement to seal each consignment 

moving from the packing shed to the 

border with a new requirement for the 

avocados to be packed in insect-proof 

boxes, loaded in insect-proof containers, 

or covered with insect-proof mesh or 

plastic tarpaulin prior to leaving the 

packing shed so that in the very 

infrequent occurrence of a shipment 

being stopped for inspection by 

Mexican authorities, fruit flies or 

hitchhiking pests will not enter. It is not 

logical to add those requirements for the 

following reasons: 

• Refrigerated containers do not 

attract fruit flies or other subtropical 

pests. In fact the opposite is true. 

Refrigerated containers present a very 

inhospitable environment for tropical 

and subtropical arthropods. 

Additionally, such conveyances do not 

provide an adequate environment for 

insect activity such as oviposition. 

• If the Hass avocado is not a host to 

the fruit flies that occur only in rather 

small numbers in Michoacan, then fruit 

fly-proofing the shipment is completely 

unnecessary. 

• Actual fruit fly host materials such 

as mangos, citrus, tomatoes, and 

peppers, which are routinely shipped 

from Mexico to the United States, are 

not subject to such a requirement, nor 

is it necessary. 

• Fruit fly/insect proof requirements 

on commodities such as tomatoes from 

Israel or citrus from Spain are in place 

because the fruit is often subject to long 

periods of exposure to the environment 

while awaiting shipment to the United 

States at seaports or airports. One 

hundred percent of the Hass avocado 

shipments destined to the United States 

from Mexico are safeguarded in insectproof warehouses prior to being sealed 

in insect-proof, refrigerated trailers. 

Based upon this reasoning, we believe 

that the current sealing requirement is 

adequate and should remain in place. 

Response: After careful consideration 

of the comments, APHIS has decided to 

retain the provisions regarding sealing 

of containers. In the proposed rule, we 

stated that our reason for changing from 

sealing of containers to pest proof boxes, 

for safeguarding purposes, was because 

some containers had been arriving at the 

port of entry with broken seals. Seals 

could and were being broken by 

Mexican authorities, to inspect 

containers for contraband. When the 

containers were inspected by Mexican 

authorities, we were concerned that the 

shipment could be exposed to possible 

infestation. 

Upon further investigation, APHIS 

found that Mexico has effectively 

addressed the issue of shipments 

arriving with broken seals. If a seal is 

broken by a Mexican official, that 

official is to provide a specific 

document stating that he/she has broken 

the seal. If the documentation is not 

provided, U.S. inspectors use various 

methods to determine if the shipment 

had been tampered with. 

Data collected at the border reflects 

that Mexico has taken steps to 

adequately address the broken seal 

issue. The number of shipments that 

arrived at the ports of entry with broken 

safeguarding seals decreased 

considerably, from 690 shipments in the 

2002/2003 season to 231 in the 2003/

2004 season. Of the 231 shipments 

arriving with a broken seal during that 

last season, more than 86 percent had 

documentation from the Mexican 

official who broke the seal. In addition, 

the data show that none of the 

shipments arriving with broken seals 

were compromised or infested with 

pests. As the commenter noted, 

refrigerated containers present a very 

inhospitable environment for tropical 

and subtropical arthropods and such 

conveyances do not provide an adequate 

environment for insect activity such as 

oviposition. We agree with the 

commenter as our data supports this 

statement. 

Based on the above, we will continue 

to require sealing of shipping containers 

at the packinghouse to safeguard each 

consignment as it transits Mexico to the 

United States. This will not affect the 

results or conclusions of the risk 

assessment. As long as sufficient 

measures remain in place to safeguard 

the avocados during transit to the 

United States, the conclusion of the risk 

assessment that likelihood of 

introduction of quarantine pests is low 

will remain the same. Therefore, this 

final rule does not require the avocados 

to be packed in insect-proof cartons, 

loaded in insect-proof containers, or 

covered with insect-proof mesh or 

plastic tarpaulin prior to leaving the 

packinghouse. 

Comment: Five years ago, the USDA 

representatives presented a plan, called 

the ‘‘systems approach to pest risk 

mitigation.’’ The plan was evaluated by 

two models, using the Monte Carlo 

modeling engine. The first model, that 

of no import restrictions, was compared 

to the second model, that of the systems 

approach. Had the evaluation 

established a model for the current 

environment at the time, that of a 

complete ban on Mexican avocado 

imports, the systems approach could 

never have generated acceptable 

numbers in the modeling engine. Model 

1, no restrictions, indicates a likelihood 

of infestation by the seed weevil in an 

average of 95 years, seed moth in 355 

years, and the fruit fly in 72 years. 

Model 2, the systems approach, 

indicates a likelihood of infestation by 

the seed weevil or fruit fly in 10,000 

years, and by the stem weevil in 11,000 

years. In reality, a complete ban on 

Mexican avocado imports into 

California in the current environment 

has led to two Mexican fruit fly 

infestations in the last 5 years. 

Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 69757

Infestations by persea mite, thrips, and 

other pests have also occurred within 

the last 12 years. 

Response: Contrary to the 

commenter’s conclusion that prior 

infestations in California were the result 

of APHIS policy, there is no evidence 

linking any infestations with 

commercial Hass avocados from Mexico 

imported under the program regardless 

of a model used to predict risk. The 

current APHIS risk assessment based its 

predictive model on detection samples 

for the quarantine pests of concern. The 

samples were program fruits cut during 

orchard certification surveys, 

packinghouse inspections, and at the 

border. This produced a sample of over 

10 million fruit taken over 6 years of the 

import program. The results of the 

model are presented as expected 

numbers of infested avocados entering 

the United States annually. 

Comment: The fruit fly study does not 

address susceptibility of late season 

avocado to infestation. From my own 

grove operation, I have noted the 

following late season fruit quality 

characteristics which could influence 

fruit susceptibility to insect infestation:

• Fruit oil content is higher than early 

season fruit; 

• Seed tap root pushes through 

bottom of avocado giving easy access to 

fruit interior; 

• Fruits start ripening on the tree; and 

• Handling time window shortens; 

mature fruit ripen quicker. 

The fruit fly is not the only insect pest 

of concern. How does late season 

avocado fruit impact the occurrence of 

stem and seed weevils? What other late 

season Mexican insect pests must the 

industry be concerned with? USDA has 

failed to account for the possibility of 

the harvest of mature, ripe avocados that 

could harbor fruit fly eggs and larvae. 

Response: The Aluja et al. fruit fly 

study included avocados tested on the 

tree at maturity levels from low to high 

percentage dry matter, indicating early 

and late season fruit. ARS reviewed the 

study and concluded that commercial 

Hass avocados are a very poor host for 

Mexican fruit fly and did not single out 

any maturity stage on the tree as 

particularly vulnerable. APHIS has 

concluded, based partly on the ARS 

findings, that there is a low likelihood 

of Anastrepha species of fruit flies being 

in program fruit. APHIS recognizes that 

other internal quarantine pests analyzed 

in the risk assessment may be present in 

mature fruit, but that systems approach 

measures maintain the low likelihood of 

their introduction in program fruit, 

which has been validated by the fruit 

sampling that has been conducted over 

6 years of the program. 

Stem weevils are found in all varieties 

of avocados and can be especially 

abundant in trees not managed under 

the program. Stem weevils can be 

detected both by visual examination of 

cut fruit and by the highly visible 

exudates the larvae leave on tree 

branches. Orchards will be surveyed 

semiannually for stem weevil, and if 

weevils or weevil signs are found, 

certification is denied or suspended. 

Additionally, if stem weevil larvae are 

found in fruit cut at the packinghouse 

or at the border, the regulations require 

the removal of the originating orchard 

from the program immediately and 

avocado exports from that orchard will 

be suspended until APHIS and the 

Mexican NPPO agree that the pest 

eradication measures taken have been 

effective and that the pest risk within 

that orchard has been eliminated. 

Additionally, and as previously 

stated, USDA considers mature, 

commercial Hass avocados to be a very 

poor pathway for thrips. Several 

research studies (e.g., Hoddle, 2002; Yee 

et al., 2003, cited in the PRA) have 

demonstrated that Scirtothrips perseae, 

the avocado thrips (which APHIS 

considers as probably representative of 

other pest thrips species) lays eggs in 

small, immature fruits and tender 

leaves, and does not feed on or lay eggs 

in mature fruit, and is, therefore, 

unlikely to be imported with the fruit. 

This is supported by the fact that there 

have been no thrips interceptions by 

APHIS on commercial Hass avocados 

from Mexico since the program began. 

Comment: In order to provide time to 

reconcile critical issues on safe 

agricultural import practices and create 

parity in U.S./Mexican trade policy, 

there should be no expansion of 

Mexican avocado imports beyond the 31 

currently approved States for a period of 

7 years. During that time, U.S. avocado 

producers should have unrestricted 

access to designated Mexican markets 

with allowances for comparable levels 

of export (tonnage). Also during the 7-

year period, the USDA should: 

• Conduct a comprehensive research 

program on U.S. avocado farms to 

document existing exotic pest and 

disease problems;

• Monitor U.S. avocado farms to 

measure the increase or decrease to U.S. 

avocado production and costs from 

exotic pests; and 

• In conjunction with the California 

and Florida avocado commissions, 

verify Mexico’s compliance with and 

support of the U.S. avocado export 

program. 

After this 7-year period, USDA may 

consider easing restrictions subject to 

the following conditions: 

• U.S. avocado farms experience no 

significant additional impacts due to 

exotic pests or expanded quarantines; 

• U.S. avocado exports to Mexico 

have reached a comparable equilibrium 

measured in tonnage and price with 

Mexican avocado exports to the United 

States; and 

• No new research or data 

demonstrate greater future risk from 

exotic pests or diseases from expanding 

Mexican avocado imports into 

additional U.S. States. 

Assuming these conditions have been 

met, USDA may propose to allow 

further Mexican exports to U.S. States 

other than California and Florida and 

the States which directly border 

California. 

Response: APHIS has no authority 

under the Plant Protection Act to 

prohibit or restrict the entry of an article 

merely to create parity in trade between 

the United States and another nation. 

Further, as a signatory to the 

International Plant Protection 

Convention, the United States has 

agreed not to prescribe or adopt 

phytosanitary measures concerning the 

importation of plants, plant products, 

and other regulated articles unless such 

measures are made necessary by 

phytosanitary considerations and are 

technically justified. Based on the 

conclusions of the APHIS risk 

assessment, we do not believe that there 

is a technical justification for the 7-year 

delay or other measures suggested by 

the commenter. We have, however, 

implemented a 2-year delay for imports 

into and distribution within California, 

Florida, and Hawaii in response to other 

comments we received on the proposed 

rule. This restriction will provide 

APHIS an opportunity to further 

substantiate the effectiveness of the 

mitigation measures under the 

expanded program. 

Comment: USDA’s proposed rule on 

the Mexican Hass avocado import 

program includes several proposed 

changes to the protocol under which the 

program operates. For example, the 

Department has proposed conducting 

semiannual, rather than annual, pest 

surveys at the municipality and orchard 

levels. We support the idea of 

semiannual surveys during the wet and 

dry seasons. It is appropriate, too, to 

leave the details of how and when 

surveys will be conducted to the annual 

work plan developed by Mexico’s 

national plant protection organization 

and APHIS. In our view, it is 

imperative, however, that areas with 

wild or backyard avocado trees continue 

to be included in pest surveys 

conducted at the municipality level. 

These areas represent the greatest 

69758 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

potential source of infestation or 

reinfestation of export orchards. 

Response: The proposed rule did not 

include a proposal to eliminate the 

surveying of areas with wild or 

backyard avocado trees during 

municipality surveying. The proposal 

was to eliminate specific language on 

the surveys from the regulations because 

this information would be included in 

the workplan. Areas with wild or 

backyard avocado trees will continue to 

be surveyed. 

Comment: The regulations in 

§ 319.56–2ff (c)(2)(iii) state that 

‘‘avocado fruit that has fallen from the 

trees must be removed every 7 days and 

may not be included in field boxes of 

fruit to be packed for export.’’ I request 

and strongly recommend this 

permissive ‘‘may’’ be strengthened to a 

mandatory ‘‘must’’ or ‘‘shall.’’

Response: The phrase ‘‘may not be 

included’’ does not contain a 

‘‘permissive’’ element as the commenter 

suggests. As written, the text of 

§ 319.56–2ff (c)(2)(iii) serves as clear 

prohibition on the inclusion of fallen 

fruit in field boxes of fruit to be packed 

for export. 

Comment: Serious program infirmities 

must be addressed before expansion can 

occur: There are no standardized 

procedures, training, or oversight for 

fruit cutting; fruit cutting techniques are 

ineffective at detecting the eggs, first 

instar, and second instar larvae of fruit 

flies or the stem weevil, rendering 

USDA’s risk probabilities unreliable; 

improper pest survey timing has 

underrepresented pest population 

levels; fruit fly trapping methodology 

and servicing are flawed; fruit fly 

response and treatment procedures are 

inadequate. The inspection process is 

not sufficient. USDA inspectors may 

simply drop an avocado into a slicer 

and check for a mature worm rather 

than using a loupe (a portable 

microscope lense). The larvae for almost 

every pest are not visible to the naked 

eye. Additionally, the Department of 

Homeland Security (DHS) is now doing 

port inspections that focus more on 

drugs, guns, etc., than plant pests. 

Response: Regarding training and 

oversight for fruit cutting, inspectors are 

trained to detect pathway pests based on 

the biology of the pest and what signs 

or symptoms of infestation to look for. 

They have hand lenses that they may 

use, if they need them, to complete an 

inspection. Pest damage, rot, and most 

stages of each of the internal pests are 

visible to the trained inspector. APHIS 

is aware that there is a possibility that 

a pest may escape detection and has 

accounted for this uncertainty in the 

current risk assessment. Fruit cutting is 

only one of the multiple measures of the 

systems approach that mitigates pest 

risk. 

