### United States

Department of Agriculture Anim al and Plant Health Inspection Service September 2013 **Analysis in Support of Certification that the** 

**Rule will not have a Significant Economic**  **Impact on a Substantial Number of Small Entities**  **Proposed Rule**  **APHIS -**  **2013 -**  **0059 RIN 0579**  **- AD85**  **Importation of Fresh Unshu Oranges from Japan to the Continental United States,**  **7 CFR 319.28**

Policy & Program Development Policy Analysis & Developmenti



### Summary This analy sis provides the basis for certification that the proposed rule , if promulgated, will not have a significant economic impact on a substantial number of small entities. APHI S received a request from the government of Japan to reassess the requirements for importing unshu oranges into the continental United States. The proposed rule would harmonize our regulations that allow importation of unshu orange s from Japan with our recently amended domestic regulations to prevent the spread of citrus canker disease. E asy - peel, sweet, juicy , seedless mandarin varieties , including unshu orange s , are gaining popularity

in the United States. The United States does not commerciall y produ ce unshu oranges, but does produce various similar mandarin varieties

. U.S. p roduction of these mandarin varieties doubled in six y ears , from a quarter million metric tons (MT) in 2007 , to almost half a million MT in 2012. P roduction value s of mandarin varieties more than doubled , from $ 141 million in 20 07 to $336 million in 2012. In general, harvesting and marketing activities are most active between January

1 and March 31 in California and between November 15 and March 15 in Florida. U.S. imports of mandarin varieties averaged a bout 1 42 ,000 MT per y ear , valued at $178 million, between 2010 and 2012 , with Chile, Spain, Peru and Morocco the main sources

. Net imports (imports minus exports) averaged about 100,000 MT per ye ar . In 2012, Japan exported 2,400 MT of unshu oranges valued at $4.5 million. Canada was the main destination, accounting for 83 percent of Japan’s exports (2,000 MT)

. Unshu oranges have not been import ed from Japan by the United States for the last three years. B etween 1996 and 2009 , the United States imported about 200 MT of unshu orange s from Japan annually , valued at about $340,000 , only during the months of November and December . They wereii

ty picall y sold at a premium in ethnic specialty stores and through small

- package direct deliver y to customers who celebrated the New Year ’s holiday s . Reportedly , u

p to 500 MT of unshu oranges may be imported from Japan under the proposed rule. G iven the much low er volumes and restricted seasonality of past unshu orange imports from Japan (about 200 MT annually imported , and onl y during the months of November and December) , 500 MT may be an am bitious goal

. The 500 MT would be equivalent to less than one

- tenth of one percent of the U.S. suppl y of mandarin varieties in 2012. Korea is currentl y the principal source of unshu orange imports by the United States. Even if imports from Japan were to reach 500 MT , we expect an y product displacement that would occur would be largel y borne b y Korean unshu orange suppliers. The extent to which U .S. producers of other mandarin varieties may be affected would depend upon the quantity imported, the degree to which consumers may substitute unshu oranges for the other mandarin varieties, and their price competitiveness. The Japanese unshu orange shar e of the U.S. market for mandarin varieties is expected to be negligible ; past imports have served a specialty market during a limited time of the y ear ; and they garner a premium price. Collectively , these conditions lead to the conclusion that any effect of the proposed rule for U.S. producers of other mandarin varieties would be small. Under these circumstances, the proposed rule , if promulgated, will not have a significant economic impact on a substantial number of small entities.iii



### Table of Conten **ts** Summary

................................ ................................ ................................ .............................. i Introduction

................................ ................................ ................................ ......................... 1 U.S. production and trade of mandarin varieties

................................ ........................ 2 Japanese production and trade of unshu oranges

................................ ........................ 5 Relations of mandarin production and trade between the United States and Japan

... 8 Potential I mpact on Small Entities

................................ ................................ .................... 101



### Introd **uction** This analy sis 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 entit ies. APHI S received a request from the government of Japan to reassess the requirements for importing unshu oranges 1 based on changes to our domestic regulations

. The proposed rule would harmonize our import regulations for unshu oranges from Japan with recentl y changed domestic regulations for citrus canker, a disease caused b y a complex of Xanthomonas spp. bacteria

. The domestic regulations were amended based on research and a risk assessment that concluded commerciall y packed and disin fected fresh citrus fruit s are not a n epidemiologically significant pathway

for the spread of citrus canker . T herefore, interstate movement of citrus fruit grown in canker quarantine areas does not pose a risk of spreading citrus canker disease if the frui t is treated with an approved disinfectant and packed in a commercial packinghouse under a compliance agreement

. W e propose to remove the requirements in 7 CFR 319.28 that unshu orange s imported from Japan must be grown in specified canker

- free export are as and be jointly inspected b y the national plant protection organization (NPPO) of Japan and APHI S during harvest and packing

