### United States

Department of Agriculture Animal and Plant Health Inspection Service January 2012 **Analysis in Support of Certification that the** 

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

Policy & Program Development Policy Analysis & Development0

**Summary** APHI S proposes to allow imports from Malaysia of fresh pineapple, jackfruit and starfruit with stems into the continental United States under certain phy tosanitary conditions
. This action is undertaken in response to a request from the government of Malaysia. D ata on U.S. production and trade of jackfruit or starfruit are not available
. The latest available data on U.S. f resh pineapple production is for 2006 , when 99, 000 metric tons were sold by Hawaii an producers
. By

comparison, f

resh pineapple imports by the United States doubled b etween 2002 and 2010, from 406,000 to 8 09,000 metric tons , with Costa Rica the principal source . Malaysian producers expect to export to the United States about 2,500 metric tons of fresh pineapple (equivalent to 0.3 percent of U.S. imports in 2010), 1,500 metric tons of fresh jackfruit, and 3,000 metric tons of fresh starfruit. Importers and wholesalers that may be affected by the proposed rule are predominantly small entities. Small
- scale Hawaiian producers of fresh pineapple, jackfruit, and starfruit mainly market to consumers within that State and are not expected to be significantly affected by

the importation of these fruits into the continental United States. Under these circumstances, the APHIS Administrator has determined that this action, if promulgated, will not have a significant economic impact on a substantial number of small entities.1



### Introduction The government of Malaysia has requested that APHI S allow the importation of fresh pineapple (

Ananas comosus (L

) ), jackfruit (

Artocarpus heterophylis Lam .), and starfruit ( Averrhoa carambolia ) with stems into the continental United States
. Producers in Malaysia would comply

with APHIS
- approved phytosanitary measures, including irradiation and treatment of the fruit with high
-pressure water spray or co mpressed air, application of broad spectrum fungicide treatments, and visual inspection and certification
. P ineapple, jackfruit , and starfruit are tropical or semitropical fruits that are not grown in the continental United States except in greenhouses
. Virtually the entire U.S. pineapple crop is grown in Hawaii
. In2006, the mo st recent reported ye ar , there were 30 Hawaiian farms with a total of 13,900 acres that produced 188,000 tons of pineapples with an estimated value of $7 5.5 million (table 1)
. Production for the fresh pineapple market totaled 99,000 tons. Inthe last 15 ye ars , s everal pineapple companies in Hawaii have closed down due to rising production costs and steep competition from Hawaii
-based corporations with production operations in low
- cost countries
. However, small , independent Hawaiian pineapple growers on the islands of Maui and Hawaii continue to have limited sales to local fresh fruit markets
. **Table 1**  **Pineapples: Number of farm s, acreage, production, disposition,**  **and value, State**  **of Hawaii, 2002 -** **2006** Year Farms Acreage

used for crop Production

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

(in tons) 2002 25 19 , 1 00 320 ,000 203 ,000 117 ,000 $100,616,000 2003 25 16 ,000 300 ,000 170 ,000 130 ,000 $101,470,000 2004 30 13 ,000 220 ,000 116 ,000 104 ,000 $83,104,000 2005 30 14 ,000 212 ,000 106 ,000 106 ,000 $79,288,000 2006 30 13 ,900 188 ,000 89 ,000 99 ,000 $75,542,000 Source: NASS, Dept of Ag State of Hawaii, Ag Development Division, Pineapples: Annual Summary, Several Issues
. Note: 2006 wa s the last year pineapple production statistics were gathered
.2

In formation specific to the production of starfruit and jackfruit is not available (although production data for st arfruit was separately reported for two years, 2002 and 2003, as shown in table 2) . Rather, onl y aggregated data is available for “o ther minor tropical specialty fruits.” 1 **Table 2**  **Startfruit: Number of farms, acreage, production, price**  **, value, State of Ha waii, 2002**  **- 200**  **3** Year Farms Acreage Number of trees Utilized Production Farm Price Value of Sales Total Bearing 2002 50 25 2,100 1,800 63,000 $1.51 / lb $ 95,000 2003 50 30 2,700 800 24,000 $1.58/ lb $ 38,000 Source: NASS, Dept of Ag State of Hawaii, Ag Development Division, Tropical Specialty Fruits : Annual Summary, 2010. According to Hawaii’s Agricultural Statistics Service , b etween 1 991 and 2008, acreage devoted to “ other minor tropical specialty fruits ” as a whole increased from 200 acres to 1,480
acres . In 2008, Hawaii an growers of “minor tropical specialty fruits ” produced and sold an estimated 2.1 million pounds of fresh fruit valued at $ 4 million
. As shown in table 3, the United States is a net importer of fresh pineapples, 98 percent of which are imported from Central American countries and Mexico. Costa Rica alone supplies 84 percent of U.S. pineapple imports (fresh or dried). The government of Malaysia propose s to export to the continental United States an annual volume of 2,500 metric tons of pineapples
. This amount is equivalent to 0.4 percent of average U.S. imports, 2002
- 2010. Table 3. **U.S. Trade of fresh pineapples (HS -**  **7: 0**  **8043) average**  **( 2002**  **- 2010**  **)** *****