Survey timing: Under the modified 

systems approach, semiannual surveys 

will be conducted at the municipality 

and orchard level. Municipalities must 

be free of Ceratitis capitata, 

Conotrachelus aguacatae, C. perseae, 

Heilipus lauri, and Stenoma catenifer

before they can be certified to export 

avocados to the United States. In 

addition, orchards must be certified free 

of Copturus aguacatae. Trapping is 

conducted in orchards for Anastrepha 

spp. fruit flies. Both the regulations and 

the workplan specify what mitigation 

measures must be taken when a 

pathway pest is detected in a certified 

orchard. The time periods selected for 

the surveys were based on the biology 

of the pests. Additionally, the fruit 

cutting will be conducted in the 

orchard, packinghouses, and at the port 

of entry. Since the expansion of 

Mexican avocado imports in 1997, none 

of these pests have been intercepted 

during inspections of fruit at 

packinghouses or upon inspection at the 

U.S. border ports. 

Fruit fly trapping is modeled after 

other APHIS programs for consistency, 

and the actions are based on the biology 

of the pests and fruit fly detections. 

Comment: Because of insufficient 

analysis, USDA should subject its risk 

assessment to rigorous, external peer 

review, to incorporate the best science 

available and to establish a more 

credible research base for its decision to 

allow imports to particular States. 

Serious program deficiencies must be 

addressed before Mexico is allowed to 

expand exports to additional States. For 

example, there are no standardized 

procedures, training, or oversight for 

fruit cutting during pest inspections. 

Fruit cutting techniques are ineffective 

at detecting the eggs and larvae of fruit 

flies or the stem weevil, thus rendering 

USDA’s risk probabilities unreliable. 

Additionally, improper pest survey 

timing has underrepresented pest 

population levels; fruit fly trapping 

methodology and servicing are flawed; 

and fruit fly response and treatment 

procedures are inadequate. I urgently 

request that this program be suspended 

for further study by independent experts 

in the field and in consultation with the 

industry because the scientific basis for 

allowing Mexican fruit into the United 

States was based on a joint USDAMexico study for one growing season in 

Mexico. This study is a very small basis 

upon which to overthrow 80 years of 

exclusion and contains much that is 

controversial and open to question. 

Response: The APHIS risk assessment 

has been made available for public 

review twice. First, we made the draft 

risk assessment available for public 

comment for a total of 90 days through 

a notice of availability published in the 

Federal Register on June 16, 2003 (68 

FR 35619, Docket No. 03–022–1), and a 

subsequent extension of the comment 

period (68 FR 48595–48596, Docket No. 

03–022–2, published August 14, 2003). 

An updated version of the risk 

assessment was also made available for 

public comment for an additional 60 

days as part of our May 2004 proposed 

rule. We received numerous comments 

regarding the risk assessment in both 

instances, including comments from 

professional risk analysts, private risk 

consultants, and university and 

government scientists, and updates have 

been made to the risk assessment to 

address those comments. Further, the 

fruit fly study (Aluja et al. 2004) noted 

by the commenter that is cited in the 

risk assessment was subjected to 

rigorous peer review prior to its 

publication in the Journal of Economic 

Entomology and was likewise reviewed 

by USDA fruit fly experts in ARS and 

APHIS. The input that APHIS received 

from ARS follows the tradition and 

guidelines of peer review. The ARS 

experts offered their own interpretation 

of the scope and applicability of the 

findings. This information suggested 

that we should update our risk 

assessment, and we considered the ARS 

input in preparing our updates and 

changing our classification of the host 

status of Hass avocados. We believe that 

these documents do, in fact, provide a 

credible research base for our 

decisionmaking with regard to the 

expansion of the Mexican avocado 

export program to additional States and 

the Secretary’s determination is based 

on the findings of the risk assessment 

and her judgment that the application of 

the measures required under § 319.56–

2ff would prevent the introduction or 

dissemination of plant pests into the 

United States, thus we do not believe 

that the program suspension 

recommended by the commenter is 

appropriate. 

The specific issues raised by the 

commenter regarding fruit cutting, pest 

surveys, inspection, and fruit fly 

trapping are addressed in the response 

to the previous comment.

Comment: In the proposed rule, 

APHIS states that even if an infested 

avocado were to arrive in an area of the 

United States where host material was 

present, several additional conditions 

are required for pest establishment (i.e., 

the pests survive during transportation 

and storage; the infested avocados must 

Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 69759

3Citations pertaining to disposal patterns can be 

found on pages 9 and 36 of ‘‘Importation of 

Avocado Fruit (Persea americana Mill. var. ‘‘Hass’’) 

from Mexico: A Risk Assessment,’’ September 17, 

2004.

be discarded in close proximity to host 

material; the pests must find mates; the 

pests must successfully avoid predation; 

the adult pests must find host material; 

the climatological and 

microenvironmental conditions must be 

suitable; and they must escape detection 

and subsequent eradication measures). 

APHIS admits that information that 

would allow quantifying these 

conditions is not currently available. 

Without that information, how can the 

Secretary conclude that it is not 

necessary to restrict Mexican avocados 

for phytosanitary reasons? 

Response: As stated in the proposed 

rule and in this document, the 

Secretary’s determination is based on 

the findings of the risk assessment and 

her judgment that the application of the 

measures required under § 319.56–2ff 

would prevent the introduction or 

dissemination of plant pests into the 

United States. The risk assessment 

contains both quantitative and 

qualitative elements, and our final 

expression of a likelihood of 

introduction is a descriptive statement. 

The results of the quantitative analysis 

do not equate to likelihood of 

establishment. Rather, they express the 

likelihood of an infested avocado being 

discarded in a suitable location; 

establishment and spread would require 

the additional steps noted by the 

commenter, which substantially reduce 

the likelihood of establishment. People 

generally consume the fruit they 

purchase and dispose of the waste 

material in a manner (such as in plastic 

bags that are landfilled or incinerated 3) 

that precludes the release of pests into 

the environment. For these reasons, our 

final expression of a likelihood of 

introduction is a descriptive statement. 

These factors, in combination with the 

results of the quantitative analyses, led 

APHIS to conclude that the likelihood 

of establishment of infested avocados 

through the commercial pathway of 

Hass avocados imported from the State 

of Michoacan and produced using the 

systems approach is low.

Comment: Much is made in the risk 

assessment of the maximum likelihood 

estimate of the number of infested 

avocados imported in any year being 

zero. However, a more interesting 

statistic, from the point of view of the 

agricultural industry, is the probability 

of no infested avocados being imported 

in any year. From this one can calculate 

the probability of importation of 

infested fruit over a period more 

meaningful to agriculture. For tree crop 

agriculture, 20 years or more is a 

meaningful planning horizon, and the 

formula p20 = 1-(pi )20 where p20 = the 

probability that 1 or more infested fruit 

will be introduced during a 20 year 

period and pi = the probability of no 

infested avocados being imported 

(assuming pi for i = 1 to 20 are 

independent) in any year. This p20 can 

be adjusted for the likelihood that any 

imported infested fruit will result in 

establishment of the pest in a producing 

area, as presented in the text. From this 

estimate of the probability of 

establishment of the pest, multiplied by 

the cost of eradication plus losses to 

growers, one can calculate the expected 

cost of allowing the importation of 

Mexican avocados. This calculation has 

much more meaning to the industry 

than the mere statement that the 

probability of infestation from imported 

avocados (in any one year) is ‘‘low.’’

Response: The risk assessment was 

prepared to assist APHIS in evaluating 

Mexico’s request to expand the scope of 

the existing Hass avocado import 

program. As such, its purpose was to 

analyze the risks of expanding the 

Mexican Hass avocado import program 

to authorize imports throughout the 

United States year-round. Although the 

method presented by the commenter for 

estimating the likelihood of no infested 

avocados being imported in any year 

could produce useful information from 

the point of view of the agricultural 

industry, it does not appear that the 

endpoint sought by the commenter—

i.e., the ‘‘expected cost of allowing the 

importation of Mexican avocados’’—

could be achieved in a meaningful way. 

Two of the factors that would be 

considered in the calculation proposed 

by the commenter—the cost of 

eradication plus losses to growers—

could vary enormously, depending on 

the nature and scope of the pest 

outbreak to be eradicated and the effects 

the particular pest might have on 

production, so the final estimates would 

necessarily be very broad in their range. 

Comment: With respect to the risk 

assessment, USDA has ignored the 

directive of the Congressional 

Appropriations Committee, which 

stated ‘‘The Committee directs APHIS to 

include independent, third party 

scientists in the development of any 

PRA for Mexican avocados prior to the 

publication of any PRA in the Federal 

Register.’’ Further, USDA ignored 

fundamental disagreements between its 

own scientists regarding the conclusions 

drawn by the underlying research data, 

and has not released that research data, 

thus not allowing time for independent 

review before the risk assessment was 

issued. Finally, the USDA has assigned 

only a minimum crew of 11 men to 

survey and monitor an increase of 

Mexican avocado acreage from 3,700 

acres in 1997 to over 53,000 certified 

acres. 

Response: On June 16, 2003, APHIS 

published a notice in the Federal 

Register to inform the public of the 

availability of a new draft PRA that was 

prepared in response to the Mexican 

Government’s request that the avocado 

import program be expanded to include 

all 50 States for the entire year. In 

accordance with the Committees’

direction to include independent, third 

party scientists in the development of 

PRAs for the avocado program, APHIS 

scientists consulted with independent 

subject matter experts from a variety of 

accredited academic institutions during 

the development of the draft PRA. These 

institutions included, among others, 

Florida A&M University, the University 

of Florida, and the Institute of Ecology 

in Veracruz, Mexico. APHIS scientists 

also consulted with ARS researchers 

from various locations, including 

Hawaii and Texas. APHIS extended the 

original comment period on the PRA for 

an additional 30 days and accepted 

public comments on the assessment 

until September 15, 2003. The public 

comment period served as an additional 

opportunity for all members of the 

public, including independent 

researchers and members of academia, 

to evaluate the draft PRA. After 

reviewing all the comments, we 

determined that it was appropriate to 

move ahead with a proposed rule. We 

reported our action to the Committee 

prior to publishing the proposed rule. 

As noted above, APHIS solicited the 

opinion of ARS scientists regarding the 

fruit fly research presented in Aluja et 

al. (2004) and worked with those 

scientists to understand the similarities 

and differences between our Agencies’

interpretations of the conclusions drawn 

in the study. The APHIS position was to 

initially agree with Dr. Aluja’s findings 

that commercially packed Hass 

avocados are not a host of Mexican fruit 

flies. ARS took a slightly more 

conservative position that those 

avocados are a very poor host of the 

Mexican fruit fly. The difference in the 

categorization of the Hass avocado’s 

host status did not effect the level of risk 

in the APHIS risk assessment. APHIS 

did, in the final analysis, change its 

categorization of the Hass avocado host 

status based on ARS’s conclusions. 

Changing our conclusions on the host 

status made it then necessary to 

calculate the pest risk for fruit fly in our 

risk assessment. After performing these 

calculations, we found the likelihood of 

69760 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

fruit fly infestation through commercial 

shipments of Hass avocado from Mexico 

to be very low. The pest risk did not 

change as a result of labeling the fruit 

fly as a poor host rather than a non-host. 

The Aluja et al. research used in the 

APHIS risk assessment was published in 

the Journal of Economic Entomology in 

April 2004. Because the proposed rule 

was published on July 23, 2004, and 

was open for public comment for 60 

days, we believe that the research was 

available to the general public with 

ample time for examination. Because 

the Aluja et al. study had already been 

accepted for publication in 2003, it was 

unavailable for distribution during the 

June-September 2003 comment period 

for the draft PRA. 

Finally, as previously stated, APHIS’

role under the operational workplan 

provided by the regulations is to 

provide management and monitoring of 

the activities specified in the workplan, 

e.g., trapping, surveying, and 

packinghouse inspections. While APHIS 

personnel do not necessarily conduct 

these activities themselves, they do 

monitor Mexican officials’ compliance 

with workplan specifications. The 

staffing level of APHIS personnel is 

sufficient to ensure that APHIS meets its 

requirements under the workplan and 

that other signatories are in compliance 

with the regulations. The lack of pest 

detections in the orchard, packinghouse, 

and border inspection since the program 

began in 1997 is evidence that the 

regulations and workplan are being 

complied with.

In addition, as more orchards have 

applied for certification, it does take 

longer for inspectors to perform the 

initial inspection before the first 

shipping date of October 15. The 

inspectors have had to start inspections 

earlier before that date each year to 

finish inspecting all of the orchards. 

Additional inspectors would be hired to 

inspect the increased acreage within the 

required time-frame. If the inspection 

does not occur within that timeframe, 

the orchards would not be certified. All 

orchards must be inspected using the 

same work plan criteria, as the records 

show. APHIS keeps lists of all the 

orchards inspected by name. 

Comment: Limiting Mexican fruit to 

colder climates makes sense. Maybe 

Mexican fruit could be allowed only if 

it were packaged and processed in a 

frozen type of product. 

Response: Some types of processed 

avocado products are allowed into the 

United States and can go to all States. 

Whether or not the processed product is 

allowed in depends on whether the 

processing mitigates any pest risk. 

Frozen avocados are allowed entry if 

they meet these requirements: 

• An import permit is required, 

• The seeds must be removed; and 

• The avocados must be at or below 

20 °F at the time of arrival at the port 

of entry. If the temperature of the 

avocados is higher than specified, the 

avocados will be required to meet the 

import requirements of fresh avocados. 

As we discussed in the proposed rule 

and in this final rule, we do not believe 

it is necessary to limit the importation 

of Mexican avocados to cooler climates 

because of the mitigations in place and 

the findings in our risk assessment. 

Comment: Cultural practices used by 

Mexican avocado growers, including 

unsanitary Mexican growing conditions 

in which human waste is used, could 

cause illness in U.S. consumers. 

Response: APHIS has no information 

to suggest that human waste is used in 

avocado production in Mexico. Even if 

it were used in some cases, the fact that 

avocados are a tree fruit make it 

unlikely that avocados on the tree 

would be contaminated as a result. 

Comment: Regarding this proposal to 

establish limitations on the entry of 

Hass avocados into States with 

commercial production of avocados in 

the United States, we believe that the 

scientific support contained in the Aluja 

et al. study, which documents the 

scientific evidence showing that the 

Hass avocado is not a host for 

Anastrepha spp. fruit flies, together 

with there having been no detections of 

quarantine pests throughout 7 years of 

exporting, ensures an adequate level of 

plant health protection for the United 

States, including the avocado-producing 

areas. 

The above is also supported by the 

risk assessment prepared by USDA in 

which the probabilistic analysis, based 

on the information from cut fruit 

exported to the United States, 

establishes that the annual number of 

fruits infested by quarantine pests 

imported into the United States is zero. 