. 2 , 3 , 4

1 Citrus reticulata Blanco var. unshu, Swingle [ Citrus unshiu Marcovitch, Tanaka] , also known as Satsuma mandarin. 2 Requirements for the movement of unshu oranges from Japan w ould also include: importation in commercial consignments only and practically free of leaves, twigs and other plant parts except for stems that are less than one inch long and attached to the fruit; packing in a commercial packinghouse registered with the Japanese NPPO; standard packing house procedures including treatment with surface disinfectant listed in 7 CFR Part 305; and a phytosanitary certificate. 3 Shipm ents w ould still not be allow ed to move from Kyushu Island into citrus

- producing States due to a fruit fly that is found in Kyushu. Shipments from Honshu or Shikoku Islands w ould still require the approved treatment for2

Since the U.S. citrus industry produce s man y mandarin varieties which are substitutes for unshu orange s , 5 w e first present information on the production and worldwide trade of mandarin varieties by the United States and b y J apan , 6 followed by information specific to the U.S. market for unshu orange imports . We then address likel y effects of the proposed rule for small entities. **U.S. p roduction and**  **trade of mandarin varieties**  E asy - peel, sweet, juicy , seedless mandarin varieties are gaining popularit y in the United States. U.S. p roduction of mandarin varieties doubled in six y ears, from 245 ,000 metric tons (MT) in 2006/07 , to 486 ,000 MT in 2011/12 ( Table 1 )

. 7 A ctive harvesting and marketing dates for t angerines are between January 1 and March 31 in California and between No vember 15 and March 15 in Florida. 8 Im ports of mandarin varieties have been relatively stable, ranging from 121 ,000 to 1 49 ,000 MT between 2006/07 and 2011/12 , except for a decline to 97,000 MT in 2007/08

. Considerably

smaller quantities of mandarin varieties are e xport ed by the United States, with quantities fluctuating between 8,000 and 51 ,000 MT over the six y ears, 2006/07 to 2011/12

. U.S. net import s (imports minus exports) averaged 98,000 MT over this s ame period

. Supported by the robust growth of domestic production and stable imports, per capita consumption of fresh mandarin varieties grew by 58 percent between 2006/07 ( 2. 6 pounds ) and 2011/12 ( 4. 1 pounds )

.

insect pests before they may move to citrus

- producing States, and treatment would still be required for movement to any U.S. State if quarantine pests are found on inspection. 4 Japan and the Republic of Korea have been principal suppliers of unshu orange to the United States. The regulation s concerning the importation of unshu oranges from Cheju Island of the Republic of Korea w ere amended in 2010 . Federal Register ( Vol. 75, No. 196 / Tuesday, October 12, 2010, [Page 62455 ] ) Docket No. APHIS

- 2010

- 0022 , Final Rule: Im

portation of Fresh Unshu Oranges From the Republic of Korea Into the Continental United States , http://www.regulations.gov/#!docketDetail;D=APHIS

- 2010

- 0022 5 Cindy Fake, UC Davis Cooperative Extension, “A Mandarin by Any Other Name” 2004, http://www.mountainmandarins.com/documents/10Oct2005

- MMGA.pdf 6 Include all tangerine hybrids , such as Fallglo, Sunburst, Honey, clementine, mandarin, Satsuma, as well as tangelos and tangors and other citrus hybrids

. 7 Mandarin variety season begins in November of first year shown. 8 USDA

- NASS “Fruits and Tree Nuts: Blooming, Harvesting and Marketing Dates” December 2006.3

**Table 1**  **. U.S. Fresh Mandarin Varieties: Production**  **a , Imports, Exports, Domestic Supply**  **and Per Capita Use: Seasons 2006/07 through 2011/12 b**  Season Production c Imports Exports Net Imports Domestic

Supply e Per Capita

Use

--- 1, 000 Metric Ton s (MT)

--- Pounds 2006/ 07 245 121 16 105 350 2.6 2007/ 08 360 97 32 65 425 3.1 2008/ 09 338 131 29 102 440 3.2 2009/ 10 435 128 8 120 556 4.0 2010/ 11 485 149 51 98 582 4.1 2011/ 12 f 486 136 37 99 585 4.1 Source : USDA

- Economic Research Service ( ERS ) Fruit and Tree Nut Yearbook , 2012 , Table G

- 19 . (Pounds are converted to metric tons to be consistent with other dat a in this analysis

. ) a Includes all tangerine hybrids , such as Fallgio, Sunburst, Honey, clementine, mandarin, and Satsuma as well as tangelos and tangors

. b Season begin s in November of first year shown

. c Utilized production, e xcludes processed fruit. d Net import equals imports minus exports. e U.S. production (excluding processed utilization) plus net imports. f Preliminary

