Analysis in Support of Certification that the Rule will not 

have a Significant Economic Impact on a Substantial 

Number of Small Entities

Proposed Rule

Importation of Litchi from Australia

APHIS-2009-0084

RIN 0579-AD56

U.S. Department of Agriculture

Animal and Plant Health Inspection Service

August 2010
ii

Summary

This proposed rule is in response to a request from Australia to export fresh litchis to all 

States in the United States except Florida. Litchi is grown in Florida, Hawaii, and California, and 

U.S. production is estimated to be about 500 metric tons (MT) per year. Based on available 

information, most if not all litchi farms are small entities.

The United States imports litchis from such countries as Taiwan, China, Israel, and 

Mexico. Australia expects to export about 400 MT of litchis to the United States annually. This 

amount is equivalent to less than 3 percent of the quantity of litchis that was imported by the 

United States in 2004, the latest year for which we have data. Most likely, the quantity of litchis 

expected to be imported from Australia is of even lesser significance when compared to current 

litchi imports by the United States, given the expanding demand for this fruit.

Any litchi price declines that might result from this rule would be insignificant, especially 

if as is likely, at least some litchi imports from Australia were to displace imports from other 

countries. Moreover, given that the agricultural seasons in the Southern Hemisphere are

generally the opposite of those in the Northern Hemisphere, the proposed imports from Australia 

likely would not directly compete with U.S. litchi production. Based on this information, the 

APHIS Administrator certifies that the proposed rule, if promulgated, will not have a significant 

economic impact on a substantial number of small entities. 
1

Introduction 

This analysis provides the basis, as required by the Regulatory Flexibility Act, for 

certification by the APHIS Administrator that the proposed rule, if promulgated, will not have a 

significant economic impact on a substantial number of small entities.

In response to a request from Australia, APHIS is proposing to allow the importation of 

litchis into all States in the United States except Florida. Currently litchis are prohibited entry

from Australia due to pest risk concerns. Based on a pest risk analysis, APHIS has determined 

that it is not necessary to prohibit or restrict the movement of litchis from Australia to the United 

States provided certain pest mitigation measures are taken. Litchis would not be allowed into 

Florida due to the risk associated with the litchi rust mite. 

World production of litchi is estimated to be 2.11 million metric tons (MT), with China 

accounting for approximately 50 percent (0.6 million to 1.5 million MT) followed by India (0.5 

million MT) and Taiwan (0.1 million MT). The United States produces approximately 500 MT

per year, which represents less than 0.03 percent of world production. U.S. litchi production is 

concentrated in the States of Florida, Hawaii, and California. Florida has the largest area under

production (1,200 acres), followed by Hawaii (300 acres) and California (60 acres) (Evans et al.

2002). Currently, Australia produces 3,500 MT of litchis.1 Australia is proposing to export 

approximately 20 forty-foot containers of litchis per year to the United States, which is 

equivalent to about 400 MT. 

In 2004, the United States imported a total of 14, 854 MT of litchis from China, Taiwan,

and Mexico. Australia’s proposed export quantity represents about 2.7 percent of U.S. imports in 

2004. 

 

1Lychee Production in Australia: http://www.fao.org/docrep/005/ac684e/ac684e05.htm
2

Potential Impact on Small Entities

For the purpose of this analysis and following the Small Business Administration (SBA) 

guidelines, the entities potentially affected by the proposed rule are classified within the 

following industries: Other Non Citrus Fruit Farming (NAICS 111339), Postharvest Crop 

Activities (except cotton ginning) (NAICS 115114), and Fresh Fruit and Vegetable Merchant 

Wholesalers (NAICS 424480). Establishments classified within Other Non Citrus Fruit Farming 

are considered small by SBA standards if annual sales are not more than $750,000. APHIS does 

not have the size distribution of litchi producers in particular but according to the Census of 

Agriculture there were 23,641 farms classified as Other Non Citrus Fruit Farming in 2007.2 The 

market value of crops sold by these farms that year was about $111,000, well below the smallentity standard. We infer that most if not all U.S. litchi farms are small. Establishments 

classified within Postharvest Crop Activities (except cotton ginning) are considered small by

SBA standards if annual sales are not more than $7 million. The percentage of establishments 

that meet this standard is not known; neither the Census of Agriculture nor the Economic Census 

reports revenue for these establishments. Establishments classified within Fresh Fruit and 

Vegetable Merchant Wholesalers (NAICS 424480) are considered small by SBA standards if 

they employ not more than 100 persons. According to the 2002 Survey of Business Owners, 97 

percent of the establishments in this category employed fewer than 100 people.

From 1998 to 2004the most current information available U.S. imports of litchi 

increased from about 1,000 MT to approximately 15,000 MT. During the same time frame, the 

price of litchis declined from $5.07/lb to $1.05/lb. This increase in imports can be attributed to 

 

2 USDA NASS. 2007 Census of Agriculture, Table 46. Selected Characteristics of Farms by North American 

Industry Classification System: 2007,

http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_1_US/st99_1_046_046.pdf
3

improvements of post harvest activities that have increased the shelf life of the fruit, along with 

facilitating trade regulations. Also, the increase in litchi imports is in part attributable to

expanding demand as a result of growing Asian and Hispanic populations in the United States

(Evans et al. 2002). 

Australia is expecting to export 20 forty-foot containers (400 MT) of litchis per year to 

the United States. This represents less than 3 percent of U.S. litchi imports in 2004. Most likely, 

this quantity of litchis is of even lesser significance when compared to current litchi imports by

the United States, given the expanding demand for this fruit.

Given that the agricultural seasons in the Southern Hemisphere are generally the opposite 

of those in the Northern Hemisphere, the proposed imports from Australia likely would not 

directly compete with U.S. litchi production. The litchis that are grown in Florida, California, 

and Hawaii are produced primarily for local markets. It is unlikely that an additional 400 MT of 

imports would have a significant impact on the U.S. litchi market. Any litchi price declines that 

might result, if at all, from this rule would be insignificant, especially as at least some litchi 

imports from Australia are expected to displace imports from other countries. 

Under 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.
4

References

Census of Agriculture, 2007, 

http://www.agcensus.usda.gov/Publications/2007/Full_Report/index.asp

Evans, E.A., Degner, R.L., Crane, J.H., Rafie, A.R., & Balerdi, C.F. (2004). Is It Still Profitable 

to Grow Lychee in Florida?. Electronic data information source of food and resource 

economics department, florida cooperative extension service, institute of food and 

agricultural sciences, university of florida. Retrieved (2010, June 15) from 

http://edis.ifas.ufl.edu/fe496

Evans, E.A., & Degner, R.L. (2005). Recent Developments in World Production and Trade of 

Lychee (litchi chinensis): Implications for Florida Growers. Proceedings of the Florida 

State Horticultural Society, 118. Retrieved from 

http://brokert10.fcla.edu/DLData/HP/HP00000118/SN00971219

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