Response: To provide APHIS an 

opportunity to further substantiate the 

effectiveness of the mitigation measures 

under the expanded program as 

discussed in our risk assessment on 

pages 4, 10, and 11, APHIS has decided 

to delay for 2 years the implementation 

of the importation of Hass avocados 

from Mexico into all 50 States. Rather, 

APHIS will allow for the immediate 

importation of those avocados into all 

States except for California, Florida, and 

Hawaii, which are avocado producing 

States, to monitor the program and 

gather efficacy data under production 

conditions during all months of the 

year. While APHIS has concluded in the 

risk assessment that there is low 

likelihood of introduction of fruit flies 

based on the findings of the Aluja et al.

study, as well as the conclusion of ARS 

that commercial program Hass avocados 

are a ‘‘very poor host’’ of Mexican fruit 

fly and our own analysis of detections 

based on over 10 million fruit sampled 

over 6 years of the import program, we 

believe the delay will offer the 

opportunity to further substantiate these 

findings. In the risk assessment, APHIS 

was asked to determine the likelihood of 

introduction of quarantine pests of 

concern in program Hass avocados from 

Mexico. Based on the above evidence 

presented in the risk assessment, a 

finding of ‘‘non-host’’ for Anastrepha 

spp. fruit flies was not necessary for 

APHIS to draw the conclusion of low 

likelihood of introduction. During the 

near future, however, APHIS plans to 

work with Mexico, ARS, and 

independent researchers in the 

scientific community to form a 

consensus on the host status issue of the 

Hass avocado and Anastrepha spp. fruit 

flies. 

Comment: To protect our avocadogrowing States from inadvertent 

transmission of infested fruit, buffer 

zones of additional States is a must. 

There is ample clientele for Mexico to 

sell, promote, and educate outside our 

vulnerable areas. Mexican producers’

insistence to sell fruit in California and 

other growing areas shows proof of their 

intent to destroy their competitors by 

causing pest infestations in an area that 

would not have the tools to deal with 

the infestation because of government 

regulations. 

Response: APHIS has determined that 

the likelihood of introduction of 

quarantine pests of concern would not 

be significantly reduced by buffer States 

any more than just prohibiting 

movement into or through California, 

Florida, and Hawaii for 2 years for the 

following reasons: 

1. The likely buffer States, which 

would be Alabama, Arizona, Georgia, 

Nevada, and Oregon, do not produce 

avocados or have special quarantine 

regulations against avocados moving 

through their States or moving into the 

prohibited States, but California and 

Florida do have adequate quarantine 

regulations against certain agricultural 

products moving within them. Since 

Hawaii is an island, it would not need 

‘‘buffer States.’’

2. The avocado-growing area of 

Florida is confined to the southern half 

of the peninsula, therefore the State’s 

northern counties serve as buffers to the 

producing counties. The avocadogrowing areas of California are more 

extensive, but they are either bordered 

Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 69761

by the Pacific Ocean on the west, large 

expanses of mainly desert counties of 

California or desert areas of Nevada and 

Arizona to the east, a wide expanse of 

non-avocado-growing counties to the 

north, and Mexico to the south. 

Comment: I strongly oppose any 

provisions that would allow Mexican 

Hass avocados to enter Florida until at 

least 1 year’s worth of monitoring data, 

both within Mexico and shipments to 

other States, has been collected to 

demonstrate that the shipments are free 

of plant pests of quarantine significance. 

Scientific data should be provided that 

proves that the Mexican Hass variety of 

avocados is, under all environmental 

conditions, resistant to all fruit flies 

known to be established in Mexico. 

There is concern that environmental 

conditions may cause the avocado to 

ripen prematurely while still on the tree 

and therefore making it susceptible to 

fruit flies. I would also like to receive 

information regarding the 

Mediterranean fruit fly trapping 

program that is being utilized in Hass 

avocado production areas in Mexico. 

Response: As previously stated, 

APHIS is implementing a 2-year delay 

on the importation of Hass avocados 

from Mexico into California, Florida, 

and Hawaii. Additionally, in their 

review of the Aluja et al. fruit fly 

research, ARS noted that there were 

some larvae that developed in a few 

infested fruit, that the conditions 

enabling the larvae to develop were not 

known, and that viable adults were not 

produced. Even allowing for the few 

larvae, ARS experts still concluded that 

the fruit were a ‘‘very poor host’’ of 

Mexican fruit fly. The Aluja et al.

research included fruit at all levels of 

maturity including fruit off of the tree 

that had been allowed to ripen for three 

hours. The conclusion was that fruit 

still on the tree was not a host for the 

fruit fly. 

The Mexican Mediterranean fruit fly 

trapping areas include all of the 

avocado-growing areas of Michoacan. 

APHIS monitors all aspects of the pest 

detection protocol in all avocado 

producing municipalities that export to 

United States, including trapping for 

Medfly. Under our regulations, Medfly 

is trapped at a density of 1 trap per 1 

to 4 square miles. Any findings of 

Medfly must be reported to APHIS. 

Comment: There are a number of 

issues of concern not addressed in the 

underlying research and the APHIS risk 

assessment used to justify the expansion 

of the Mexican Hass avocado import 

program. These issues are: 

• The APHIS risk assessment does 

not provide scientific data covering 

phenology of fruit or the changes in 

soluble solids throughout the year as it 

relates to pest infestation; 

• Traceback methods have been 

ineffective in the past; 

• The movement of fruit from an area 

of low pest prevalence may not be 

accurate. The number of infested fruit 

could be much higher than predicted; 

• There is no information about 

temperature ranges during exposure 

period and effect of temperature 

changes on quarantine pests; 

• USDA has never clarified how the 

Mexican fruit fly infestation entered 

Valley Center, CA, in 2002.

Response: The Aluja et al. study did 

include the summer months June, 

August, and September as well as other 

months, fruits of a range of sizes that 

were commercially mature, and mature 

fruit attached to the tree as well as off 

the tree. This covered a range of fruit 

sizes and soluble solid ranges. APHIS 

and ARS both concluded, based on the 

study, that the fruit were a very poor 

host for Mexican fruit fly. Fruit of a 

range of sizes and solid content have 

been present on the trees during the 6-

month shipping season, and only 

mature fruit are exported, which may 

represent a range of soluble solid 

contents. Sampling is done throughout 

the shipping period as well as in the 

orchards before the season, so a range of 

soluble solid contents that may occur in 

mature fruit would be in the sampled 

fruit. The shipping season, which has 

occurred during a 6-month period with 

wide temperature fluctuations, and the 

inspections conducted during that 

period were considered in the risk 

assessment. The risk assessment 

describes fruit sampling by other 

researchers that included most months 

of the year when pests would be likely 

to be found. 

Regarding tracebacks, because no 

infested exported fruit have been 

detected in 6 years of sampling, no 

tracebacks have been necessary in the 

program. However, because of required 

labeling on the boxes, the necessary 

information is available to trace fruit 

back to packinghouses and orchards if 

necessary. 

Additionally, APHIS has monitored 

infestation through inspection of 

program exported fruit. Predictions of 

infestation are based on the inspections. 

The ‘‘area of low prevalence’’ concept is 

not an element of the systems 

approaches that is relied upon under the 

importation program. In relation to fruit 

flies, orchard trapping and subsequent 

eradication if there is a detection are 

required under the program. 

Finally, as stated previously, the 

Valley Center infestation stemmed from 

unknown origins and not from a legally 

imported commercial Hass avocado 

shipment from Mexico, which were 

prohibited from entering California. The 

Mexican fruit fly could have been 

introduced into California through a 

number of pathways, including the 

smuggling of many different kinds of 

fruit. 

Comment: Allowing Mexican 

avocados into California would be a 

signal to the public that it is permissible 

to bring avocados across the border from 

sources that have not been inspected. 

Therefore, USDA should formulate a 

rule that includes a permanent 

provision to not allow Mexican Hass 

avocados to be imported into California 

or any other avocado-producing State. 

Response: It is stated in the 

regulations that commercial shipments 

of Hass avocados from Mexico cannot be 

imported or distributed into California, 

Florida, and Hawaii for the first 2 years 

of the expanded importation program. 

Inspectors will continue to check 

returning travelers for unapproved 

agricultural commodities, including 

avocados. Our regulations are 

enforceable under the provisions of the 

Plant Protection Act. 

Comment: Based on the results 

reported in the Aluja et al. study, which 

established that the avocado should be 

considered a non-host for Anastrepha

spp. fruit flies, we request that A. ludens

and A. striata be removed from the list 

of pests of Hass avocados grown in 

Mexico that follow the pathway. 

Response: APHIS has concluded in 

the risk assessment that there is low 

likelihood of introduction of fruit flies 

based on the finding of ARS that 

commercial program Hass avocados are 

a ‘‘very poor host’’ of Mexican fruit fly, 

and on analysis of detections based on 

over 10 million fruit sampled over 6 

years of the import program. During the 

near future, however, APHIS plans to 

work with Mexico, ARS, and 

independent researchers in the 

scientific community to form a 

consensus on the host status issue of the 

Hass avocado and Anastrepha spp. fruit 

flies. At that time we will evaluate all 

Anastrepha spp. fruit flies and 

determine which species should be 

removed from the pest list. 

Comment: For reasons not known, it 

appears that APHIS has accepted the 

unsupported and seemingly arbitrary 

opinion of ARS over the conclusions of 

a team of scientific experts, headed by 

one of the foremost fruit fly researchers 

in the world, after 2 years of exacting 

research on the precise issue, and 

subsequently peer reviewed and 

published in the Journal of Economic 

Entomology. In short, a three-page 

memo based upon the opinion of two 

69762 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

ARS researchers with limited history in 

this area, containing one reference to a 

study that was done on a different 

avocado, in a different environment, 

with different insects has overruled the 

years of painstaking research and the 

peer reviewed study published in the 

Nation’s leading relevant scientific 

journal. 

Even the California Avocado 

Commission (CAC) supports this 

concept. On December 20, 2002, in a 

letter to Dr. Richard Dunkle, Deputy 

Administrator, USDA–APHIS–PPQ, an 

official of the CAC requested an 

‘‘alternative protocol’’ that would allow 

Hass avocado growers in the core area 

of the Valley Center Mexican fruit fly 

outbreak in California the opportunity 

to harvest and distribute Hass avocados 

under a system that mirrors the Mexican 

Hass avocado export program. Surely, 

the CAC would not make this request if 

they thought that the Hass avocado 

would pose the threat of moving 

Anastrepha spp. fruit flies out of the 

quarantined area into other areas of 

California and the country. 

Response: The claim that non-experts 

from ARS provided input is incorrect. 

Whereas those particular ARS experts 

may not have published extensively on 

fruit flies, a biological scientist is 

perfectly able to review documents for 

scientific validity. The input from ARS 

follows the tradition and guidelines of 

peer review, and the ARS experts did 

not say that the article from Aluja et al.

was invalid; rather the ARS experts 

offered their own interpretation of the 

scope and applicability of the findings. 

This information suggested that we 

should update our risk assessment, and 

we considered the ARS input in 

preparing our updates. We fully intend 

to continue to seek and incorporate ARS 

expertise and guidance in our risk 

analysis products. 

Comment: The Mediterranean fruit fly 

(Ceratitis capitata) is not present in 

Mexico. Only two outbreaks have 

occurred along the border between 

Chiapas and Guatemala, which were 

treated through the National C. capitata 

Campaign, in which the Governments of 

the United States, Mexico, and 

Guatemala participate, and those 

outbreaks were controlled. For this 

reason, there is no justification for 

establishing measures to prevent the 

introduction of this pest by means of the 

entry of Mexican Hass avocados into the 

United States, since the avocado 

exporting zone is located far away from 

the site of the outbreaks in Chiapas. 

Response: While the Mediterranean 

fruit fly is currently considered 

eradicated in Michoacan, there have 

been occasional limited outbreaks 

beyond those cited by the commenter. 

Therefore, APHIS will continue 

monitoring for Medfly. APHIS continues 

to consider Mediterranean fruit fly 

monitoring and control as important 

elements of the Hass avocado program 

systems approach, as avocados are 

considered to be a good host of 

Mediterranean fruit fly. The pest is 

regarded in the risk assessment as a 

quarantine pest that could be in the 

pathway if it is detected in the avocadoproducing area. 

Comment: An expansion of the 

Mexican Hass avocado import program 

will lead to increased air pollution and 

unsafe Mexican truck traffic. 

Response: USDA has no authority 

over emissions or safety standards for 

Mexican trucks.

Comments on the Economic Analysis 

A number of commenters raised 

issues regarding the economic analysis 

that accompanied the proposed rule. 

These issues are grouped into three 

sections: The model and analysis, 

effects for California avocado producers, 

and other comments. 

The Model and Analysis 

Comment: The base period for the 

analysis is October 15, 2000, through 

October 15, 2002, with base figures 

being an average of these 2 years. A 

possible problem with the use of these 

2 years is that the rules for Mexican 

avocado imports changed, effective 

November 2001, and only 1 of the 2 

years included the expanded number of 

States and time period that are currently 

effective. This choice of base period 

tends to understate likely Mexican 

imports. 

Response: We agree with the 

commenter and have changed the 

baseline used in the analysis for this 

final rule to the 2-year period October 

15, 2001, to October 15, 2003. 

Comment: There is evidence that the 

producer level price elasticity of 

demand may be even less than the 

¥0.57 [used in the proposed rule]. If a 

more inelastic coefficient were used 

(¥0.50 or lower), the estimated price 

impacts of Mexican imports on 

California producers would be greater, 

especially in the short run. 

Response: USDA agrees with the 

commenter that price elasticity of 

demand seems to have generally 

decreased over time. However, year-toyear fluctuations occur, due to changes 

in real price levels. In the analysis for 

the proposed rule, the elasticity of 

demand was adjusted downward from 

an earlier study (‘‘An Economic 

Evaluation of California Avocado 

Industry Marketing Programs 1961–

1995,’’ by Hoy F. Carman and R. Kim 

Craft, Giannini Foundation Research 

Report Number 345, University of 

California, July 1998), from ¥0.75 to 

¥0.57. In the analysis for this final rule, 

the price elasticity of demand used for 

California avocados is ¥0.63, based on 

the parameters estimated in Carman and 

Kraft and the observed level of percapita consumption and the real 

producer price of California avocados 

from our baseline data. This elasticity is 

somewhat higher than that used in the 

analysis for the proposed rule due to a 

higher real producer price in the new 

baseline. 

