### United States Department of Agriculture
Animal and Plant Health Inspection Service October 2010 Analysis in Support of Certification that the Rule will not have a Significant Economic Impact on a Substantial Number of Small Enti ties
Proposed Rule APHIS

- 2010

- 0024 RIN 0579

- AD38
Importation of Fresh Fig and Pomegranate Fruit from Chile into the Continental United States

Policy & Program Development Policy Analysis & Developmenti 

### Summary
This proposed rule would further all ow the importation of fresh fig and pomegranate fruit
from Chile using a system approach

. E ntities potentially affected by the proposed rule are fig and pomegranate fruit growers . They are classified within the industry , Other Non

- citrus Fruit Farming , fo r which the S mall B usiness A dministration small

- entity standard is annual sales of not more than $750,000. A nnual receipts for this industry averaged about $112,000 in 2007 , well below the small

- entity standard

. While most U.S. fig and pomegranate operati ons are small, they are not expected to be significantly affected by the proposed rule. For both fruits, relatively small quantities are expected to be imported from Chile during the U.S. off

- season : less than 1 percent and less than 4 percent of U.S. con sumption of figs and pomegranates in recent years, respectively. The

c ounter

- seasonal ity of the imports from Chile will preclude negative price impacts for U.S. producers and may help accelerate the general demand for these fruits as consumers further
deve lop the taste for these fruits , thereby benefiting domestic producers also over time. Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action, if promulgated, will not have a significan t economic impact on a substantial number of small entities.ii 

### Introduction
Currently, fresh fig and pomegranate fruit are approved for importation from Chile in to
the continental United States under the use of specific designated phytosanitary measures
. This proposed rule would further allow the importation of fresh fig and pomegranate fruit from Chile using a systems approach

. The importation of figs and pomegranates from Chile would benefit U.S. consumers and could potentially benefit U.S. producers as well. Figs are native to southwest Asia and the Mediterranean region, where the climate is warm and dry. The popularity of fresh figs is steadily growing due to the health benefits of the
fruit . Some of the health benefits include fiber, co pper, manganese, magnesium, potassium, calcium, and vitamin K

. Pomegranates have also become increasingly popular in recent years, mainly due to research on their health benefits. Pomegranate juice has three times the amount of
antioxidants as green tea or red wine ; antioxidants are health beneficial because they are
nutrients in our food that reduce the effect of dangerous oxidants (Wo h lfarter et al. 2010). The number of food and drink products containing pomegranate increased seven
- fold between 1995 (2 58 products) and 2009 (1800 products) (Gloor 2009). Due to the recognized health benefits,
U.S. demand for and production of figs and pomegranates are expected to continue to increase. The Regulatory Flexibility Act requires agencies to evaluate the poten tial effects of their proposed and final rules on small businesses, small organizations and small governmental jurisdictions. Section 60 3 of the Act requires an agency to prepare a n initial regulatory flexibility analysis ( I RFA) that describes the expecte d impact of the rule on small entities. In place of the I RFA, the head of an agency may certify that a rule will not have a significant2 economic impact on a substantial number of small entities. This analysis provides the factual
basis for certification of this rule

. 

### U.S. Fig Production and Trade
Quantities of figs produced, imported, and exported by the United States in recent years
are shown in table 1. Over the five

- year period, 2004

- 2008, production in California averaged about 41,900 metric tons (M T). It is estimated that California produces about 90 percent of the Nation’s figs. Net imports (imports minus exports) over this period averaged about 1,000 MT (less than 3 percent of production), but ranged widely, from about 330 MT in 2004, to about
2 ,130 MT in 2007. In 2009, the United States exported more figs than were imported. Over the five years, 2004

- 2008, domestic supply averaged 42,900 MT. Table 1. U.S. fig production, 2004

- 2008, and imports and exports, 2004

- 2009, metric tons Year Prod uction 1 Imports Exports Domestic Supply 3 2004 46,357 3,957 3,630 46,684 2005 44,452 6,142 4,640 45,954 2006 38,828 5,261 4,859 39,230 2007 43,363 5,018 2,890 45,491 2008 36,287 4,867 4,057 37,097 2009 2 4,655 5,330