Average Annual Value of U.S. T rade of P ineapples , 2002
- 2010 Average Annual Volume of U.S. T rade of P ineapples , 2002
- 2010 Estimated Malaysian Exports of P ineapples to the Continental United States US Imports $334,326 ,000 617 ,000 metric tons 2 , 500 metric tons (0.4 percent of US imports) US Exports $12,442 ,000 13 ,000 metric tons Net Imports $321,884 ,000 604 ,000 metric tons Source: U.S. Census Bureau, as reported by Global Trade Information Services
. * Note: See Appendix for details.

1 The tropical specialty fruits include abiu, atemoya, caimito, cherimoya, durian, langsat, longan, loquat, lychee, mango, mangosteen, persimmon, ram butan, sapodilla, soursop, starfruit, white sapote, breadfruit, canistel, jaboticaba, jackfruit, poha, rollina, and others.3

Malaysia has also proposed to export to the continental United States 1,500 metric tons of jackf ruit and 3,000 metric tons of starfruit, for neither of which information on U.S. imports is available for comparison. 

### Potential **Impact on Small Entities** As described above, the proposed rule would not have a significant impact on U.S. fresh pineapple prod

ucers , given the low level of domestic production compared to the volume imported from other countries. While there are no data on U.S. jackfruit or starfruit production, imports of these tropical fruits likely similarly dwarf domestic (Hawaiian) producti on. Entities most likely

to be directly affected b y the proposed rule are importers and wholesale merchants of fresh fruits and vegetables (NAICS 424480) who trade in the se three tropical fruits. The Small Business Administration ( SBA) has established guidelines for determining which establishments are to be considered small. Imports/export merchants, agents and brokers are identified within the broader wholesaling trade sector. A firm primarily engaged in wholesaling fresh fruits and vegetables is cons idered small if it employs not more than 100 persons . 2 **Table 4**  **. Fresh**  **f**

**ruit & v** **egetable w**  **holesale m**  **erchants (NAICS 424480)**  **that may be affected by the rule, 2007** Number of Establishments Number of

Establishments that operated the entire year Number of Establishments with fewer than 100 employees that operated the entire year Small
- entity Establishments as a percentage of those that operated the entire year 5,074 4,437 4207 94.8% Source: 2007 Economic Census. Sector 42: Wholesale Trade: Subject Series
- E stab lishment & Firm Size: Summary Statistics by Employment size of establishments for the United States
. In 2007, nearl y 95 percent (4,207 of 4,437) of fruit and vegetable wholesale establishments that operated the entire ye ar were small by the SBA standard (table 4)
. There are not official data on the number of wholesale merchants by fresh fruit or vegetable. Thus , we do

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

– Merchant Wholesalers, Nondurable Goods; pp. 15:16 of 39
- )4

not know the number of establishments that import fresh jackfruit, pineapple , or starfruit
. Commercial consignments of fresh starfruit and jackfruit are not recorded by the U.S. Department of Commerce
. Based on the number of fruit and vegetable wholesale establishments that are considered small entities, it is reasonable to assume entities affected b y the proposed rule would be small, although e ffects would not be significant. S mall
- scale Hawaiian producers of fresh pineapple, jackfruit, and starfruit mainly market to consumers within that State and are not expected to be significantl y affected b y the importation of these fruits into the continental United States. Under these circumstances, the APHI S Administrator has determined that this action, if promulgated, will not have a significant economic impact on a substantial number of small entities.5 **Appendix** Appendix Table 1 . Value of U.S. trade of fresh pineapples in 1,000 dollars

2002 2003 2004 2005 2006 2007 2008 2009 2010 U
. S
. Imports $ 188,168 $ 225,670 $ 231,120 $ 264,085 $ 440,215 $ 230,318 $ 458,344 $ 466,567 $ 504,447 U
. S
. Exports $ 8,662 $ 9,878 $ 14,705 $ 16,053 $ 16,544 $ 10,181 $ 13,475 $ 11,992 $ 10,486 Net Imports $ 179,506 $ 215,792 $ 216,415 $ 248,032 $ 423,671 $ 220,137 $ 444,869 $ 454,575 $ 493,961 Source: U.S. Census Bureau, as reported by Global Trade Information Services, Inc. A ppendix Table 2 . Volume of U.S. trade of fresh pineapples in 1,000 metric tons

2002 2003 2004 2005 2006 2007 2008 2009 2010 U
. S
. Imports 40 6 47 7 511 57 8 634 69 7 71 4 720 81 6 U
. S
. Exports 1 3 12 1 6 15 1 6 9 1 2 1 1 8 Net Imports 393 465 495 5 63 618 688 702 709 808 Source: U.S. Census Bureau, as reported by Global Trade Information Services, Inc.