The commenter provides an equation 

by which he has estimated a price 

elasticity of ¥0.53 at average prices and 

quantities, and an average of ¥0.44 for 

the period 1996/1997 through 2000/

2001. (We presume that the description 

of Qt as consumption of avocados from 

all sources is a notational error, since 

the equation is supposed to represent 

the demand function for only California 

avocados.) 

The small changes suggested by the 

commenter would affect the results of 

the analysis insignificantly. As the 

commenter himself states, ‘‘Estimated 

coefficients from a recent demand 

function indicate that the f.o.b. [free-onboard] level price elasticity of demand 

for California avocados may be slightly 

more inelastic than ¥0.57, but this 

should have only a small effect on the 

final estimates.’’ The overall 

conclusions of the study in terms of net 

social benefits of the rule would still 

hold. 

Comment: Mexico’s market share in 

currently approved States during Period 

1 (October 15 through April 15) is 

understated in the analysis for the 

proposed rule because the baseline is 

not current. A more current baseline 

would show Mexico’s larger market 

share, thereby affecting the shift 

parameters and resulting in larger 

Mexican imports. 

Response: We agree with the 

commenter. Based on the updated 

baseline (October 15, 2001, to October 

15, 2003) used in the analysis for this 

final rule, we find nearly an 11 percent 

increase in Mexico’s market share in the 

currently approved region and time 

period, from 57.5 percent to 68.3 

percent. 

Comment: The retail food sector has 

significant market power. At the very 

least, the analysis should point out that 

retailers (middlemen) will use their 

market power to capture a portion of the 

welfare gains. 

Response: If food retailers do possess 

some degree of market power in pricing 

avocados, we agree that retailers will 

Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 69763

use their market power to capture some 

of the welfare benefits. However, this 

will largely represent a change in the 

distribution of the welfare gains from 

the proposed rule, with some of the 

benefits being transferred from 

consumers to retailers. There will be 

some increase in the deadweight loss 

due to an increase in the retail margin, 

but the magnitude of deadweight loss is 

typically a very small portion of the 

overall welfare change. 

As the commenter suggests, we 

acknowledge in the analysis for this 

final rule that if retailers do possess 

market power in the pricing of 

avocados, a portion of the welfare gains 

to consumers will be transferred to 

retailers, with a resulting small 

deadweight loss. In this case, the overall 

welfare gain will be slightly overstated. 

Comment: The price elasticity of 

supply used in the analysis, 0.35, is 

overly elastic. Perennial crop acreage 

adjustments are lagged and occur over 

many years. California production will 

change very little in the first year or two 

after a rule change, with the result that 

prices may be lower than projected for 

several years. The decrease in supply 

will occur over time as some producers 

go out of business and others remove 

trees in response to low prices and 

returns.

Response: The elasticity of supply 

used in the analysis for the proposed 

rule was based on elasticities used in 

previous avocado studies. We agree 

with the commenter that there will be 

limited opportunity for producer 

adjustments during the first year 

following publication of the final rule. 

In the analysis for the final rule, the 

time assumed for moving to the new 

equilibrium is 2 years. Due to the 

uncertainty of the magnitudes of the 

supply and demand elasticities in the 

model, we conduct a sensitivity analysis 

that considers alternative elasticity 

values. For the supply elasticity, we 

consider a range of 0.05 to 0.65. As is 

reported in the analysis accompanying 

this final rule, the estimated standard 

deviations of the estimated changes in 

the producer price of California 

avocados are relatively small. Thus, the 

model results are not very sensitive to 

the choice of the value of the supply 

elasticity within this range. 

Comment: The initial values for the 

shift parameters for Region A during 

Period 1 should be applied to Regions 

B and C during Period 1. Adjustment of 

the shift parameters for Period 2 (April 

15 to October 15) in all three regions 

will be a judgment call. I suggest that 

the parameter for Mexico must be 

increased significantly (at least to 

midway between Chile’s parameter for 

Period 2 and Mexico’s parameter for 

Region A, Period 1), with proportional 

reductions in the parameters for the 

United States and Chile. 

Response: For time period 1, we 

disagree that the initial values of the 

shift parameters for Region A should be 

applied to Regions B and C. First, 

consumers in Region A have been able 

to purchase fresh Hass avocados from 

Mexico for an extended period of time; 

since 1997 for some consumers. Because 

individual preferences are usually 

thought to evolve slowly over time, 

applying the shift parameters for Region 

A to the other regions during Period 1 

would likely overstate the increase in 

demand for Mexican avocados. We 

believe that it is more likely that 

consumers in Regions B and C will 

maintain a slight preference for 

California avocados, at least in the short 

run. This belief is based on the 

observation that the quantity market 

shares for avocados from California and 

Chile for Regions B and C in the 

baseline data for the final rule are 

almost equal. The wholesale price 

premium for California avocados in both 

regions implies a preference towards 

California avocados. (The initial values 

of the shift parameters are 

approximately 0.6 for California 

avocados and 0.4 for Chilean avocados.) 

This preference may be a result of 

marketing activities by the Californian 

Avocado Commission or consumer 

perceptions that fruit from California is 

fresher than fruit from Chile. In the 

analysis of the final rule, the shift 

parameters for Regions B and C during 

Period 1 are adjusted to 0.4 for 

California avocados and 0.3 each for 

Chilean and Mexican avocados. 

For period 2, we disagree with the 

commenter that the shift parameters for 

Mexican avocados should be increased 

significantly. Due to seasonality in 

production, we believe that the 

preference parameter for Californian 

avocados should be higher in Period 2 

than in Period 1. More fresh avocados 

are available from California than from 

Chile and Mexico during the summer 

months and therefore the shift 

parameter for California avocados 

should be larger for this time period. In 

the analysis accompanying this final 

rule, the shift parameters for California 

avocados in Regions A and B are 

approximately equal to 0.65, and the 

preference parameters for Chilean and 

Mexican avocados are each 

approximately equal to 0.175. Using this 

pattern of shift parameters, the 

empirical model estimates that 

approximately 60 percent of total 

Mexican and Chilean exports will occur 

during Period 1. This closely matches 

historical seasonal export shares for 

both Mexico and Chile.

Comment: Mexican producers with 

avocados certified for export to the 

United States have a choice to ship to 

the United States or to a domestic 

Mexican market, with the choice of 

shipping destination based on where the 

avocados will return the highest net 

price to the producer. Given average 

wholesale prices in Mexico, I would 

expect Mexican producers to continue 

to ship avocados to the United States 

until U.S. prices decreased to that 

available for domestic shipments. I do 

not have the ‘‘break-even’’ producer 

price for Mexican shipments to the 

domestic or U.S. export markets, but it 

could be estimated. I would expect this 

price to be significantly less than $0.63 

per pound (the producer price used in 

the analysis for the proposed rule); 

perhaps less than $0.50 per pound. A 

realistic Mexican farm price for analysis 

of the proposed rule change, one that 

accounts for domestic marketing 

opportunities in Mexico, should be 

estimated and entered into the model. 

Response: Mexico exports only about 

one-tenth of its production (in 2002, 

about 94,243 metric tons out of 897,231 

metric tons), so we would generally not 

expect export prices to have a large 

effect on Mexico’s domestic prices. 

Moreover, the export and domestic 

markets are different in their production 

requirements. For exports to the United 

States (the destination of half of 

Mexico’s exports in 2003), the required 

risk mitigation measures mean higher 

costs of production—costs readily borne 

because of the much higher net returns 

compared to domestic sales. We expect 

that most of Mexico’s avocado 

producers have limited access to export 

opportunities because they cannot 

satisfy the risk mitigation requirements, 

and perhaps because of commercial and 

infrastructural limitations as well. 

Mexican growers, however, are 

currently exporting to the United States 

only a fraction of the avocados they 

could export from already approved 

orchards and municipalities in the State 

of Michoaca ́n, thus the rule does assume 

a substantial increase in imported 

Mexican avocados. 

We agree with the commenter that 

producers with certified fields will 

prefer to export to the United States as 

long as there is an export premium to be 

gained. Because the average U.S. 

wholesale price of Mexican avocados is 

substantially less than the wholesale 

prices of California and Chilean 

avocados, we would not expect 

significant decreases in the U.S. 

wholesale and farm prices of Mexican 

avocados. Thus, we believe that any 

69764 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

price premium enjoyed by Mexican 

producers from exporting to the United 

States will be maintained. Because 

exports are a small share of total 

avocado production in Mexico, even a 

large increase in exports will not likely 

substantially affect the Mexican 

domestic price. 

Comment: The analysis assumes that 

recent price differentials between 

California, Chilean, and Mexican Hass 

avocados will continue. I believe that a 

portion of the differential will disappear 

over time as Mexican shippers improve 

their quality of pack and as they 

establish relationships with large U.S. 

buyers. 

Response: The model does indicate a 

reduction in price differentials with the 

increase in imports from Mexico, as 

shown in the following table of the 

results of the analysis for the proposed 

rule.

Wholesale 

prices in the 

initial

equilibrium 

Wholesale 

prices with 

the rule 

Supply region: 

California ....... $1.63 $1.43 

Chile .............. 1.29 1.20 

Mexico ........... 1.14 1.14 

Price differences: 

CaliforniaChile .......... 0.34 0.23 

Chile-Mexico 0.15 0.06 

Mexico-California .......... 0.49 0.29 

Comment: We generally concur with 

the evaluation and offer the following 

perspectives for consideration in 

reviewing the model. We believe that 

the increase in consumption of 10.4 

percent utilized in the model may be 

overly conservative. The introduction of 

Mexican grown avocados over a period 

of 7 years has resulted in an increase of 

over 400 percent in the consumption of 

avocados in the approved States. We 

believe that the quality of Mexican 

avocados, coupled with targeted 

promotional activities, may likely yield 

a higher growth in consumption than is 

assumed within the model. We believe 

that the impact of future imports from 

Chile will have a greater effect than is 

being projected in the model. Chilean 

avocado growers have invested 

significantly in new avocado groves that 

will increase the volume of fruit 

exported to the United States in the near 

future. Approximately 95 percent of 

Chilean avocado exports are destined 

for the U.S. marketplace, and it is 

unlikely that these exports will be 

reduced regardless of the opening of the 

U.S. marketplace to Mexican Hass 

avocados. We believe that greater 

consideration should be given to the 

impact that the proposed rule will have 

on the domestic Mexican avocado 

market. We believe that historical 

domestic consumption rates coupled 

with the reaction of prices in the 

domestic Mexican markets as a result of 

decreases in the domestic supply of 

avocados will have a significant impact. 

If Mexican domestic prices increase 

substantially, it is likely that the 

Mexican avocado producers will choose 

to supply quantities that are less than 

those contemplated in the model. A 

significant adjustment in volumes from 

those assumed in the model may have 

a considerable impact on the results of 

the analysis. 

Response: We acknowledge the 

significant growth in consumption of 

avocados from Mexico in the approved 

States, but also note that this is the 

region and time period of weakest 

demand for California avocados. We do 

not expect the same market dominance 

by Mexican imports in the currently 

non-approved States, especially during 

the summer months. 

The model shows continued strong 

participation in the U.S. avocado market 

by Chile. Notwithstanding the expected 

decline in prices earned and quantities 

supplied by that country, the model 

shows that with the rule, prices and 

quantities of Chilean avocados will 

remain higher than those of Mexican 

avocados. 

The difference between Mexican 

domestic and export wholesale avocado 

prices is significant. Compared to an 

average wholesale price during the 

baseline period in the United States of 

$1.08 per pound, the average wholesale 

price per pound in Mexico was $0.46 in 

2001, $0.37 in 2002, and $0.46 in 

January through October 2003. There 

will be price adjustments in Mexico in 

response to increased exports to the 

United States, but we do not believe that 

increases in Mexican domestic prices 

will significantly affect expected export 

levels. 

Comment: I believe that the USDA is 

being negligent in concluding that the 

U.S. economy will have a significant net 

welfare benefit from the proposed rule. 

According to your own economic 

analysis (May 19, 2004), the proposed 

rule will result in a net welfare loss of 

somewhere around $85 million to the 

California avocado producers. However, 

in that same analysis you admit that you 

cannot reasonably predict the impact to 

the California producer. In fact, you 

conclude that the cost to producers 

could be as high as $114 million. 

Shouldn’t we know with reasonable 

certainty whether it will cost producers 

$114 million or not? It is important to 

know because if the impact is $114 

million, it will substantially eliminate 

the $115 million gain to the consumer.

Response: The results of the analysis 

for the proposed rule were tested for 

their sensitivity to changes in the 

parameters used in the model. The 

range in values from the sensitivity 

analysis for the loss in producer surplus 

did include $114 million as an extreme 

upper end-point value. Larger losses in 

producer surplus for Californian 

producers are associated with larger 

decreases in the price of California 

avocados, which also create larger 

welfare gains for consumers. In the 

preliminary economic analysis (May 19, 

2004), the net change in U.S. welfare 

was approximately $31 million with a 

standard deviation of $2.3 million. 

Assuming a normal distribution, a 95 

percent confidence interval for the net 

change in welfare would be 

approximately $26.5 million to $34.5 

million. 

Comment: The analysis reports that 

small entities are a factor to be 

considered, and that 98 percent of the 

producers are small entities. However, it 

does not report how much weight is to 

be given to this factor. I believe that it 

should be given much weight. This 

proposed rule could wipe out 6,500 

avocado growers for the benefit of a 

handful of large Mexican avocado 

producers. Other ramifications would 

include the handlers, the fertilizer 

suppliers, the grove managers, 

equipment suppliers, the City of 

Fallbrook, CA, etc. Are these 

ramifications insignificant to the USDA? 

If not, then why have they not been 

accounted for? 

Response: As discussed in other 

responses, the California avocado 

industry will not be eliminated by the 

rule, although producers will incur 

price and quantity declines due to 

increased avocado imports from Mexico. 

Expected losses for California’s 

producers are evaluated as part of the 

expected benefits and costs of the rule. 

As stated in the Small Business 

Administration’s ‘‘A Guide for 

Government Agencies: How to Comply 

with the Regulatory Flexibility Act 

[RFA]’’ (page 1): ‘‘The RFA does not 

seek preferential treatment for small 

entities, require agencies to adopt 

regulations that impose the least burden 

on small entities, or mandate 

exemptions for small entities.’’

