### United States

Department of Agriculture Anim al and Plant Health Inspection Service Novem ber 2013 **Analysis in Support of Certification that the** 

**Rule will not have a Significant Economic Impact on a Substantial Number of Small**  **Entities**
**Final Rule**  **APHIS -**  **2012 -**  **0014 RIN 0579**  **- AD68**  **Importation of Papaya ( Carica papaya**  **L.) cultivar Solo from Peru into the Continental**  **United States (7 CFR 319.56 -**  **25)**

Policy & Program Development Policy Analysis & Developmenti



### Summary Th is final rule w ill allow the importation of fresh papaya fruit from Peru into the continental United States. P apaya is a relativel y minor crop in the United States that is primarily grown in Hawaii , and to a lesser extent, in Florida. Very small acrea ges of papaya are found in Texas and California
. P eru is expected to ship up to 36 metric tons of fresh papaya to the United States per ye ar . This amount will be equivalent to less than 0.03 percent of net imports of fresh papay a by the United States in 2 01 2 . With U.S. net imports estimated to be at least eight times as large as U.S. fres h papaya production, any market effects of such a relativel y negligible change in papaya imports are as likel y to impact foreign suppliers as they are U.S. producers. In addition, effects for the majorit y of U.S. papay a producers, who are located in Hawaii, w ill be further muted by the prohibition on entry

of fresh papay a from Peru into that State. While most if not all U.S. papaya farms are small enti ties, we expect this final rule to have a very

minor impact regardless of the size of operation . T he APHI S Administrator has determined that this action w ill not have a significant economic impact on a substantial number of small entities.ii



### Table of Conte **nts** Summary
................................ ................................ ................................ .............................. i Introduction
................................ ................................ ................................ ......................... 1 U.S. Papay a Production and Trade
................................ ................................ ..................... 1 Potential Impact on Small Entities
................................ ................................ ...................... 4 References
................................ ................................ ................................ ........................... 81



### Introduction This analy sis provides the basis, as required by the Regulatory

Flexibility

Act, for certification by

the APHIS Administrator that the final rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. APHI S received a request from the Government of Peru to allow the importation of fresh papaya from Peru into the United States. The final rule w ill allow importation of commercial shipments of fresh papaya into the continental United States that is produced und er a s ys tems approach to mitigate the risks posed by certain plant pests. Papaya is native to tropical areas of South America, such as in Brazil and Peru. In the United States, papaya is primarily cultivated in Hawaii, which has a similar tropical climate , and to a lesser extent in Florida
. Nominal areas of cultivation are also found in Texas and California. The popularit y of papaya has been steadily increasing , with the United States a leading importer of the fruit. Papaya’s health benefits inc lude v itamins B and C , and it is a source of dietary fiber ( California Rare Fruit Growers, Inc., 1997 )
. 

### U.S. **Papaya Production and Trade**  Quantities of papaya produced in Hawaii in rece nt y ears are shown in table 1. There has been a significant decline in production, from about 2 3,608 metric tons (MT) in 200 1 , to about 1 2,595 MT in 201 1 . In 20 11 , papaya was grown in Hawaii on 172 farms
. 1 Florida, with 68 papaya farms in 2007 , is estimated to produce about 2, 8 00 MT of papaya annually
. 2 As in Hawaii, there has been a decline in production, with the area planted in papaya estimated to have

1 2007 Census of Agriculture , Table 32
. 2007 State Data: Fruit and Nuts http://www.agcensus.usda.gov/Publications/2007/Full_Report/usv1.pdf and USDA, NASS, Haw aii Field Office, 2011 Hawaii Papaya Utilization, Hawaii F arm Facts,July 2012 2 Based on yield, pack

- out percentage, and acreage estimates in Mossler, M., & Crane, J. (1999). Florida crop/pest management profile: Papaya. ; http://edis.ifas.ufl.edu/pi0532

fallen from about 400 acres to about 300 acres, due largel y to urban encroachment and d estruction by hurricanes. 3 The 2007 Census of Agriculture report ed that there were two papaya farms in Texas and one papaya farm in California that y ear . 4 Table 1. Hawaii ’s fresh papaya production, 200 1
- 201 1 , metric tons Year Number of farms Production Value of Sales 2001 221 23,608 $14,598,000 2002 164 19,38 6 $11,924,000 2003 163 18,523 $13,069,000 2004 207 15,481 $12,361,000 2005 207 13,93 8 $11,241,000 2006 170 12,076 $11,049,000 2007 178 14,16 5 $13,094,000 2008 177 14,301 $14,393,000 2009 177 13,756 $14,186,000 2010 173 13,256 $11,123,000 2011 172 12,595 $ 9,722,000 Source: USDA, NASS, Noncitrus Fruits and Nuts Summary, various issues, as reported by the Economic Research Service, http://www.ers.usda.gov/Publications/FTS/Yearbook0713/FTS2009.pdf
. And, USDA, NASS, Hawaii, “Hawaii Farm Facts, July 2013. Table 2 shows the total quantity of fresh papaya imported by the United States , 200 8
- 201 2 , and the quantities imported from the six principal supplying countries
. Over the five