. B earing acreage s for mandarin varieties have also steadily increas ed , from 36,800 acres in 2006/07 to 52,60 0 acres in 2011/12 ( Table 2 )

. P roduction value s have sharply increased by 138 percent , from $ 141 mi lli on in 2006 / 07 to $336 million in 2011/12 , reflecting the expanding demand for mandarin varieties in the United States. **Table 2**  **. U.S. Fresh Tangerine**  **a and Mandarin Acreage, Production, Price and Value:**  **Seasons 2009/10 through 2011/12** Season Bearing

Acreage b (1,000 acres) Production

( m illion boxes c ) Price per box c

(d ollars) Value of

Production (m illion dollars) 2006/07 36.8 5.9 23.44 141 2007/0 8 40.5 9.2 23.76 226 200 8 / 09 44.2 8.6 23.05 205 2009/ 10 45.8 11.5 22.90 267 2010/ 11 48.3 12.3 25.70 320 2011/ 12 52.6 12.4 26.68 336 Source: USDA

- National Agricultural Statistics Service (NASS) “Citrus Fruits Summary ” September 2012 , 2011, 2010, and 2009. a Includes tangelos and tangors.4 b Consists of three States: California, Florida and Arizona. In 2011/12, California accounted for the largest bearing area (38,000 acres), follow ed by Florida (12,100 acres) and Arizona (2,500 acres)

. c Equivalent pac kinghouse

- door returns. Box sizes vary by States, citrus type, and season. In 2011/12, the box weight for tangerines in California and Arizona was 80 pounds, whereas in Florida it wa s 95 pounds. In 2012, the United State s exported 36,500 MT of mandarin va rieties , valued at $56 million , F
. A

. S

. 9 ( Table 3 )

. 10 Japan is t he second largest impo rter of U.S. mandarin varieties

– its share substantiall y increased in 2011 to 36 percent , compared to the previous y ear’s 20 percent

. Canada consistentl y h as been the largest im porter of U.S. mandarins , with annual imports averag ing 20,000 MT
. **Table 3**  **. U.S.**  **Exports of Mandarin**  **Varieties ,**  **a Fresh or Dried (HTS 080520)**  **, Calendar Y**  **ear 2008**  **- 2012 (1,000**  **MT )**  2008 2009 2010 2011 2012 World Total b 30.8 30 .2 33 .9 52 .6 36 .5 Japan 4.4 6 .8 6 .9 19.0 12 .6 Market share: 14% 22% 20% 36% 35% Canada 18 .9 18 .5 22 .8 22 .8 17 .2 Netherlands 2.7 1 .1 1 .2 4.9 3 .1 Australia 2.0 2 .0 0.5 2 .4 1 .1 South Korea 0.7 0.2

- - 0.5 All other 2.1 1
. 6 2 .5 3 .5 2.0 Source: Global Trade Atlas, U.S. Department of Commerce

– Bureau of Census

. a M andarins (i ncluding tangerines and satsuma ), clementine, Wilkings and similar citrus hybrids

. b E xport data in Table 3 are based on calendar years and includes dried citrus

. These data therefore do not correspond to export data reported in Table 1 that are based on crop season year and only include fresh mandarin varieties

. U.S. imports of mandarin varieties average d 142,000 MT per ye ar between 2010 and 2012 , valued at $178 million (C.V.)

. 11 Principal sources were Chile, Spain, Peru and Morocco ( Table 4 )

. Chile has swiftly displaced Spain as th e dominant supplier of mandarin varieties , with

9 Free Along Ship Export Value

– The value of exports at port of export, excluding the costs of loading, freight, insurance and other transportation charges incurred beyond the port of exportation. 10 See note b in Table 3. 11 Custom Import Value

– The price actually paid, excluding import duties, freight, insurance, and other charges.5

exports to the United States increasing from 16,300 MT in 2008, to 53,500 MT in 2012. 12 Imports from Pe ru also sharply increased , from 8,800 MT in 2008 to 17,200 MT in 2012. Mandarin i mports from Japan , however, did not materialize between 2010 and 2012

. The Un ited States imported 114 MT of unshu oranges from Japan in 2009 valued at about $143,000. Prior to 2009 , the United States imported on average about 200 MT of unshu oranges annually from Japan , valued at about $340,000 , only during the months of November and December. **Table 4**  **. U.S.**  **Imports of**  **Mandarin Varieties**  **, a**  **Fresh or Dried (HTS 080520), Calendar**  **Y ear**  **2008 -**  **2012 (1,000 MT**  **)** Metric Ton 2008 2009 2010 2011 2012 World 110.8 120.8 141.0 140.8 143.9 Japan 0.07 0.11

- - - Market share: 0.06% 0.09% 0% 0% 0% Chile 16.3 27.3 35.5 43.3 53.5 Spain 53.6 48.3 53.5 54.0 44.2 Peru 8.8 10.6 14.6 14.3 17.2 Morocco 14.6 15.6 20.3 16.2 14.3 All other 17.5 18.8 17.1 13.0 14.7 Source: Global Trade Atlas, U.S. Department of Commerce

