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<body><h1>Analysis in Support of Certification that the Rule will not have a Significant Economic Impact on a Substantial Number of Small Entities</h1>
<h1>Proposed Rule
</h1>
<h1>Remove Mandatory testing for tuberculosis and brucellosis for goats intended for export and brucellosis for swine intended for export.</h1>
<h1>Docket No. APHIS-2009-0067</h1>
<h2>U.S. Department of Agriculture
</h2>
<h2>Animal and Plant Health Inspection Service
</h2>
<h2>November, 2009
</h2>
<h1>Introduction 
</h1>
<p>This analysis provides the basis, as required by the Regulatory Flexibility Act, for certification by the APHIS Administrator that the proposed rule, if promulgated, would not have a significant economic impact on a substantial number of small entities.
</p>
<p>APHIS’ current regulations in 9 CFR part 91, “Inspection and Handling of Livestock for Exportation,” prescribe conditions for exporting animals from the United States.  Section 91.6 requires that goats be tested for TB and brucellosis prior to export. Section 91.9 requires that swine be tested for brucellosis prior to export.
</p>
<p>APHIS wants to amend 9CFR parts 91.6 and 91.9 to remove mandatory testing for TB and brucellosis for goats and swine intended for export to countries that do not require such testing.  This action will represent a reduction in compliance costs currently associated with export requirements for live goats and swine. In the TB program APHIS uses $10 to $15 per head as the cost to do a caudal fold test (CFT).
  The brucellosis test costs less than the TB.</p>
<p>The United States is a large net importer of live swine, with trade moving from north to south. Significant numbers of swine are imported from Canada, while U.S. swine are exported to Mexico.  Since the mid-1990s, Mexico has been the destination of over three-fourths of US swine exports.  Between 2005 and 2008, the yearly average exports of US live swine to Mexico were 86% in volume and 59% in value of US hog exports, or 120,229 exported hogs per year valued at $14.6 million.  </p>
<p><b> Table 1: Volume & Value of U.S. Exports of Live Swine (HS-4:0103) in (2005-2008) averages</b></p>
<table><tbody><tr>	<td><p>Partner Country</p>
</td>	<td><p><b>Quantity</b> (in Heads)<b></b></p>
</td>	<td><p><b>Value </b>(in US Dollars)<b></b></p>
</td></tr>
<tr>	<td><p class="list_Paragraph">1. Mexico</p>
<p><i>(Percent of Total)</i></p>
</td>	<td><p>120,229
</p>
<p>        (86%)</p>
</td>	<td><p>$14,595,000</p>
<p><i> (59%)</i></p>
</td></tr>
<tr>	<td><p class="list_Paragraph">2. Hong Kong</p>
</td>	<td><p>5,988</p>
</td>	<td><p>$1,789,000</p>
</td></tr>
<tr>	<td><p class="list_Paragraph">3. China</p>
</td>	<td><p>2,948</p>
</td>	<td><p>$4,248,000</p>
</td></tr>
<tr>	<td><p class="list_Paragraph">4. South Korea</p>
</td>	<td><p>1,006</p>
</td>	<td><p>$1,202,000</p>
</td></tr>
<tr>	<td><p><i>Sum of US Exports to the 4 countries </i></p>
<p><i>(Percent of Total)</i></p>
</td>	<td><p><i>130,171</i></p>
<p><i> (94%)</i></p>
</td>	<td><p><i>$21,834,000  
</i></p>
<p><i>(88%)</i></p>
</td></tr>
<tr>	<td><p><i>Total Exports</i></p>
</td>	<td><p><i>137,947 </i></p>
</td>	<td><p><i>$24,847,000</i></p>
</td></tr>
</tbody></table>
<p>Between 2005 and 2008, the yearly average US exports of live hogs were 137,947 heads, valued at $24.85 million. Four countries accounted for 88% of the value and 94% of the volume of US exports of live hogs (Table 1). </p>
<p><b>Table 2:  Volume & Value of U.S. Exports of Live Goats (HS-6:010420) in (2005-2008) averages</b></p>
<table><tbody><tr>	<td><p>Partner Country</p>
</td>	<td><p><b>Quantity </b>(in Heads)<b></b></p>
</td>	<td><p><b>Value </b>(in US Dollars)<b></b></p>
</td></tr>
<tr>	<td><p class="list_Paragraph">1. Mexico
</p>
<p><i>(Percent of Total)</i></p>
</td>	<td><p>8,117 
</p>
<p>(76%)</p>
</td>	<td><p>$522,000 
</p>
<p>(77%)</p>
</td></tr>
<tr>	<td><p class="list_Paragraph">2. Canada
</p>
<p><i>(Percent of Total)</i></p>
</td>	<td><p>1,541
</p>
<p> (15%)</p>
</td>	<td><p>$101,000</p>
<p> (15%)</p>
</td></tr>