- ye ar span, the average amount of papaya imported was about 14 3 , 320 MT
. Mexico is the major source, and provided 7 6 percent of imports in 201 2
. Table 2 . U.S. fresh papaya imports, 200 8
- 20 1 2 , metric tons

3 Ibid. 4 2007 Census of Agriculture , Table 32
. 2007 State Data: Fruit and Nuts http://www.agcensus.usda.gov/Publications/2007/Full_Report/usv1.pdf Source Quantity Percent Share 201 2 200 8 200 9 20 10 201 1 2012 World 124,355 156,394 153,891 139,766 142,199 100.0 Mexico 84,901 12,4741 115,214 100,875 107,342 7 6 Belize 28,170 23,747 28,568 26,372 18,517 1 3 Guatemala 3,721 2,11 3,882 6,183 11,221 4 Brazil 3,793 2,923 2,984 3,582 2,339 < 8 Dominican Republic 2,142 1,791 2,228 2,165 1,995 1 Jamaica 1,096 785 755 547 776 < 13

Source: U.S. Census Bureau, as reported in the Global Trade Atlas. Table 3 shows the value of U.S. papaya imports, 200 8
- 201 2
. The average value of papaya imports over the five y ears was approximately $ 80 million, with the major share earned on fruit imported from Mexico
. Table 3
. Value of U.S. fresh papaya imports, 200 8
- 201 2 , million dollars

Source: U.S. Census Bureau, as reported in the Global Trade Atlas. Table 4 shows the quantity of U.S. fresh papaya exported , 200 8
- 201 2
. Over the five

- year span, the average amount of papaya exported was about 3, 726 MT
. The United States exports most of this fruit to Canada

– 7 5 percent of exports in 2011
. In2011, U.S. imports of fresh papaya exceeded U.S. exports by approximately 13 7 , 743 MT
.
Table 4 . Quantit y of U.S. fresh papaya exports , 200 8
- 20 1 2 , metric tons

Source: U.S. Census Bureau, as reported in the Global Trade Atlas.

S ource Value

200 8 200 9 20 10 201 1 201 2 Percent Share 201 2 World 72.33 87.22 87.03 68.36 85.79 100.00 Mexico 50.20 69.13 65.95 44.83 62.63 73 Belize 11.66 10.68 11.98 11.72 9.28 1 1 Brazil 4.99 3.82 4.33 4.53 3.23 4 Guatemala 1.18 0.68 1.94 3.93 7.20 8 Dominican Republic 1.00 0.90 1.13 1.71 1.23 1 Jamaica 2.18 1.58 1.43 1.62 2.22 3

Source Quantity Percent Share 201 1 200 8 200 9 20 10 201 1 2012 World 3,474 3,399 3,2 82 4,019 4,456 100.0 Canada 2,428 2,609 2,327 2,9 58 3,344 75 Japan 773 438 395 386 380 9 Hong Kong 4 85 178 288 333 7 China 139 181 8 9 238 285 6 Mexico

- 19 255 92 55 1 German y 69 53 23 26 17 < 14

Table 5 shows the value of U.S. papaya exports, 200 8
- 201 2
. The average value of papaya exports over the five y ears was approximately $ 9 .2 million, with the majority of this amount from fruit exported to Canada
. Table 5
. Value of U.S. fresh papaya exports, 200 8
- 201 2 , million dollars

Source: U.S. Census Bureau, as reported in the Global Trade Atlas.


### Potential Impact on Small Entities Farms producing papaya are classified within the North American Industry Classification Sy stem under Other Noncitrus Fruit Farming (NAICS 111 339). For this industry classification,
a business is considered to be a small entity if its annual receipts are not more than $750,000. 5 The average 2007 market value of crops sold by farms classified within Fruit and Tree Nut Farming (which includes Other Noncitrus Fruit Farming) was less than $188,000. 6 We infer that the majority

of farms producing fresh papay a are small entities. Th e 2007 Census of Agriculture also contains data on certain sub

- categories of fruit and tree nut farming operations , namely , small family farms and farms having operators who belong

5 U.S. Small Business Administration, Table of Small Business Size Standards. http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf 6 2007 C ensus of Agriculture , Table 62
. Selected Characteristics of Farms by North American Industry Classification System: 2007 , http://www.agcensus.usda.gov/Publications/2007/Full_Report/usv1.pdf