We recognize that their will be 

indirect and induced effects of the rule, 

especially in avocado-growing localities. 

We note that while some U.S. entities 

will be indirectly affected negatively, 

others will benefit indirectly from the 

increase in imports from Mexico. 

Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 69765

Comment: An in-depth economic and 

business assessment should be done to 

take the needed measures to avoid a 

negative impact in the agricultural 

businesses of California and Texas. 

Response: An economic and business 

assessment of measures that could be 

taken to avoid negative agricultural 

impacts is beyond the scope of the 

regulatory impact analysis. 

Comment: How is it Chile presently 

ships in avocados with no appreciable 

drop in price? We know this because we 

hear a common complaint from friends 

who say the fruit seems to get smaller 

but stays the same price. 

Response: The increased supply of 

Mexican avocados will result in lower 

wholesale and producer prices for 

Californian and Chilean suppliers. Chile 

has exported avocados to the United 

States for many years, and the impact of 

imports from Chile on the aggregate 

price for avocados would need to be 

considered in terms of a base period. 

The aggregate price for avocados and 

relative prices for California, Chilean, 

and Mexican avocados depend on a 

variety of market influences, including 

promotional activities. 

Comment: Increased imports from 

Mexico would increase consumption of 

all avocados.

Response: We expect that increased 

supply of Mexican avocados will cause 

a reduction in the demand for higherpriced avocados from California and 

Chile, and an increase in the total 

demand for avocados. 

Comment: The analysis of effects for 

small entities should be redone using 

the 2002 Census of Agriculture. 

Response: In the analysis prepared for 

this final rule, we cite the 2002 Census 

of Agriculture. 

Effects for California Avocado 

Producers 

A number of commenters emphasized 

the financial hardship and negative 

economic effects the rule will cause 

California avocado producers, with 

several stating that jobs will be lost and 

avocado farms will be put out of 

business. 

Three examples of these types of 

comments are the following: 

• USDA’s economic analysis 

estimated that opening all of the United 

States all year to Mexican imports will 

reduce the price that California growers 

receive by about 20 percent. When you 

consider that avocado growers in the 

United States make less than a 10 

percent margin on their crops, this 

proposal will mean an end to avocado 

production in the United States. 

• Our county has enacted laws 

restricting the use of agricultural land 

for any other purposes. These types of 

laws have been upheld in court. 

Because Mexico clearly has cost 

advantages that cannot be enjoyed in the 

United States, many of our farms may 

no longer be economically viable. Our 

farms cannot be retooled like factories to 

produce different parts. We have trees 

that would have to be destroyed and 

replanted with other crops. Many 

growers are in situations like mine 

where the only possible alternate crop is 

lemons. It would take over 5 years and 

enormous costs to make that change. 

Right now that does not look like a 

practical option. 

• The California avocado industry is 

made up almost entirely (98 percent) of 

small business entities. Most of these 

entities are likely to go out of business 

if the proposed rule is implemented. 

What now brings $330 million into the 

U.S. economy, and provides tens of 

thousands of jobs, could be destroyed 

forever. 

The following comment received from 

the Office of Advocacy of the U.S. Small 

Business Administration encapsulates 

many of these issues: 

‘‘APHIS documented the impacts as a 

percentage of revenue lost in California, 

but it doesn’t go the next extra step to 

examine how that might impact 

growers. The agency should determine 

profit margins for growers and examine 

how the impact will affect their bottom 

line, perhaps by using average industry 

profit margins for appropriately sized 

agricultural firms. This could reveal a 

potentially important impact caused by 

one parameter in the model. 

Specifically, very inelastic supply of 

avocados by California producers means 

that while prices fall dramatically, 

California growers don’t reduce 

production much. Thus, California 

producer costs do not decrease nearly as 

much as their revenues, which drop 

over 30 percent. This undoubtedly will 

strain profit margins and suggests that 

there potentially could be significant 

business closures among growers—

particularly among very small growers—

who may exit the market. APHIS should 

consider completing a profitability 

analysis that will assess the possibility 

of business closures. Ideally, the model 

should also include a more long run 

market analysis that will allow entry 

and exit of producers. It seems likely 

that with the possibility of exit, and the 

relatively elastic supply of Mexican 

avocados, the losses to California 

growers will be greater in the long run 

than in the short run.’’

Response: California producers will 

be economically harmed by the rule, but 

not as severely as they would be if there 

were no delayed access of Mexican Hass 

avocados into California, Florida, and 

Hawaii. As shown in the analysis for 

this final rule, we have no reason to 

expect the demise of the California 

avocado industry. 

The question of effects of the rule on 

small entity profit margins is not easily 

addressed. Each avocado farm draws 

upon a unique set of human and capital 

resources and marketing arrangements 

that define its financial position and 

prospects. Profit margins vary among 

firms and from one season to the next. 

Nonetheless, the Agency agrees with the 

commenter that small-entity producers 

with recent histories of small or 

negative profit margins may be placed at 

risk by the rule. 

As an indicator of possible effects, we 

reproduce in the following table part of 

the results of a profitability analysis 

published in 2002. The table shows 

returns to management (returns per acre 

above cash and non-cash costs) for 

various price-yield combinations. For 

example, for a yield of 5,000 pounds per 

acre, a drop in price from $1.10 to $1.00 

per pound would mean returns to 

management declining from $276 per 

acre to a negative $224 per acre. 

The profitability analysis was based 

on avocado orchard establishment and 

production practices considered typical 

in Ventura and Santa Barbara Counties. 

The results are applicable to the 

economic analysis to the extent that 

costs and returns in Ventura and Santa 

Barbara Counties in 2001 are similar to 

those for California Hass avocado 

producers generally between October 

2001 and October 2003. With the rule, 

California producer prices are shown to 

fall from $1.02 to $0.81 per pound. 

Using the price-yield combinations from 

the table, farms with yields of at least 

7,000 pounds per acre would still show 

positive returns to management 

(although total returns would be 

reduced due to the 7.3 percent decline 

in California’s overall supply indicated 

by the model). Farms with yields of 

6,000 pounds per acre would move from 

positive to negative returns to 

management. Farms with yields of 5,000 

pounds per acre or less would probably 

not be providing positive returns to 

management to begin with, given the 

initial baseline price of $1.02 per 

pound. The 2003–2004 estimated 

average yield for Hass avocado orchards 

in California is 6,865 pounds per acre 

(California Avocado Commission,

http://www.avocado.org/growers/pages/

2000_38.php?sd=growers).

69766 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

RETURNS TO MANAGEMENT PER ACRE FOR VARIOUS YIELDS AND PRICES, VENTURA AND SANTA BARBARA COUNTIES, 

2001

Yield in pounds per acre 

3,000 4,000 5,000 6,000 7,000 7,500 8,000 9,000 

10,000 

Dollars 

per acre 

Dollars/pound: 

$0.70 ............................................ ¥$2,871 ¥ $2,298 ¥$1,724 ¥$1,151 ¥$557 ¥$290 ¥$4 $570 $1,143 

0.80 .............................................. ¥2,571 ¥1,898 ¥1,224 ¥551 123 460 796 1,470 2,143 

0.90 .............................................. ¥2,271 ¥1,498 ¥724 49 823 1,210 1,596 2,370 3,143 

1.00 .............................................. ¥1,971 ¥1,098 ¥224 649 1,523 1,960 2,396 3,270 4,143 

1.10 .............................................. ¥1,691 ¥698 276 1,249 2,223 2,710 3,196 4,170 5,143 

1.20 .............................................. ¥1,371 ¥298 776 1,849 2,923 3,460 3,996 5,070 6,143 

1.30 .............................................. ¥1,071 102 1,276 2,449 3,623 4,210 4,796 5,970 7,143 

Source: Table 7 of ‘‘Avocado Sample Establishment and Production Costs and Profitability Analysis for Ventura and Santa Barbara Counties, 

Based on 2001 Data Collected in Ventura and Santa Barbara Counties, California,’’ by Etaferahu Takele, Ben Faber, and Silvana Chambers, 

UCCE Southern California. 

The rule may contribute to some 

small entity avocado farms failing, if 

their operation is already showing 

borderline returns. We note that the 

California avocado industry has been 

trending toward fewer operations, with 

expansion only among the very largest 

producers. Overall, the number of 

avocado farms in California dropped by 

nearly 20 percent between 1997 and 

2002, from 5,963 to 4,801 farms. This 

decline in the number of avocado farms 

is on top of a 16 percent decline 

between 1992 and 1997. There was a 

decrease in the number for farms of all 

sizes except those with 100 or more 

acres (which increased in number from 

99 in 1997 to 114 in 2002), and the 

smaller farms experienced the larger 

percentage declines. Even without this 

rule, avocados farms are becoming 

fewer, with the sharpest decline for 

those of smallest size. 

Comment: APHIS should analyze the 

potential impact to the very small 

growers with less than 5-acre plots, and 

potentially those in the next higher size 

category as well. As it stands, the 

analysis for the proposed rule mentions 

only that it is likely these growers 

produce other agricultural products in 

addition to avocados because of the 

small revenue earned from avocado 

production. To analyze profitability and 

business survival, a proper baseline of 

revenues for these producers would 

need to be established, including 

revenues from all production, so that 

the losses from diminished avocado 

revenues could be properly analyzed. 

One way to accomplish this might be to 

assume that these growers would earn 

revenues equivalent to the average small 

farm in California. 

Response: In the analysis for the 

proposed rule, we took note of the large 

number of very small avocado farms. 

The 1997 Census of Agriculture data 

showed over half of the avocado farms 

that year harvested less than 5 acres. 

Average 1997 receipts for these farms 

was about $4,800.

We did not intend to imply that these 

smaller avocado producers grow other 

crops, but only that their average annual 

revenue from avocado production 

would necessitate other sources of 

income. We agree that to properly 

analyze impacts of the rule for small 

entities, we would need to have data on 

these other revenue sources, but this 

information is not available. If all 

revenue sources for small entity 

avocado producers could be obtained, it 

would likely indicate a wide range of 

income from a variety of sources. We 

have no basis for assuming that 

agricultural receipts for California’s 

small entity avocado growers are on 

average equivalent to revenues earned 

by other small entity farmers in that 

State. Other Comments 

Comment: In its analysis, APHIS 

mentions that California, Florida, and 

Hawaii produce avocados. However, the 

analysis included in the proposed rule 

only discusses the impact on California 

producers. While it is clear that Hawaii 

produces avocados for intrastate 

consumption, there should be some 

discussion of the impact of the rule on 

Florida producers. For example, the rule 

should identify the number of producers 

in Florida and estimate how many are 

small and thus will be impacted by the 

rule. 

Response: Production of Hass 

avocados in Florida and Hawaii is 

negligible, and therefore producers in 

those States will not be directly affected 

by the rule. The green-skin avocado 

varieties grown in Florida and Hawaii 

and Hass avocados grown in California 

are weak substitutes for one another and 

should not be compared, as evidenced 

by the large difference in their prices. 

The 2003–2004 average prices per ton 

were $2,170 for California avocados 

(where the Hass variety is dominant), 

$1,240 for Hawaii avocados, and $808 

for Florida avocados (USDA NASS, 

‘‘Noncitrus Fruits and Nuts 2003 

Summary,’’ July 2004). In the model, 

green-skin avocado varieties are 

included with other goods that compete 

with Hass avocados for the consumer’s 

dollar. Whatever indirect impacts the 

rule may have on small entity avocado 

producers in Florida and Hawaii are 

expected to be small, all the more so 

given the 2-year delay of entry of 

Mexican Hass avocados into those 

States. 

Comment: The permanent reduction 

in California avocado acreage because of 

the rule will lead to the loss of open 

space and costs of urbanization that are 

not taken into account in the analysis. 

Response: Replacement of avocado 

orchards by housing communities 

signifies the land acquiring greater value 

in another use. We acknowledge that 

non-market valuations may not be fully 

realized in the transaction. If an avocado 

orchard, even though privately owned, 

has additional value to society as open 

space, then theoretically, publicly 

allocated resources could be used to 

maintain the land in that use. It would 

be very difficult to identify over time 

the loss of open space and increased 

urban development attributable 

specifically to the rule. Even if it were 

possible, the sale and purchase of land 

and changes in land use reflect the nonuniform values and personal 

preferences of society. To speak only of 

the costs of urbanization neglects the 

welfare gains of those benefitting from 

the new communities. 

Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 69767

Comment: The following comments 

concerned zoning restrictions and how 

they may limit alternative uses of land 

where avocados are currently grown: 

I suggest that an economic impact 

report be made by a qualified U.S. 

economist, paid by Mexican growers, to 

understand the consequences of the 

elimination of the avocado industry in 

the San Diego and Ventura Counties, 

CA. The conclusion may well show that 

the citrus industry would be affected 

negatively by putting a crimp on the 

supporting industries. I am clearly 

aware that Ventura County has zoning 

ordinances to minimize development 

for that very reason. If it is so important 

to restrict land developments, there 

must be a very significant reason to 

maintain viability in the farming 

industry.

Our county has enacted laws 

restricting the use of agricultural land 

for any other purposes. These types of 

laws have been upheld in court. 

Because Mexico clearly has cost 

advantages that cannot be enjoyed in the 

United States, many of our farms may 

no longer be economically viable. Our 

farms cannot be retooled like factories to 

produce different parts. We have trees 

that would have to be destroyed and 

replanted with other crops. Many 

growers are in situations like mine 

where the only possible alternate crop is 

lemons. It would take over 5 years and 

enormous costs to make that change. 

Right now that doesn’t look like a 

practical option. 

Response: If local governments 

require that land be kept in agricultural 

use regardless of its agricultural return, 

then the land’s public value as an 

agricultural asset or open space may 

exceed its private productive value. If in 

such circumstances avocado production 

for some producers were no longer 

viable and local land use restrictions 

would only allow the land to be used in 

its next best agricultural use, then 

private and public valuations may well 

diverge. 

Comment: Not only is it unfair to me, 

but unfair to the general population. 

Someone is not looking at the big 

picture. In my community, 80 percent of 

water usage is agricultural (avocados). 

This means that the water delivery 

system is paid for, in large part, by the 

growers. As soon as this rule takes 

effect, it no longer makes sense to water 

and I begin selling firewood. When I 

stop watering, the 20 percent of water 

users now have to pay for 100 percent 

of the delivery system resulting in 

domestic water rates tripling, or worse. 