-- Sources: For production, USDA, NASS, Noncitrus Fruits and Nuts Summary, various issues, as reported the Economic Research Service, http://www.ers.usda.gov/Publications/FTS/Yearbook09/FTS2009.pdf . For imports and exports: U.S. Census Bureau, as reported in the Global Trade Atl as, HS 080420, Figs, fresh or dried. 1 Quantities produced are for California, include fresh and processed, and are converted from short tons. 2 2008 is the most recent year for which there is published information on fig production. 3 Production plus imp orts minus exports.
Turkey provided 70 percent of U. S. fig imports in 2009, followed by Greece and Spain, with 13 and 8 percent, respectively. T he value of U.S. fig imports in 2009 totaled $10.6 million. Forty percent of U.S. fig exports were to Canad a, and 36 percent were to Mexico. Other3 destinations included Hong Kong, Japan, and the United Kingdom. The value of U.S. fig exports in 2009 was $17.5 million. 

### U.S. Pomegranate Production and Trade

T he United States is one of the top five producers of p omegranates worldwide. According to the National Agricultural Statistics Service (NASS) , there were 369 pomegranate farms with 9,535 planted acres in 2002 ; in 2007 , there were 599 farms with 24,517 acres (table
2 ) . Of the 24,517 total planted acres, 50.6 percent (12,415 acres) were of nonbearing age. Of the 599 farms, 48.6 percent (291 farms) had orchards of nonbearing age. California accounted for over 99 percent of the total pomegranate acreage in 2007, with 24,458 acres. Pomegranate trees begin produ cing fruit three years after planting and full yields are typically realized during the sixth year (UC Cooperative Extension 2010 ). T he number of planted acres of commercial pomegranates in 2009 was approximately 29,000 acres. In two to three years , the number of bearing acres will increase greatly.

Table 2 . Number of U.S. pomegranate farms and acres, 2002 and 2007 Total Bearing age acres Nonbearing age acres Farms Acres Farms Acres Farms Acres
2 002 369 9,535 312 4,044 109 5,491
2 007 599 24,517 432 12,103 291 12,415 Source: Census of Agriculture, National Agricultural Statistics Service, USDA.

U.S. pomegranate pr oduction is not reported separately by the California Department of Food and Agriculture and USDA , but rather is combined with other fruits under “ miscellaneous fruit production

. ” However, yield estimates have been developed by the University of Californi a Cooperative Extension ( t able 3 ). Using the NASS data for 2007 ( assuming that all 24,517 acres4 are now of bearing age ) and an average yield of about 3.7 MT per acre , U.S. production is
estimated to be around 90 , 700 MT per year and growing. Approximately 75 percent of the U.S. pomegranate crop is sold domestically , while the remaining 25 percent is exported to Japan, Taiwan, Hong Kong, Australia, Singapore, Mexico, and certain Middle Eastern countries (Pomegranate Council 20 07 ). After adjusting for expor ts, U.S. domestic supply is estimated to
be around 68, 0 00 MT

. Table 3

. Estimated Average Pomegranate Yields , 2004

– 2 008 Year Boxes per Acre MT per Acre 2004 333 4.23 2005 300 3.81 2006 234 2.98 2007 286 3.64 2008 296 3.76

Five

year a verage 290 3.68 Source: 2010 Pomegranate C osts and R eturns, UC Cooperative Extension

. Note: P omegranate yield s are measured in boxes per acre. Boxes weigh 28 lbs. Converted from short tons.