S ource Value

2008 2009 2010 2011 2012 Percent Share 201 1 World 8.85 7.87 7.20 10.39 11.78 100.00 Canada 5.58 5.31 4.56 7.06 8.23 70 Japan 2.11 1.19 1.07 1.24 1.23 1 1 Hong Kong 0.03 0.30 0.63 0.94 1.07 9 China 0.67 0.75 0.42 0.79 0.94 8 German y 0.30 0.26 0.14 0.15 0.11 1 Mexico 0.00 0.02 0.34 0.14 0.10 15

to socially

disadvantaged groups. 7 S mall family farm s have gross farm cash income of less than $ 250 ,000
. Categories of socially disadvantaged groups are women , persons of Hispanic origin , American Indian or Alaska Native , Asian , African American , and Native Hawaiian or other Pacific. Table 6 shows the number of small family f arms categorized under fruit and tree nut farming in 2007. We note that residential/lifestyl e farms comprise d nearl y half of small famil y fruit and tree nut farms. For about 30 percent of the small family fruit and tree nut farms, the operators reported that they were retired.
Table 6 . Number and percentage of small famil y farms consisting of fruit and tree nut farming , 2007 Limited

Resource Farm s Retirement

Farm s Residential/

Lifestyle Farm s Farming

Occupation/ Lo wer Sales Farming

Occupation/ Higher Sales Total Number of fruit and tree nut farming farms 10,705 24,019 33,212 11,034 3,527 82,497 Percentage 13 29 40 13 4 100 Source: USDA NASS, 2007 Census of Agriculture. Note: A l imited resource farm is a small family farm that has gross sales of less than $100,000 (indexed after 2003), and a household income less than the poverty level for a family of four with two children or less than half the county median income. A r etirement farm is a small family farm whose operators report they are retired (excludes limited resource farms operated by retired farmers). A r esidential/lifestyle farm is a small family farm whose operators report a major occupation other than farming (excludes limited resource farms whose operators report a major occupation other than farming ). A f arming occupation/lower

- sales farm is a small family farm with sales less than $100,000 w

hose operators report farming as their major occupation (excludes limited resource farms whose operators report farming as their m ajor occupation). A f arming occupation/higher

- sales farm is a small family farm with sales between $100,000 and $249,000 w hose operators report farming as their major occupation. Table 7 shows the number and percentage of fruit and tree nut farms that had operators belonging to sociall y disadvantaged groups in 2007. Nearl y 90 percent of fruit and tree nut

7 For definitions and information, see : USDA ERS. Structure and Finances of U.S. Farms: Family Farm Report, 20 10 edition , EIB

- 66, July 2010

. http://www.ers.usda.gov/Publications/EIB66/EIB66.pdf6

farms had a woman as the principal operator. Significant numbers of these farms also had operators who belong to socially disadvantaged racial or ethnic groups. On approximately 60 percent of the farms, the operator was of Spanish, Hispanic, or Latin origin.
Table 7 . Number and percentage of farms consisting of fruit and tree nut farming for which one or more operators belong to a socially disadvantaged group, 2007

Farm s where the principal operator is female Farm s

where an operator is of Spanish, Hispanic, or Latino origin Farm s where

an operator reports race as American Indian or Alaska Native Farm s

where an operator reports race as Asian Farm s

where an operator reports race as Black or African American Farm s

where an operator reports race as Native Hawaiian or Other Pacific Islander All

Farm s

Number of farms with fruit and tree nut farming 13,876 8,871 1,304 4,163 836 335 15,509 Percentage 89 57 8 27 5 2 100 Source: USDA NASS, 2007 Census of Agriculture. Based on numbers of papaya farms and production levels in the United States , it is evident that papaya is a relatively minor crop in the United States , and it is likely that most if not all U.S. papaya farms are small entities
. But effects of the final rule for these producers will be minor. Peru is expected to annually ship one to two 40
- foot shipping containers of fresh papaya to the United States. Each container can contain approximately 18 MT ( about 40,000 pounds), which means that a maximum amount of approximately 36 MT ( about 80,000 pounds) of papay a will be imported into the continental United States from Peru. This amount will be equivalent to less than 0.03 percent of net imports of fresh papay a by the United States in 2011. Wi th U.S. net imports estimated to be at least eight times as large as U.S. fresh papaya production, any markets effects of such a relatively negligible change in papaya imports are as likely to impact foreign7

suppliers as they

are U.S. producers. In additi on, effects for the majority of U.S. papay a producers, who are located in Hawaii, will be further muted b y the final prohibition on entry of fresh papay a from Peru into that State. We expect the final rule to have a very minor impact on U.S. papaya growers regardless of the size of operation or an operator ’s classification with respect to socially disadvantaged groups . T he Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities.8



### References California Rare Fruit Growers, Inc. (1997). Papaya . Retrieved from http://www.crfg.org/pubs/ff/papay a.html Census of Agriculture, 2007, http://www.agcensus.usda.gov/Publications/2007/Full_Report/index.asp Global Trade Atlas. Retrieved (2011 , April ) , http://www.gtis.com/gta/default.cfm Mossler, M., & Crane, J. (1999). Florida crop/pest management profile: Papaya . Informall y published manuscript, IFAS Extension, University of Florida, Gainesville, Florida. , Available from Electronic Data Information Source (EDIS). (Publication #CIR 1402) http://edis.ifas.ufl.edu/pi053 U.S. Small Business Administration. U.S. Small Business Administration: Table of Small Business Size Standards Match to North American Industry C lassification Sy stem http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf