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<body><p>Animal and Plant Health Inspection Service</p>
<p>Analysis in Support of Certification that the Rule will not have a Significant Economic Impact on a Substantial Number of Small Entities</p>
<p>Final Rule:  Importation of Papaya from Colombia and Ecuador into the Continental United States</p>
<p>Docket No.: 08-050-2</p>
<p>October 5, 2009</p>
<p>
This final rule has been reviewed under Executive Order 12866.  This rule has been determined to be not significant for the purposes of Executive Order 12866, and therefore, has not been reviewed by the Office of Management and Budget.
</p>
<p>
We will be amending the regulations regarding the importation of papaya cultivar <i>Solo </i>from Colombia and Ecuador into the continental United States.  As a condition of entry, papayas from Colombia and Ecuador will have to meet certain inspection and treatment requirements that mitigate phytosanitary risks associated with the South American fruit fly (<i>Anastrepha fraterculus</i>), the Mediterranean fruit fly (<i>Ceratitis capitata</i>), and a fungal plant pathogen (<i>Phoma caricae-papayae</i>).  The mitigation measures include fruit fly trapping, pest management, cultural practices that maintain low pest prevalence, and hot water treatment to remove pests of concern.  This final rule will make our import regulations more effective and less restrictive, while continuing to protect U.S. agriculture from the introduction of the identified plant pests.</p>
<p>
The Regulatory Flexibility Act requires agencies to evaluate the potential effects of their proposed and final rules on small businesses, small organizations and small governmental jurisdictions.  Section 604 of the Act requires an agency to prepare a final regulatory flexibility analysis (FRFA) that describes the expected impact of the rule on small entities and the steps the agency has taken to minimize significant economic impacts on small entities.  In place of the FRFA, the head of the agency may certify that a rule will not have a significant economic impact on a substantial number of small entities.  This analysis provides the factual basis for certification of this rule.  
</p>
<p>Papaya production is classified under North American Industry Classification System (NAICS) 111339, other non-citrus fruit farming.  The Small Business Administration (SBA) classifies papaya producers as small entities if they have annual sales of not more than $750,000.  In the United States in 2007, the average market value of agricultural products sold by farms classified under other non-citrus fruit farming was about $112,000, well below the small-entity standard.
  Most, if not all, papaya producers in the United States are small entities.</p>
<p>Importers and wholesalers of papayas could be affected by the proposed rule as well. These industries and their small-entity size standards are: Fresh fruit and vegetable wholesalers (NAICS 424480, 100 or fewer employees), grocery stores (NAICS 445110, $27 million or less in annual receipts), warehouse clubs and superstores (NAICS 452910, $27 million or less in annual receipts), and fruit and vegetable markets (NAICS 445230, $7 million or less in annual receipts).  Many of the entities that comprise these industries are small.  </p>
<p>Since publication of the proposed rule, APHIS has obtained updated data on papaya production and exports by Colombia and Ecuador, and domestic production.  Hawaii is the major U.S. producer of papaya.  In 2008, there were 177 farms with 2,040 acres (including bearing and non-bearing acres) producing papaya in Hawaii, the only State for which such data are available.
  Total fresh utilization in 2008 of domestic papaya production was approximately 30.9 million pounds, valued at $14.4 million.
,
  Approximately 50 percent of U.S.-produced fresh papaya is utilized within Hawaii.  The final rule will exclude Hawaii from receiving papaya imports from Colombia and Ecuador.  In 2007, estimated fresh papaya production in Colombia was 456 million pounds and in Ecuador, 95 million pounds.
  Thus, the two South American countries together produce about 18 times more papaya than is grown in the United States.  </p>
<p>Comments received on the proposed rule state that the importation of papayas from Colombia and Ecuador would cause financial harm to domestic papaya growers.  APHIS expects such impacts to be insignificant.  First, the United States is the largest importer of fresh papayas in the world.  The quantity of fresh papayas imported since 1999 has almost doubled as U.S. consumption per capita continues to increase.  Imports as a percentage of domestic fresh papaya consumption has risen from 80 percent in 2000, to over 93 percent in 2007.
  </p>
<p>U.S. fresh papaya imports in 2008 totaled over 274 million pounds, which is nine times larger than domestic production.   Mexico is the principal source of fresh papaya imports by the United States, while additional imports arrive from other Central and South American countries such as Belize, Brazil, Jamaica and Guatemala.  U.S. producers of papayas compete against less expensive imports.  In 2008, the prices of papaya imports from Mexico and Belize were approximately 27 cents and 19 cents per pound, respectively, excluding freight and other costs of importation.
,
  Average 2008 papaya export prices for Colombia and Ecuador were 37 cents and 23 cents per pound.
  In comparison, the 2008 average market price in Hawaii received for Hawaiian papaya was 43 cents per pound.
  </p>
<p>In sum, the U.S. market for fresh papaya is dominated by imports, and becoming increasingly so.  The addition of Colombia and Ecuador will not significantly affect sales by U.S. producers.  Based on the foregoing information, the Administrator has certified that this final rule will not have a significant economic impact on a substantial number of small entities.  </p>
<p>� USDA NASS.  2007 Census of Agriculture (v1.2), Table 46, Selected Characteristics of Farms by North American Industry Classification System: 2007.
</p>
<p>� USDA NASS.  Hawaiian Field Office, Fruit and Nuts Report.  Papayas (annual). Oct. 20, 2008. <�HYPERLINK "http://www.nass.usda.gov/Statistics_by_State/Hawaii/Publications/Fruits_and_Nuts/annpap.pdf"�http://www.nass.usda.gov/Statistics_by_State/Hawaii/Publications/Fruits_and_Nuts/annpap.pdf�> 
</p>
<p>� USDA NASS.  Hawaiian Field Office, Fruit and Nuts Report.  Papayas (monthly).  Feb. 12, 2009.  <�HYPERLINK "http://www.nass.usda.gov/Statistics_by_State/Hawaii/Publications/Archive/xpap1208.pdf"�http://www.nass.usda.gov/Statistics_by_State/Hawaii/Publications/Archive/xpap1208.pdf�> 
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<p>� USDA NASS.  Commodity Papayas.  Noncitrus Fruits and Nuts 2008 Summary.  July 2009.  <�HYPERLINK "http://usda.mannlib.cornell.edu/usda/current/NoncFruiNu/NoncFruiNu-07-08-2009.pdf"�http://usda.mannlib.cornell.edu/usda/current/NoncFruiNu/NoncFruiNu-07-08-2009.pdf�> 
</p>
<p>� Food and Agriculture Organization.  FAOStat.  Commodity “papayas” converted to pounds from tonnes.  Retrieved 8/11/09  <�HYPERLINK "http://faostat.fao.org/site/567/default.aspx" \l "ancor"�http://faostat.fao.org/site/567/default.aspx#ancor�> 
</p>
<p>� USDA ERS.  Fruit and Tree Nuts Situation and Outlook Yearbook.  Table F-9 Fresh papayas:  Supply and Utilization.  October 2008.  <�HYPERLINK "http://www.ers.usda.gov/Publications/fts/Yearbook08/FTS2008.pdf"�http://www.ers.usda.gov/Publications/fts/Yearbook08/FTS2008.pdf�> 
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<p>� Global Trade Atlas. United States Import Statistics, annual data.  Commodity HS code 080720, Papayas, Fresh. Retrieved 8/10/09.  <�HYPERLINK "http://www.gtis.com/gta"�http://www.gtis.com/gta�>  
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<p>� Custom Import Value (C.V) – This value is generally defined as the price actually paid or payable for merchandise when sold for exportation, excluding import duties, freight, insurance, and other charges incurred in bringing the merchandise to the importing country
</p>
<p>� Global Trade Atlas.
</p>
<p>� USDA NASS.  Agricultural Prices 2008 Summary.  August 2009.  <�HYPERLINK "http://usda.mannlib.cornell.edu/usda/current/AgriPricSu/AgriPricSu-08-05-2009.pdf"�http://usda.mannlib.cornell.edu/usda/current/AgriPricSu/AgriPricSu-08-05-2009.pdf�> 
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