Response: We can expect the land to 

be put to productive use, whether to 

grow avocados or for other agricultural 

or non-agricultural purposes. Water fees 

that are charged can be expected to be 

modified as uses of the land change. To 

the extent that water delivery costs are 

principally borne by avocado producers, 

there could be a cost realignment if land 

is moved from agricultural to nonagricultural uses. 

Comment: I believe the entire issue of 

‘‘free trade’’ is clouded by the reality 

that its beneficiaries are often not (as we 

would hope) independent producers in 

other countries gaining access, at a 

reasonable scale, to the U.S. market. 

Rather, the beneficiaries are more often 

American or multinational corporations 

that transfer production (and jobs) 

offshore on a massive scale to take 

advantage of relaxed trade rules, along 

with lower labor costs, more lenient 

environmental and safety regulations, 

and avoidance of U.S. taxation. Offshore 

competition at that scale is bad for 

everyone except the owners of the 

corporations involved. American 

consumers may enjoy lower prices for a 

while, but at whose expense? 

Response: The increase in Mexican 

avocado imports will benefit U.S. 

consumers and Mexican producers. 

Firms involved in the trade, including 

U.S. handlers and importers, will 

benefit as well. The range of 

beneficiaries will extend beyond owners 

of corporations. 

Comment: Imported fruits and 

vegetables will lower the price of nonorganic produce to a degree that 

California organic farmers will not be 

able to compete in the marketplace and 

will be forced to use non-organic 

techniques to survive financially. 

Response: Lower-priced, non-organic 

imports will reduce demand for 

organically grown produce to the extent 

that customers’ willingness to forgo 

organically grown produce is price 

responsive. The expected increase in 

Mexican avocado imports because of the 

rule will lead to lower avocado prices. 

We cannot comment on whether the 

price decline will affect demand for 

organically grown avocados.

Therefore, for the reasons given in the 

proposed rule and in this document, we 

are adopting the proposed rule as a final 

rule, with the changes discussed in this 

document. 

Executive Order 12866 and Regulatory 

Flexibility Act 

This rule has been reviewed under 

Executive Order 12866. The rule has 

been determined to be economically 

significant for the purposes of Executive 

Order 12866 and, therefore, has been 

reviewed by the Office of Management 

and Budget. 

This rule amends the regulations to 

expand the number of States in which 

fresh Hass avocado fruit grown in 

approved orchards in approved 

municipalities in Michoacan, Mexico, 

may be distributed and to allow the 

distribution of the avocados during all 

months of the year. For the first 2 years 

following the effective date of this rule, 

those avocados may be distributed in all 

States except California, Florida, and 

Hawaii; after 2 years, the avocados may 

be distributed in all States. We are 

taking this action in response to a 

request from the Government of Mexico 

and based on our finding that the 

phytosanitary measures described in 

this final rule will reduce the risk of 

introducing plant pests associated with 

Mexican Hass avocados into the United 

States. 

For this rule, we have prepared an 

economic analysis. The economic 

analysis contains cost-benefit analysis 

as required by Executive Order 12866, 

as well as a final regulatory flexibility 

analysis that considers the potential 

economic effects of this rule on small 

entities, as required by the Regulatory 

Flexibility Act. The economic analysis 

is summarized below. Copies of the full 

analysis may be obtained from the 

person listed under FOR FURTHER

INFORMATION CONTACT. In addition, the 

full analysis may be viewed on the 

Internet at http://www.aphis.usda.gov/

ppq/avocados/.

Summary of Economic Analysis 

Impacts are analyzed using a partial 

equilibrium model. Expected effects of 

two alternatives are compared: (1) 

Allowing Hass avocados from Mexico to 

enter all States year-round except 

California, Florida, and Hawaii, for 

which entry would be delayed 2 years 

(as set forth in the rule); and (2) 

allowing Hass avocados from Mexico to 

enter all States year-round with no 

delay for any States. 

The model describes three demand 

regions and three supply regions for two 

time periods. The three demand regions 

are: The 31 northeastern and central 

States (and the District of Columbia) 

currently approved to receive Hass 

avocado imports from Mexico during 

the 6-month period October 15–April 15 

(Region A); 15 Pacific and southern 

States, excluding California, Florida, 

and Hawaii, not currently approved to 

receive Hass avocados from Mexico 

(Region B); and California, Florida, and 

Hawaii (Region C). (Mexican Hass 

avocados have been allowed entry into 

Alaska since 1993.) The three supply 

regions in the model are California, 

Mexico, and Chile. Nearly all U.S. Hass 

avocado production takes place in 

69768 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

California. Over 96 percent of all Hass 

avocado imports are supplied by Chile 

and Mexico. The two time periods 

specified in the model are the 6-month 

period during which Hass avocado 

imports from Mexico are currently 

allowed, October 15–April 15 (Period 1), 

and April 16–October 14 (Period 2). 

Throughout the following discussion, 

‘‘avocado’’ refers only to fresh Hass 

avocados unless otherwise indicated. 

Currently, Mexico is exporting to the 

United States a fraction of the avocados 

that could be exported from approved 

orchards and municipalities in the State 

of Michoacan. For the market year 2003/

2004, an estimated 479 million pounds 

of avocados will be produced in 

certified areas. During the baseline 

period, October 15, 2001, to October 15, 

2003, annual imports from Mexico 

totaled 58.2 million pounds, or about 12 

percent of what currently could be 

certified for export to the United States. 

It is apparent that Mexican producers 

could readily expand avocado exports to 

the United States at the current price 

level. Compared to an average wholesale 

price during the baseline period in the 

United States for Mexican avocados of 

$1.08 per pound, the average wholesale 

price per pound in Mexico was $0.46 in 

2001, $0.37 in 2002, and $0.46 in 

(January through October) 2003. 

With respect to pest risks, a systems 

approach currently in place provides 

multiple safeguards against pest 

introduction. Risk mitigation measures 

include pest field surveys; orchard 

certification; and packinghouse, 

packaging, and shipping requirements. 

Since shipments into the conterminous 

United States began in 1997, cutting and 

inspection of over 10 million Mexican 

Hass avocados has not revealed any 

quarantine pests. 

The pest risk assessment for the rule 

finds an overall low likelihood of pest 

introduction, concluding with 95 

percent confidence that: 

• Fewer than 393 infested avocados 

will enter the 47 States each year. 

• Fewer than seven avocados infested 

with stem weevil, seed weevils and seed 

moth will enter avocado producing 

areas outside of California, Florida, and 

Hawaii each year. 

• Fewer than 98 avocados infested 

with fruit flies will enter fruit fly 

susceptible areas outside of California, 

Florida, and Hawaii each year. 

• Fewer than one avocado infested 

with stem weevil, seed weevils, or seed 

moth will be discarded in avocadoproducing areas outside of California, 

Florida, and Hawaii each year. 

• Fewer than five avocados infested 

with fruit flies will be discarded in fruit 

fly susceptible areas outside of 

California, Florida, and Hawaii each 

year.

Even if some infested avocados 

entered the United States, the likelihood 

of pest establishment and spread would 

require that: (1) The infested avocados 

must be in close proximity to host 

material; (2) the pests must find mates; 

(3) the pests must successfully avoid 

predation; (4) the adult pests must find 

host material; and (5) the climatological 

and microenvironmental conditions 

must be suitable. These factors 

substantially reduce the likelihood of 

establishment. The degree of pest risk 

reduction attributable to each of the 

factors has not been quantified. People 

generally consume the fruit they 

purchase and dispose of the waste 

material in a manner (such as in plastic 

bags that are land-filled or incinerated) 

that precludes the release of pests into 

the environment. The economic analysis 

examines expected effects of the rule 

and the no-delay alternative without 

quantifying the very small risk of pest 

entry and establishment. The difference 

in risk between the two alternatives is 

assumed to be negligible. 

The rule includes certain changes 

from existing risk-mitigating 

requirements. In the approved orchards 

in Michoacan, Mexico, surveys for the 

quarantine pests of concern will be 

increased from annually to 

semiannually, since the avocados will 

be allowed to be imported throughout 

the year. In the packinghouses, a sample 

of 300 avocados per consignment 

currently must be selected, cut, and 

inspected and found free from pests. 

APHIS is replacing the specific sample 

size of 300 fruit with a requirement for 

a biometric sample at a rate determined 

by the Agency to be appropriate for the 

size of the particular consignment. 

Currently, handlers and distributors 

are required to enter into compliance 

agreements with APHIS, as well as 

satisfy requirements regarding the 

repackaging of the avocados after their 

entry into the United States. These 

requirements are to ensure that handlers 

and distributors are familiar with the 

distribution restrictions and other 

requirements of the regulations, and to 

ensure that any boxes used to repackage 

the avocados in the United States bear 

the same information that is required to 

be displayed on the original boxes in 

which the fruit is packed in Mexico. 

The repackaging requirements will be 

maintained. However, APHIS has 

decided that requiring compliance 

agreements for 47 States is both 

untenable and unnecessary. For the 2 

years during which Hass avocados from 

Mexico will be prohibited from entering 

California, Florida, and Hawaii, there 

are appropriate safeguards such as fruit 

and package labeling, regulatory 

prohibition from importing into and 

transiting through these three States, 

and ample penalties for violation of 

these regulations under the Plant 

Protection Act. 

Currently, Hass avocados from 

Mexico may enter the United States 

only at certain ports. These port-of-entry 

limitations are intended to work in 

concert with the shipping area 

provisions to ensure that the avocados 

are moved by the most direct route to 

the approved States where they may be 

distributed. The port-of-entry 

limitations will be revised to allow Hass 

avocados from Mexico to enter all States 

except California, Florida, and Hawaii. 

If the avocados are moved by air, the 

aircraft will not be allowed to land in 

California, Florida, or Hawaii. Hass 

avocados as residue cargo on maritime 

vessels will not be offloaded in 

California, Florida or Hawaii. 

Costs related to any of these changes 

from the current requirements are 

expected to be small and not 

significantly influence the supply of 

Mexican avocados. Costs associated 

with risk mitigation changes in Mexico 

will be borne by Mexican entities.

Alternatives 

One alternative would be to leave the 

regulations unchanged. In this case, 

access of Mexican avocados would 

continue to be restricted to the 31 States 

and the District of Columbia currently 

approved to receive avocados from 

Mexico between October 15 and April 

15 (and Alaska year-round). 

With no rule change, demand for 

avocados from all three supply regions 

would continue to increase due to 

population and income growth, with the 

relative percentages supplied by 

California, Chile, and Mexico shifting in 

response to changes in relative prices 

and preferences. It is noted that 

Mexico’s avocado exports to the United 

States have been expanding rapidly 

(27.9 million pounds in 2001, 58.8 

million pounds in 2002, 76.8 million 

pounds in 2003), as it acquires a larger 

share of the market in the approved 

States between October 15 and April 15. 

During the baseline period (October 15, 

2001, to October 15, 2003), more than 68 

percent of avocado sales in this region 

and time period were supplied by 

Mexico, an increase of nearly 11 percent 

from its market share between October 

15, 2000, and October 15, 2002. 

The analysis that follows considers 

two alternatives to the status quo: The 

rule, which will allow access of 

Mexican avocados to all States yearround with a 2-year delay for California, 

Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 69769

Florida, and Hawaii, and the alternative 

of allowing Mexican avocados to enter 

all States year-round with no delays. 

The Model 

Both the rule, which includes the 2-

year delay in allowing avocados from 

Mexico into California, Florida, and 

Hawaii, and the no-delay alternative are 

compared to the baseline. Initial 

quantities and prices used as the 

baseline for the model are averages for 

the 2-year period October 15, 2001, to 

October 15, 2003. California producer 

prices are prices ‘‘out the packinghouse 

door’’ reported by the California 

Avocado Commission. Chilean and 

Mexican producer prices are unit import 

prices reported by USDA’s Foreign 

Agricultural Service. 

Wholesale price data are taken from 

prices reported in Wholesale Market 

Fruit Reports (various issues), by Market 

News Archive, USDA Agricultural 

Marketing Service. Prices for Mexican 

avocados include costs associated with 

risk mitigation measures. Changes in 

Mexican avocado costs that may result 

because of revised risk mitigation 

measures, such as the increased 

frequency of orchard surveys and the 

larger number of approved ports of 

entry, are assumed to be minor. A fixed 

Mexican avocado price is assumed 

throughout the analysis. 

The analysis is based on a set of 

equations that describe, on the demand 

side, avocado consumption in the 

United States, and on the supply side, 

foreign and domestic avocado 

production for the U.S. market. Demand 

for avocados in the model is based on 

a utility function for a representative 

consumer. On the supply side, the 

model captures the option of producers 

to leave ripe avocados on the tree and 

vary their sale between time periods as 

relative prices change. 

Shift parameters are used in 

specifying the model’s utility function. 

The shift parameters can be thought of 

as reflecting non-price influences on 

demand. As described in the economic 

analysis, even if avocados from the three 

supply regions were equal in price, 

demand for them would not be the same 

because of consumers’ perceptions and 

preferences. A decrease in the shift 

parameter for avocados from any of the 

three supply regions signifies a decrease 

in demand relative to the demand for 

avocados from the other regions, for 

reasons other than a change in price.

Simulation of the changes in Mexican 

avocado import restrictions as set forth 

in the and the no-delay alternative (no 

delay) requires that the model account 

for year-round access to the newly 

approved demand regions. New 

accessibility is represented by changing 

the shift parameters for these regions 

from zero values based on current 

regulatory restrictions, to non-zero 

values based on consumer preference. 

Effects on Supply and Demand 

Expected quantity and price impacts 

of the rule and the no-delay alternative 

are shown in table 1. With the rule, 

avocado consumption is expected to 

increase by 9 percent, from 581 million 

pounds to 634 million pounds. 

Quantities supplied by California and 

Chile will decline by 7.3 percent and 

10.3 percent, respectively, while 

imports from Mexico will increase to 2.6 

times their initial level, from 58 million 

pounds to 154 million pounds. Prices 

for California avocados will fall by 12.3 

percent at the wholesale level (from 

$1.63 to $1.43 per pound) and by 20.6 

percent at the producer level (from 

$1.02 to $0.81 per pound). 

Under the no-delay alternative, 

avocado consumption would increase 

by 13.7 percent, from 581 million 

pounds to 661 million pounds. 

