### United States

Department of Agriculture Anim al and Plant Health Inspection Service April 2014 **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 2013 -**  **0016 RIN 0579**  **- AD81**  **Importation of Fresh Blueberry from Morocco**

Policy & Program Development Policy Analysis & Developmenti



### Summary This analy sis examines the expected economic impact for U.S small entities of a rule that will allow the importation of fresh blueberry from Morocco into the continental United States. The Small Business Administration’s small

- entity standard for U.S. farms that produce fresh blueberr y is annual receipts of not more than $750,000. As reported b y the 2007 Census of Agriculture , the average value of sales b y the 7,516 U.S. farms that produced fresh blueberr y that ye ar was about $53,000, well below the small

- entity standard. Morocco expects to export 360,000 pounds of fresh blueberr y to the continental United States annually . This quantity is equivalent to about one

- tenth of one percent of the average annual supply (utilized production plus imports minus exp orts ) of fresh blueberry in the United States , 2007

- 201 2

. P er capita consumption of fresh blueberry has increased from about 0.6 pounds in 2007 to 1.3 pounds in 2012. T he quantity imported from Morocco will result in a negligible addition to current supp lies, and will marginally help meet the United States’ rapidly increasing demand for fresh blueberry

. While most blueberry farms are small, this rule will not have a significant economic impact on a substantial number of small entities.1



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

Flexibility

Act, for certification by

the APHIS Administrator that the rule will not have a significant economic impact on a substantial number of small entities. APHI S received a request from Morocco to authorize the importation of fresh blueberry into the continental United States under a s ys tem s approach. In response to Morocco’s request, APHI S produced risk analy sis and risk management documents. The latter identifies the risk mitigation measures expected to prevent the introduction of plant pests in the commercial shipments of fresh blueberr y from Morocco

. These measures include approved postharvest treatments, inspections for pests during growing seasons, and certification that consignments of blueberr y meet phy

tosanitary requirements. The Regulatory

Flexibility

Act requires agencies to eva luate the potential effects of their proposed and final rules on small business, small organizations and small governmental jurisdictions. Section 60 4 of the Act requires an agency to prepare a final regulatory flexibility anal ys is ( F RFA) that describes the expected impact of the rule on small entities and a description of the steps the agency

has taken to minimize significant economic impact s on small entities consistent with the stated ob jectives of applicable statutes. Inplace of the F RFA, the head of the agency may certify that a rule will not have a significant economic impact on substantial number of small entities.2



### U.S Blueberry Production and Trade The United States is the largest producer of blueberr y , providing 55 percent of the world’s supply

in 201 1 , followed by

Canada at 32 percent. 1 In the United States, most blueberry fruit are picked between April and August. 2 Fresh blueberry production is a growing U.S. industry ; utilized production expanded by 8 7 percent between 2007 (about 150 million pounds) and 201 2 (about 2 81 million pounds) (table 1).
Table 1. U.S f

resh blueberry

production , trade, and per capita consumption, 2007

- 201 2 Year Utilized

Production Imports Exports Domestic Supply Per Capita

Consumption million pounds pounds 2007 150.28 77.37 50.60 177.05 0.59 2008 194.11 114.89 64.19 244.81 0.80 2009 225.65 133.28 64.28 294.65 0.96 2010 246.93 169.24 70.23 345.94 1.12 2011 287.90 192.53 78.50 401.93 1.29 2012 p 281.30 21 2

. 45 73.58 4 20

. 17 1.30 Six

- year average 231.03 149.96 66.90 312.24 1.01 Source: USDA, Economic Research Service, http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentI D=1765 p Preliminary

.

1 UN Food and Agriculture Organization, as reported by USDA Economic Research Service, http://usda.mannlib.cornell.edu/MannUsda/viewDocu mentInfo.do?documentID=1765
2 USDA Economic Research Service, http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=17653

The United States is a net importer of fresh blueberr y . As shown in table 1, between 2007 and 201 2 , the United States imported 1 50 million pounds of blueberry per y ear on average, while exporting 6 7 million pounds. In201 2 , the quantity of blueberr y exported by the United States totaled about 73.6 million pounds, and imports totaled about 212.5 million pounds. While U.S. exports of fresh blueberry have been expand ing , the growth in imports has been even greater despite increased U.S. production. Between 2007 and 2012, exports increased by more than 50 percent; imports in 2012 were approaching three times the ir 2007 level. Canada received about 90 percent of U.S. fresh blueberry exports between 2007 and 201 2 (table 2)

. Chile is the leading supplier of fresh blueberr y imported b y the United States (57 percent, 2007

- 2012) , followed by Canada (28 percent) (table 3). Fresh b lueberry imports from both of these countries have boomed in recent y ears , given the ra pid increas e in U.S. demand