<tr>	<td><p><i>Sum of US Exports to the 2 countries  (Percent of Total)</i></p>
</td>	<td><p><i>9,658    
</i></p>
<p><i>(91%)</i></p>
</td>	<td><p><i>$623,000</i></p>
<p><i> (92%)</i></p>
</td></tr>
<tr>	<td><p><i>  Total Exports</i></p>
</td>	<td><p><i>10,638</i></p>
</td>	<td><p><i>$681,000</i></p>
</td></tr>
</tbody></table>
<p>Source: Global Trade Atlas, 2009.  Http://www.gtis.com/gta/ </p>
<p>The United States is a net exporter of live goats.  Between 2005 and 2008, the yearly average of U.S. exports of live goats consisted of 10,638 heads and valued at $681 thousands. The majority of U.S. exports of live goats during that time went to Mexico (76%) and Canada (15%). Thus, over 90% of U.S. live goat exports went to two North American countries.</p>
<h1>Potential Impact on Small Entities</h1>
<p>The proposed rule would not negatively affect live swine and live goat exporters.  Based on data from the 2002 Economic Census and Small Business Administration (SBA) guidelines, we expect a majority of operations affected by the proposed regulation to be small entities.
  According to the 2002 Economic Census, there were approximately 662 establishments -primarily engaged in the merchant wholesale distribution of live hogs and goats- included under the category of livestock wholesale trade (NAICS 424520).  Of those 662 establishments, 600 entities engaged in live hog wholesaling trade (product line code: 15012) and the remaining 62 entities engaged in live goat wholesaling trade (product line code: 15014)
.  The SBA size standards by NAICS industry consider the above establishments (NAICS 424520) to be small if they employ less than 100 employees.  There is not information available about the number of employees for goat and hog wholesale trade establishments (Product Line Codes: 15012 and 15014) either per entity or for the whole industry, but rather for the whole livestock (except horses and mules) wholesale trade industry (NAICS 424520).  In 2002, under the NAICS 424520 industry, there were 4 firms -out of the 901 entities- that operated with more than 100 employees.  Since the 662 establishments engaging in hog and goat wholesale trade were part of the 901 entities of livestock wholesale trade industry, we conclude that the majority of live goat and live hog wholesale trade establishments were small businesses according to the SBA size standards.</p>
<p>The removal of the mandatory testing for TB and Brucellosis for goats and swine indented for export to countries that do not require such testing represents a reduction in compliance costs currently associated with export requirements and it will either benefit or not affect the establishments engaged with exporting live hogs and goats.  The size of the benefit to the entity will depend on the country they are destined, whether the country requires this type of testing and the size of trade.</p>
<p> SEQ CHAPTER \h \r 1Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action would not have a significant economic impact on a substantial number of small entities.</p>
<p>�  This is derived from the payments made to fee basis veterinarians (contract accredited veterinarians) doing routine surveillance testing.  Typically the fee basis doctors are paid $8 per head tested and a farm call fee of $80. However, if the trip is longer than 2 hours the visit will cost the livestock exporter $250 .  The complete test involves 2 trips for the veterinarian to the farm: 1 trip to inject the animal and 1 trip to read the results from the test.
</p>
<p>The SBA Table of Small Business Size Standards is also available online at http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf.  Small Business Administration, 13 CFR Ch.1 (1-1-05 Edition) §121.201.
</p>
<p>2002 Economic Census, Wholesale Trade, Industry Series. “Farm, Floral, and Nursery Supplies: 2002.” Table 3. Product Lines by Kind of Business for the United States.	 
</p>
<p>
</p>
<p>� U.S.Department of Commerce, Economics and Statistics Administration, U.S. Census Bureau. 
</p>
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