Quantities supplied by California and 

Chile would decline by 12.2 and 16.5 

percent, respectively, while imports 

from Mexico would increase to 209 

million pounds, 3.6 times their initial 

level. California’s prices would fall by 

20.9 percent at the wholesale level (from 

$1.63 to $1.29 per pound) and by 34.3 

percent at the producer level (from 

$1.02 to $0.67 per pound). Thus, all 

impacts would be larger in comparison 

to expected effects with the rule. 

Effects by demand region, supply 

region, and time period are provided by 

the model. Because overall demand for 

avocados from California and Chile will 

decrease in both time periods, 

wholesale and producer prices for 

avocados from California and Chile also 

will decrease in both time periods. With 

the rule, 62 percent of avocado imports 

from Mexico will enter during Period 1. 

Since imports from Mexico during 

Period 1 will comprise a larger share of 

total avocado consumption, they will 

exert greater downward pressure than 

during Period 2 on prices of avocados 

supplied by California and Chile. In 

Region B during Period 1, avocados 

from Mexico will displace 32 percent of 

the avocados that had been supplied by 

California. During Period 2, Mexican 

avocados will displace 19.5 percent and 

20.6 percent of California avocados in 

Regions A and B, respectively.

TABLE 1.—SUMMARY OF NEAR-TERM CHANGES IN ANNUAL QUANTITIES AND PRICES 1

Initial prices 

and quantities With rule 2 With alternative to rule 3

Million pounds 

Quantity: 

Total ...................................................................................................................................... 581.071 633.542 660.868 

Supplied by: 

California ....................................................................................................................... 346.011 320.821 303.866 

Chile .............................................................................................................................. 176.814 158.695 147.695 

Mexico ........................................................................................................................... 58.247 154.026 209.307 

Dollars per pound 

Wholesale price of avocados supplied by: 

California ............................................................................................................................... $1.63 $1.43 $1.29 

Chile ...................................................................................................................................... 1.29 1.20 1.15 

Producer price for: 

California ............................................................................................................................... 1.02 0.81 0.67 

Chile ...................................................................................................................................... 0.59 0.49 0.44 

1Prices weighted by regional and time period quantities. Producer and wholesale prices for avocados from Mexico are assumed constant in 

the model. 2Year-round entry of Hass avocados from Mexico into all States, except California, Florida, and Hawaii. 

3Year-round entry of Hass avocados from Mexico into all States. 

69770 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

Welfare Effects 

Price and quantity changes described 

by the model translate into the welfare 

changes for U.S. avocado consumers 

and producers shown in table 2. A 

portion of consumer gains may be 

captured by retailers exerting market 

power in setting avocado retail prices. 

To the extent that this occurs, overall 

welfare gains are slightly overstated and 

there is a small deadweight loss. 

With the rule, the decrease in 

California avocado prices due to 

producers’ inelastic supply response 

will result in gains in consumer utility 

across all regions and time periods of 

$121.7 million. Not surprisingly, 

consumers in Region A in Period 1 will 

gain the least, since this is the region 

and time period already approved to 

receive avocados from Mexico. 

Consumer gains in Region B will be 

greater than in Region C in both time 

periods, since Mexican avocados will be 

restricted from entering Region C. Under 

the no-delay alternative, consumer gains 

($184.5 million) would be over 50 

percent greater than with the rule, 

illustrating the significance of avocado 

demand in Region C. 

Welfare impacts for avocado 

producers in California and Chile are 

determined by computing changes in 

producer surplus based on their 

avocado factor endowment supply 

curves. A fall in producer prices will 

decrease the amount of factor 

endowment employed in avocado 

production. Given the decline in 

producer prices, California avocado 

producers would experience welfare 

losses equivalent to $71.4 million with 

the rule, and $114.4 million under the 

no-delay alternative. 

The net change in U.S. welfare is 

computed by subtracting losses for 

California producers from consumer 

gains. As shown, the net welfare gains 

would be $50.3 million with the rule 

and $70.1 million under the no-delay 

alternative. Although the no-delay 

alternative is preferable in terms of net 

benefits, the 2-year delay of entry of 

Mexican avocados into California, 

Florida, and Hawaii has been chosen by 

USDA because it will provide an 

opportunity for the efficacy of the rule’s 

risk-mitigating safeguards to be 

demonstrated through year-round 

distribution to the remaining 47 States, 

as Mexican avocados currently are only 

allowed entry during the winter months. 

A sensitivity analysis was conducted 

that considers alternative values for the 

elasticities of substitution and 

transformation and California’s 

aggregate supply elasticity in 

recognition of the uncertainty 

surrounding the values of these 

parameters. Because no information is 

available about their distributions, 

uniform distributions were assumed. 

The results of the sensitivity analysis for 

the welfare effects are given in the 

standard deviation columns in table 2. 

As shown, the standard deviations for 

the changes in consumer welfare are 

small. The standard deviations for the 

changes in producer welfare are larger, 

implying greater variability. This greater 

variability is largely attributable to the 

wide distribution assumed for 

California’s aggregate supply elasticity 

in the sensitivity analysis; there is 

greater uncertainty with respect to the 

supply elasticity as compared to the 

demand-based elasticities of 

substitution. If the change in producer 

surplus for California avocado 

producers is normally distributed, the 

95 percent confidence interval for their 

welfare loss with the rule would be ($45 

million, $102 million), and with the 

alternative to the rule, ($76 million, 

$158 million).

TABLE 2.—NEAR-TERM WELFARE GAINS AND LOSSES 1

[Dollars in millions] 

With rule 2 With alternative to rule 3

Change in 

welfare 

Standard 

deviation 4

Change in 

welfare 

Standard 

deviation 

Losses in producer welfare: 

California ................................................................................................................... ¥$71.37 $14.27 ¥$114.39 $20.48

Chile .......................................................................................................................... ¥15.71 5.29 ¥24.35 5.79

Gains in consumer welfare: 

Period 1: 5

Region A6 .......................................................................................................... 4.02 0.99 7.84 1.18

Region B7 .......................................................................................................... 21.92 2.08 29.66 2.34

Region C 8 ......................................................................................................... 14.17 3.34 27.33 2.48

Period 2: 9

Region A ............................................................................................................ 24.98 2.70 32.42 4.22

Region B ............................................................................................................ 31.76 3.38 41.08 5.29

Region C ........................................................................................................... 24.81 5.29 46.12 6.34

Total ............................................................................................................... 121.66 3.61 184.45 1.93

Net U.S. welfare change 10 .............................................................................................. 50.29 14.27 70.06 20.48

1The difference between baseline values and (i) values with the rule and (ii) values with the alternative to the rule. 

2Year-round entry of Hass avocados from Mexico into all States, except California, Florida, and Hawaii. 

3Year-round entry of Hass avocados from Mexico into all States. 

4Standard deviations of the sensitivity analysis distributions. 

5October 15–April 15. 6The 31 northeastern and central States (and the District of Columbia) currently approved to receive Hass avocado imports from Mexico during the 6-month period, October 15–April 15. (Note: Mexican Hass avocados are allowed to enter Alaska year-round.) 7Fifteen Pacific and southern States, excluding California, Florida, and Hawaii, not currently approved to receive Hass avocados from Mexico. 8 California, Florida, and Hawaii. 

9April 16–October 14. 10The sum of welfare losses for California producers and U.S. consumer welfare gains for all regions and both periods. 

Final Regulatory Flexibility Analysis 

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. U.S. businesses that will 

be directly affected by the rule are Hass 

Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 69771

avocado producers, handlers and 

importers. 

Hass Avocado Producers. An avocado 

farm is considered small if it has annual 

receipts of not more than $750,000. (All 

small-entity definitions in this analysis 

are provided in Title 13 of the Code of 

Federal Regulations, Part 121: Small 

Business Size Regulations.) Based on 

2002 Census of Agriculture data, over 97 

percent of California avocado farms are 

small entities (4687 out of a total of 

4801 farms). We describe the expected 

impact of the rule and the no-delay 

alternative for these small-entity 

producers in terms of decreases in gross 

revenue, as derived from the results of 

the general analysis. The model 

indicates that with the rule there will be 

a 26.7 percent decline in gross revenue, 

assuming the decrease is proportionally 

spread across all farms (table 3). Under 

the no-delay alternative, there would be 

a 42.2 percent decline in gross revenue. 

The gross revenue declines are 

attributable more to decreases in price 

than to decreases in quantity (table 4). 

The status quo alternative would be 

preferable for California’s avocado 

producers, but it would not yield the net 

benefits to the United States shown to 

be gained by expanding U.S. access for 

Mexican avocados. The rule is 

preferable to the no-delay alternative for 

California producers. The analysis 

shows prices for California producers 

falling by 21 cents per pound and 

California avocado production 

decreasing by 25 million pounds under 

the rule, compared to declines of 35 

cents per pound and 42 million pounds 

if there are no delays (table 1). Producer 

surplus losses—declines in revenue 

beyond variable costs—are estimated 

with the rule to be about $71 million, 

compared to losses of about $114 

million without the 2-year delay (table 

2). In all respects, California producers 

will be harmed less when there is a 2-

year delay for California, Florida, and 

Hawaii.

TABLE 3.—ANNUAL IMPACT ON GROSS REVENUE FOR CALIFORNIA HASS AVOCADO PRODUCERS

[Dollars in millions] 

With rule 1 With alternative to rule 2

Initial gross revenue (baseline) ............................................................................................................................... $354.32 $354.32

Gross revenue with the rule or alternative to the rule ............................................................................................ 259.58 204.73

Decrease in gross revenue incurred by large and small Hass avocado producers ............................................... 94.74 149.59

Decrease incurred by small-entity avocado producers 3 ......................................................................................... 59.69 94.24

Decrease as a percentage of initial gross revenue 4 .............................................................................................. 26.7% 42.2%

1Year-round entry of Hass avocados from Mexico into all States, except California, Florida, and Hawaii. 

2Year-round entry of Hass avocados from Mexico into all States. 

3 Decreases in gross revenue are multiplied by 63 percent, the percentage of the total value produced by farms with less than 100 acres harvested. Hass avocado production is assumed to be proportionally distributed among farms of all sizes. 4The decrease in gross revenue is assumed to be proportionally spread across all producers. 

TABLE 4.—PERCENTAGE CHANGES IN CALIFORNIA AVOCADO PRODUCER PRICES AND IN QUANTITIES OF AVOCADOS

SUPPLIED BY CALIFORNIA

With rule 1 With alternative to rule 2

Price Quantity Price Quantity 

Period 1 3 ......................................................................................................................... ¥20.0% ¥6.8% ¥37.3% ¥14.0%

Period 2 4 ......................................................................................................................... ¥21.3% ¥16.0% ¥33.2% ¥19.4%

1Year-round entry of Hass avocados from Mexico into all States, except California, Florida, and Hawaii. 

2Year-round entry of Hass avocados from Mexico into all States. 

3October 15–April 15. 4April 16–October 14. 

The past decade has seen a decrease 

in the number of small-entity California 

avocado producers and in the number of 

acres harvested. Revenue declines 

because of the rule are expected to be 

large compared to losses that smallentity producers may have experienced 

because of the industry’s contraction 

and growing concentration. California 

producers will be harmed by the rule, 

but we cannot predict that a certain 

number of firms may fail. Each avocado 

farm draws upon a unique set of human 

and capital resources and marketing 

arrangements that define its financial 

position and prospects. Firm survival 

will depend on these specific 

conditions, but in general those smallentity producers with recent histories of 

small or negative profit margins will be 

most at risk. 

Handlers. California Hass avocado 

handlers (firms engaged in post-harvest 

activities) will be directly affected by 

the rule. Companies handling avocados 

are considered small businesses if their 

annual receipts are not more than $5 

million. By this definition, 40 out of 51 

firms that will be affected by the rule, 

are small entities. 

The decrease in producers’ revenues 

will mean a decrease in receipts by 

small-entity handlers as well. Negative 

impacts may be at least partially 

alleviated by additional avocado 

business activities in Mexico in which 

U.S. handlers may be involved, but it is 

unlikely that the smaller firms will have 

this opportunity. Decreased receipts 

from reduced avocado sales may also be 

moderated if the firms are engaged in 

handling produce other than avocados. 

Like California producers, affected 

handlers will benefit from the 2-year 

delay. 

Importers. Firms that import avocados 

are defined as small entities if they have 

100 or fewer employees. The annual 

wholesale value of Hass avocados 

imported by 52 of the 85 firms expected 

to be affected by the rule is less than $1 

million. We believe these firms are 

likely to employ fewer than 100 

employees, and therefore can be 

considered will be small entities. As a 

group, these firms will benefit from the 

increase in imports of Hass avocados 

from Mexico (an increase of nearly 96 

million pounds with the rule), but gains 

69772 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

will be tempered by reduced imports 

from Chile (a reduction of about 18 

million pounds). 

For small-entity Hass avocado 

importers, the no-delay alternative 

would be preferable, since it would 

mean a larger increase in imports 

(taking into account reduced quantities 

from Chile): 122 million pounds 

compared to 78 million pounds with the 

rule. In either case, importers will 

benefit compared to leaving the 

regulations unchanged. 

Longer-Term Effects 

This analysis describes near-term 

impacts of two alternatives to current 

regulations restricting the importation of 

avocados from Mexico: The rule, which 

will allow the avocados to enter all 

States year-round except California, 

Florida, and Hawaii, for which entry 

would be delayed two years; and an 

alternative to the rule, which would 

allow importation into all States yearround with no delay for any States. The 

near term may be thought to represent 

the first year that the rule is in effect. 

We address here the question of how the 

alternatives compare in the longer term. 

A static, partial equilibrium model is 

used to depict expected effects of the 

regulatory change. An initial market 

equilibrium for avocados was 

determined based on baseline quantities 

and prices. Regulatory expansion of 

access of Mexican avocados into the 

U.S. market can be thought of as an 

exogenous shock. The resulting increase 

in avocado imports from Mexico will 

lead, in general, to a decline in the 

prices and quantities of avocados 

supplied by California and Chile. A new 

partial equilibrium is attained through 

regional price and quantity changes, 

given the parameters of the model. 