. As shown in table 1, p er capita consumption of fresh blueberry has increased from about 0.6 pounds in 2007 to 1.3 pounds in 2012. Chile ’s exporters also benefit from a production cy cle that is counter

- seasonal to that of the United States.4

Table 2. U.S fresh blueberry exports, 2007

- 201 2 , million pounds
Destination 2007 2008 2009 2010 2011 2012 Six

- year Average million pounds World 50.60 64.19 64.28 70.23 78.50 73.58 66.90 Canada 47.03 59.88 58.90 63.65 69.98 63.92 60.56 Japan 0.97 2.06 3.26 3.71 5.74 5.24 3.50 Hong Kong 0.15 0.29 0.40 0.71 0.78 2.19 0.75 South Korea 0.15 0.33 0.29 0.53 0.42 0.24 0.33 United Kingdom 1.85 1.18 0.63 0.20 0.36 0.40 0.77 Rest of World 0.45 0.45 0.80 1.44 1.22 1.58 0.99 Source: USDA, Economic Research Service, http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentI D= 1765
Table 3 . U.S fresh blueberry imports , 2007

- 201 2 , million pounds
Source 2007 2008 2009 2010 2011 2012 Six

- year Average million pounds World 77.37 114.89 133.28 169.24 192.53 212.45 149.96 Chile 37.83 61.90 74.23 100.95 122.72 117.12 85.79 Canada 27.30 36.74 41.09 43.43 42.37 64.80 42.62 Argentina 11.50 14.38 15.88 20.56 20.96 21.02 17.38 Mexico 0.07 0.29 0.79 2.10 4.11 7.87 2.54 Uruguay 0.27 1.25 1.03 1.76 2.04 1.45 1.30 New Zealand 0.38 0.32 0.25 0.23 0.17 0.11 0.24 Rest of World 0.03 0.01 0.01 0.21 0.15 0.07 0.08 Source: USDA, Economic Research Service, http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentI D= 17655



### Potential Impact on Small Entities Blueberry production is classified within the North American Industry Classification Sy stem under Berry

(except Strawberry ) Farming (NAICS 111334), for which the Small Business Administration’s small

- entity standard is annual revenue of not more than $750,000. 3 The latest data on the number of farms that produce blueberr y are found in the 2007 Census of Agricultur e , which reports that the average value of blueberr y sold per farm was about $53,000. 4 Clearly , most if not all blueberry producers are small entities. Table 4 shows that between 2002 and 2007, the number of farms that harvested blueberr y increased from 6,428 to 7,516, and the number of acres increased from about 52,000 to over 60,000. Table 4. Number of blueberry farms and area harvested in leading States, 2007 and 2002

State 2007 2002 2007 2002 7, 516 6, 428 60, 353 52, 002 Mi ch ig an 758 590 19, 641 12, 274 Ore gon 713 659 5, 185 3, 887 Washi ngton 475 289 3, 926 289 Flor id a 442 343 2, 376 1, 646 New Yo rk 407 351 1, 097 842 Ge orgi a 343 408 4, 802 4, 451 Mi ssissippi 317 249 2, 209 1, 289 North Carol ina 297 267 5, 323 5, 009 New Jer sey 268 240 7, 605 7, 468 Ala bama 207 196 347 400 Cal ifor ni a 186 97 2, 232 827 Ar ka nsas 82 140 269 675 Others 3, 779 3, 189 24, 982 25, 219 Sour ce : NASS, Ce nsus of Ag ri cu lt ure , 2007 an d 2002. Number of Farms Acres U. S

3 Sm all Business Admin istration Table of Small Business Size Standards http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf 4 2007 U.S. Census of Agriculture and USDA Economic Research Service.6

Morocco expects to annually export 360,000 pounds of fresh blueberr y to the continental United States. This quantity is equivalent to about one

- tenth of one percent of U.S . domestic supply (utilized production plus imports minus exports) between 2007 and 2012

. We expect shipments to arrive in July and August, during the latter part of the U.S. season. Any impact on U.S. producers is expected to be negligible, given the relativel y small quantity that Morocco intends to export to the United States

. No significant comments were received on our finding that the proposed rule would not result in a significant economic impact on a substantial number of small entities. One commenter suggested that the annual quantity of blueberry

imported from Morocco be allowed to exceed 360,000 pounds only if approved b y AP HI S, and that the p rice not be allowed to be less than that of domestically produced blueberry

. Even if these suggestions were in the public’s interest , APHI S has no authority to restrict import volumes or set market prices. Other commenters expressed satisfaction with the current availability and qualit y of fresh blueberr y in the United States, and were concerned about the rule’s negative impact on U.S. blueberry farmers ’ busines ses. As indicated, the quantity imported from Morocco will result in a negligible addition to current supplies, and will marginally help meet the United States’ rapidly increasing demand for fresh blueberry

. T he APHI S Administrator has determined that this action will not have a significant economic impact on a substantial number of small entities.