### Impact on Small Entities

E ntities potentially affected by the proposed rule are fig and pomegranate fruit growers
. They are classified within the industry , Other Non

- citrus Fruit Farming (NAICS 111339).
Establishments in this industry are considered small by the S mall B usiness A dministration (SBA) standard i f annual sales are not more than $750,000.
It is reasonable to assume that most if not all U.S. growers of figs and pomegranates are small entities, based on composite industry data. In 2007, there were 23,641 farms in the Other
Non

- citrus Fruit Farming c ategory . Their produc tion had a total market value of about $2.6
billion. Thus, annual receipts for this industry averaged $111, 700 , well below the SBA’s small

entity standard

.5 In 2009, Chile exported about 13 4 MT of fresh figs worldwide , including expor ts to the
United States

. According to the pest risk assessment conducted for this rule, Chile is projecting to export 10 40

- foot shipping containers of fresh figs to the United States. It is estimated that a shipping container can hold up to 26 MT of fre sh figs; we assume an import level of 260 MT. This quantity is equal to about 0.6 percent of the U.S. fig supply, based on the average U.S. domestic supply for the years 2004

- 2008 (42,900 MT).
T he quantity of fresh pomegranates that would be imported fr om Chile is estimated to be
between 10 and 100 40

- foot shipping containers. As with figs, a typical 40

- foot container can transport 2 6 MT of pomegranates , so the total quantity that would be imported from Chile is expected to range from 2 6 0 to 2, 6 00 MT pe r year. I f 2, 6 00 MT of fresh pomegranate s were import ed, this amount would be equivalent to less than four percent of the estimated U.S. production that is consumed domestically ( 68,000 MT ). Although th ese percentage s are small, t he increase in supply of figs and pomegranates
could contribute to a slight price decline for U.S. producers, if the fruit were imported during the

same months that domestically produced figs and pomegranates are sold . However, the Chilean
fruit s would be imported during the U.S. off

- season. Pomegranates grown in the United States , for example, are harvested between the months of August and October (UC Cooperative Extension 2010). After harvest, fresh pomegranates can be stored for up to three months in cold storage making them c ommercially available from October through December. Chile plans to export pomegranates to the continental United States during winter months in the Northern Hemisphere. Due to this counter seasonality, fresh pomegranates from Chile would provide consume rs with increased availability of the fruit but not directly compete with U.S. production. Similarly, figs would be imported from Chile during6 the U.S. off

- season , which are the months of December through April; the U.S. production months for figs are pri marily the warm, hot months of summer

. For both fruits but especially for pomegranates , given its rapidly expanding market , the off

- season fruit imports from Chile may help accelerate demand generally by further developing consumer taste , thereby benefiti ng U.S. producers also over time. Under these circumstances, the Administrator of the Animal and Plant Health Inspection
Service has determined that this action, if promulgated, will not have a significant economic impact on a substantial number of small e ntities.7 

### References
California Pomegranates. California Pomegranate Council, 2007. http://www.pomegranates.org/home.shtml

. Census of Agriculture, 2007 http://www.agcensus.usda.gov/Publications/2007/Full_Report/index.asp

. Day, Ken R., Karen M. Klonsky, and Richard L. De Moura. Sample Costs to Establish and Produce Pomegranates. San Joaquin Valley, 2010. Universit y of California Cooperative Extension. Global Trade Atlas, http://www.gtis.com/gta/default.cfm Gloor, Sue. “The Politics of the Pomegranate.” Bard Politik (2009). Bard Globalization and International Affairs. Bard College, 2009. http://bgia.bard.edu/articles.php?cid=5&id=2

. U.S. Small Business Administration. U.S. Small Business Administration: Table of Small Business Size Standards Match to North American Industry Classification System http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf
USDA Economic Research Servi ce: U.S. Fig : Production, 1990

- 2007, http://usda.mannlib.cornell.edu/usda/ers/FTS

- yearbook//2000s/2008/FTS

- yearbook

- 10

- 30

- 2008.pdf Wohlfarter, M., Giliomee, J.H. & Venter, E. 2010. A Survey of the arthropod pests associated with commercial pomegranates, Punica granatum (Lythraceae), in South Africa

. African Entomology 18(1): 192

- 199.