Whether the effects described in the 

analysis would be fully realized in the 

first year of the rule is not known. While 

the sale of Mexican avocados yearround and the addition of 15 States with 

the rule (or 18 States under the 

alternative) will have immediate effects, 

impacts in the first 12 months may or 

may not match those described by the 

model. Changes in buyers’ perceptions 

and preferences—the non-price 

influences represented by the model’s 

shift parameters—will occur over a 

period of time. The model does not 

inform as to how long this transition 

will take. 

If we assume that the effects described 

in this analysis do occur in the first 

year, and we assume that the changed 

supply and demand conditions continue 

into the second year, then by the end of 

the second year the effects would be 

twice those reported in the analysis. 

When compared to the baseline, the net 

welfare gain attributable to the rule 

would be about $50 million in Year 2, 

the same as in Year 1, for an 

undiscounted net gain of about $100 

million over the two years. (The 

preferred comparison would be one of 

conditions with and without the rule in 

Year 2, but the model describes neither 

of these situations.) 

More realistically, by the second year 

there will be production and marketing 

responses by California producers to the 

substantial increase in avocado imports 

from Mexico. Altered regional 

marketing strategies and industry 

promotional activities, for instance, may 

influence the effects for California 

producers from Year 1 to Year 2 of the 

rule (or of the alternative). We do not 

believe that the new equilibrium 

described by the model, assumed to be 

attained in Year 1, will remain 

unchanged in Year 2. 

In Year 3 and afterwards, as long as 

there are not any pest discoveries that 

prevent expansion of Mexican avocado 

imports into California, Florida, and 

Hawaii, the rule and the alternative are 

the same. Changes in Year 3 of the rule 

can be expected to be broadly similar to 

differences in impact between the rule 

and the alternative described by the 

model for Year 1. There will be a further 

decrease in producer welfare and 

increase in consumer welfare, with the 

latter outweighing the former for an 

overall net increase in U.S. welfare. 

We would not expect the changes in 

Year 3 to be equal to the differences in 

impact between the rule and the 

alternative described for Year 1. 

Inclusion of California, Florida, and 

Hawaii will take place two years after 

the year-round and 15-State expansions 

have occurred. Two years of Mexican 

avocado imports into southern and 

western States may result in regional 

prices and quantities different from 

those portrayed by the model. The Year 

1 difference between the rule and the 

alternative in net welfare gains is 

estimated to be about $20 million, but 

the undiscounted net welfare gain in 

Year 3 of the rule will probably have a 

different value. 

The analysis shows near-term impacts 

of the rule and the alternative. The 

period is assumed to represent the first 

year that the rule is in effect. Differences 

in impact between the rule and the 

alternative will continue during Year 2, 

but are unlikely to be the same as 

modeled for the first year. The thirdyear adjustment, when the rule will 

allow Mexican avocado imports into all 

States, will remove all distinctions 

between the rule and the alternative. 

Effects in Year 3 will be like those 

indicated by the Year 1 differences in 

impact between the rule and the 

alternative, but the quantity, price, and 

welfare changes are likely to differ from 

those described by the model for Year 

1. 

This rule contains no new 

information collection requirements. 

(See ‘‘Paperwork Reduction Act’’

below.) 

Small Business Regulatory Enforcement 

Fairness Act of 1996

This rule has been designated by the 

Administrator, Office of Information 

and Regulatory Affairs, Office of 

Management and Budget, as a major rule 

under the Small Business Regulatory 

Enforcement Fairness Act of 1996 (5 

U.S.C. 801–808). Accordingly, the 

effective date of this rule has been 

delayed the required 60 days pending 

congressional review. 

Executive Order 12988 

This final rule allows Hass variety 

avocados to be imported into the United 

States from Mexico. State and local laws 

and regulations regarding Hass variety 

avocados imported under this rule will 

be preempted while the fruit is in 

foreign commerce. Fresh fruits and 

vegetables are generally imported for 

immediate distribution and sale to the 

consuming public, and remain in 

foreign commerce until sold to the 

ultimate consumer. The question of 

when foreign commerce ceases in other 

cases must be addressed on a case-bycase basis. No retroactive effect will be 

given to this rule, and this rule will not 

require administrative proceedings 

before parties may file suit in court 

challenging this rule. 

National Environmental Policy Act 

An environmental assessment and 

finding of no significant impact have 

been prepared for this final rule. The 

assessment provides a basis for the 

conclusion that the potential 

environmental impacts associated with 

the importation of Hass avocados from 

Mexico under the conditions specified 

in this rule will not present a risk of 

introducing or disseminating plant pests 

and will not have a significant impact 

on the quality of the human 

environment. Based on the finding of no 

significant impact, the Administrator of 

the Animal and Plant Health Inspection 

Service has determined that an 

environmental impact statement need 

not be prepared. 

The environmental assessment and 

finding of no significant impact were 

prepared in accordance with: (1) The 

National Environmental Policy Act of 

1969 (NEPA), as amended (42 U.S.C. 

Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 69773

4321 et seq.), (2) regulations of the 

Council on Environmental Quality for 

implementing the procedural provisions 

of NEPA (40 CFR parts 1500–1508), (3) 

USDA regulations implementing NEPA 

(7 CFR part 1b), and (4) APHIS’ NEPA 

Implementing Procedures (7 CFR part 

372). 

The environmental assessment and 

finding of no significant impact are 

available for viewing on the Internet at 

www.aphis.usda.gov/ppq/avocados/. 

Copies of the environmental assessment 

and finding of no significant impact are 

also available for public inspection at 

USDA, room 1141, South Building, 14th 

Street and Independence Avenue, SW., 

Washington, DC, between 8 a.m. and 

4:30 p.m., Monday through Friday, 

except holidays. Persons wishing to 

inspect copies are requested to call 

ahead on (202) 690–2817 to facilitate 

entry into the reading room. In addition, 

copies may be obtained by writing to the 

individual listed under FOR FURTHER

INFORMATION CONTACT. 

Paperwork Reduction Act 

This final rule contains no new 

information collection or recordkeeping 

requirements under the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501 

et seq.).

List of Subjects in 7 CFR Part 319 

Coffee, Cotton, Fruits, Honey, 

Imports, Logs, Nursery stock, Plant 

diseases and pests, Quarantine, 

Reporting and recordkeeping 

requirements, Rice, Vegetables.

■ Accordingly, we are amending 7 CFR 

part 319 as follows:

PART 319—FOREIGN QUARANTINE 

NOTICES

■ 1. The authority citation for part 319 

continues to read as follows:

Authority: 7 U.S.C. 450 and 7701–7772; 21 

U.S.C. 136 and 136a; 7 CFR 2.22, 2.80, and 

371.3.

§ 319.56–2bb [Removed and Reserved]

■ 2. Section § 319.56–2bb is removed 

and reserved.

■ 3. Section 319.56–2ff is amended as 

follows:

■ a. By revising the section heading and 

the introductory text of the section to 

read as set forth below.

■ b. By revising the introductory text of 

paragraph (c) and paragraphs (c)(1)(i) 

and (c)(1)(ii) to read as set forth below.

■ c. By revising the introductory text of 

paragraph (c)(2) and paragraphs (c)(2)(i) 

and (c)(2)(v) to read as set forth below.

■ d. By revising the introductory text of 

paragraph (c)(3) and paragraphs (c)(3)(i), 

(c)(3)(iv), (c)(3)(vi), and (c)(3)(vii) to read 

as set forth below.

■ e. By revising paragraphs (d), (e), and 

(f) to read as set forth below.

■ f. By removing paragraphs (g), (h), and 

(k) and redesignating paragraphs (i) and 

(j) as paragraphs (g) and (h), respectively.

■ g. By revising newly redesignated 

paragraph (g) to read as set forth below.

§ 319.56–2ff Administrative instructions 

governing movement of Hass avocados 

from Michoacan, Mexico.

Fresh Hass variety avocados (Persea 

americana) may be imported from 

Michoacan, Mexico, into the United 

States only under a permit issued in 

accordance with § 319.56–3, and only 

under the following conditions: 

(a) * * * 

(2) Between January 31, 2005 and 

January 31, 2007, the avocados may be 

imported into and distributed in all 

States except California, Florida, and 

Hawaii. After January 31, 2007, the 

avocados may be imported into and 

distributed in all States.

* * * * *

(c) Safeguards in Mexico. The 

avocados must have been grown in the 

Mexican State of Michoacan in an 

orchard located in a municipality that 

meets the requirements of paragraph 

(c)(1) of this section. The orchard in 

which the avocados are grown must 

meet the requirements of paragraph 

(c)(2) of this section. The avocados must 

be packed for export to the United 

States in a packinghouse that meets the 

requirements of paragraph (c)(3) of this 

section. The Mexican national plant 

protection organization (NPPO) must 

provide an annual work plan to APHIS 

that details the activities that the 

Mexican NPPO will, subject to APHIS’

approval of the work plan, carry out to 

meet the requirements of this section; 

APHIS will be directly involved with 

the Mexican NPPO in the monitoring 

and supervision of those activities. The 

personnel conducting the trapping and 

pest surveys must be hired, trained, and 

supervised by the Mexican NPPO or by 

the Michoacan State delegate of the 

Mexican NPPO. 

(1) Municipality requirements. (i) The 

municipality must be listed as an 

approved municipality in the bilateral 

work plan provided to APHIS by the 

Mexican NPPO. 

(ii) The municipality must be 

surveyed at least semiannually (once 

during the wet season and once during 

the dry season) and found to be free 

from the large avocado seed weevil 

Heilipus lauri, the avocado seed moth 

Stenoma catenifer, and the small 

avocado seed weevils Conotrachelus 

aguacatae and C. perseae.

* * * * *

(2) Orchard and grower requirements.

The orchard and the grower must be 

registered with the Mexican NPPO’s 

avocado export program and must be 

listed as an approved orchard or an 

approved grower in the annual work 

plan provided to APHIS by the Mexican 

NPPO. The operations of the orchard 

must meet the following conditions: 

(i) The orchard and all contiguous 

orchards and properties must be 

surveyed semiannually and found to be 

free from the avocado stem weevil 

Copturus aguacatae.

* * * * *

(v) Harvested avocados must be 

placed in field boxes or containers of 

field boxes that are marked to show the 

official registration number of the 

orchard. The avocados must be moved 

from the orchard to the packinghouse 

within 3 hours of harvest or they must 

be protected from fruit fly infestation 

until moved.

* * * * *

(3) Packinghouse requirements. The 

packinghouse must be registered with 

the Mexican NPPO’s avocado export 

program and must be listed as an 

approved packinghouse in the annual 

work plan provided to APHIS by the 

Mexican NPPO. The operations of the 

packinghouse must meet the following 

conditions: 

(i) During the time the packinghouse 

is used to prepare avocados for export 

to the United States, the packinghouse 

may accept fruit only from orchards 

certified by the Mexican NPPO for 

participation in the avocado export 

program.

* * * * *

(iv) Prior to the culling process, a 

biometric sample, at a rate determined 

by APHIS, of avocados per consignment 

must be selected, cut, and inspected by 

the Mexican NPPO and found free from 

pests.

* * * * *

(vi) Prior to being packed in boxes, 

each avocado fruit must be cleaned of 

all stems, leaves, and other portions of 

plants and labeled with a sticker that 

bears the official registration number of 

the packinghouse. 

(vii) The avocados must be packed in 

clean, new boxes, or clean plastic 

reusable crates. The boxes or crates 

must be clearly marked with the 

identity of the grower, packinghouse, 

and exporter. Additionally, between 

January 31, 2005 and January 31, 2007, 

the boxes or crates must be clearly 

marked with the statement ‘‘Not for 

69774 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

importation or distribution in CA, FL, 

and HI.’’

* * * * *

(d) Certification. All consignments of 

avocados must be accompanied by a 

phytosanitary certificate issued by the 

Mexican NPPO with an additional 

declaration certifying that the 

conditions specified in this section have 

been met. 

(e) Pest detection. (1) If any of the 

avocado seed pests Heilipus lauri, 

Conotrachelus aguacatae, C. perseae, or 

Stenoma catenifer are discovered in a 

municipality during the semiannual 

pest surveys, orchard surveys, 

packinghouse inspections, or other 

monitoring or inspection activity in the 

municipality, the Mexican NPPO must 

immediately initiate an investigation 

and take measures to isolate and 

eradicate the pests. The Mexican NPPO 

must also provide APHIS with 

information regarding the circumstances 

of the infestation and the pest risk 

mitigation measures taken. The 

municipality in which the pests are 

discovered will lose its pest-free 

certification and avocado exports from 

that municipality will be suspended 

until APHIS and the Mexican NPPO 

agree that the pest eradication measures 

taken have been effective and that the 

pest risk within that municipality has 

been eliminated. 

(2) If the Mexican NPPO discovers the 

stem weevil Copturus aguacatae in an 

orchard during an orchard survey or 

other monitoring or inspection activity 

in the orchard, the Mexican NPPO must 

provide APHIS with information 

regarding the circumstances of the 

infestation and the pest risk mitigation 

measures taken. The orchard in which 

the pest was found will lose its export 

certification immediately and avocado 

exports from that orchard will be 

suspended until APHIS and the 

Mexican NPPO agree that the pest 

eradication measures taken have been 

effective and that the pest risk within 

that orchard has been eliminated. 

(3) If the Mexican NPPO discovers the 

stem weevil Copturus aguacatae in fruit 

at a packinghouse, the Mexican NPPO 

must investigate the origin of the 

infested fruit and provide APHIS with 

information regarding the circumstances 

of the infestation and the pest risk 

mitigation measures taken. The orchard 

where the infested fruit originated will 

lose its export certification immediately 

and avocado exports from that orchard 

will be suspended until APHIS and the 

Mexican NPPO agree that the pest 

eradication measures taken have been 

effective and that the pest risk within 

that orchard has been eliminated. 

(f) Ports. The avocados may enter the 

United States only through a port of 

entry located in a State where the 

distribution of the fruit is authorized 

pursuant to paragraph (a)(2) of this 

section. 

(g) Inspection. The avocados are 

subject to inspection by an inspector at 

the port of first arrival. At the port of 

first arrival, an inspector will sample 

and cut avocados from each 

consignment to detect pest infestation.

* * * * *

Done in Washington, DC, this 23rd day of 

November 2004. 

Charles D. Lambert, 

Acting Under Secretary for Marketing and 

Regulatory Programs.

[FR Doc. 04–26336 Filed 11–29–04; 8:45 am] 

BILLING CODE 3410–34–P