– Bureau of Census

. a M andarins (including tangerines and satsuma), clementine, Wilkings and similar citrus hybrids. b Im port data in Table 4 are based on calendar years and includes dried citrus . These data therefore do not correspond to export data reported in Table 1 that are based o n crop season year and only include fresh mandarin varieties

. **Japanese p roduction**  **and trade of unshu orange s**  Japan has a long history

of unshu orange production dating back about 500 y ears . In recent decades, production and acreage have contracted to abo ut 900,000 MT and 110,000 acres in 2012, from its peak of 3.6 million MT and 390,000 acres in 1972

– a 75 percent reduction in 40 y ears ( Figure **1** )

. 13 Nonetheless, unshu orange s still accounted for 27 percent, b y value, of all fruit produced in Japan in 2010 , the largest single share

. 14 Many cultivars of unshu orange exist in Japan , which are ty

pically classified according to the time of harvest

.
12 In 2012, Spai n still kept the top place in terms of import value ($65 million), compared to Chile ($50 million).6

**Figure 1**  **. Japan:**  **Unshu Orange Production and Acreage: 1973 -**  **2012**

Source: USDA

- Foreign Agricultural Service (FAS) GAIN Report “Japan, Citrus Annual” December 2012, Japanese Ministry of Agriculture, Forestry and Fisheries (MAFF) , Fruits Production and Shipment Statistics Japan ’s unshu orange exports are relativel y small ( Table 5 )

. In 2012, Japan exported 2,424 MT of unshu oranges , valued at $ 4.5 million (F

. O

. B
. ) , 15 with Canada by far the largest importer

. No unshu orange s were exported to the United States in 2011 or 2012 ; however, Japan exported about 100 MT per year to the United States between 2008 and 2010. 16 The 2012 average price world wide was $1.87 per kilogram (KG) . The unit value of exports to the United States closely aligns with the world average

.

13 Unshu orange originated in Kagoshima Prefecture, formerly called Satsuma. It is said that seeds came from Zhejiang Province in China approximately 500 ye ars ago, from which chance seedlings grew

. 14 Ministry of Agriculture, Forestry and Fisheries (MAFF) Agricultural Statistics http://www.maff.go.jp/j/tokei/kouhyou /sakumotu/sakkyou_kazyu/index.html#y 15 Free On Board

– A standard reference to the price of merchandise on the border or at a national port. In F.O.B. contracts, the seller is obliged to have the goods packaged and ready for shipment at the place agreed upon, and purchaser agrees to cover all ground transport costs and to assure all risks in the exporting country, together w ith subsequent transport costs and expenses incurred in loading the goods onto the chosen means of transport. 16 We note that there ar e differences in reporting periods and other discrepancies between the trade data for the United States and Japan. 0 50 100 150 200 250 300 350 400 450

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,00019731975197719791981198319851987198919911993199519971999200120032005200720092011**T h** **o u** **s a** **n d** **A c** **r e** **s T** **h o** **u s** **a n** **d M** **T** 

## Japanese Unshu Or **ange Pr**  **oduction and Acreage**

Production ('000 MT) Acreage ('000 acre)7

**Table 5**  **. Japan**  **: Exports of Mandarin**  **Varieties , Fresh or Dried (HTS 080520),**  **Calendar Y**  **ear 2008**  **- 2012 (**  **1,000 MT**  **)** 2008 2009 2010 2011 2012 World 3.4 2.6 2.2 2.6 2.4 Unit Value/KG $1.38 $1.48 $1.82 $1.85 $1.87 United States b 0.1 0.1 0. 1

- - Market share: 3% 4% 2% 0% 0% Unit Value/KG $1.48 $1.40 $1.82

- - Canada 2.9 2.1 1.6 2.2 2.0 Hong Kong 0.2 0.2 0.2 0.1 0.2 Taiwan 0.1 0.1 0.2 0.1 0.1 Singapore 0 .0 0 .1 0.1 0.1 0.1 All other 0 .0 0.1 0.1 0.1 0.1 Source: Global Trade Atlas, Japan Customs

. a Primarily consisted by unshu oranges

. b The e xport quantities to the United States shown in this table are not equal to the U.S. import quantities from Japan shown in Table 4 due to differences in reporting periods and other discrepancies

. Exports of unshu orange from Japan to the United States have been highl y s easonal , occurring onl y during the months of November and December ( Figure 2 ). These unshu oranges were t ypically sold at premium prices in ethnic specialt y stores and through small

- package direct deliver y to customers who celebrated the New Year’s holiday s . 17 **Figure 2**  **. Monthly Imports of Unshu Orange from Japan to U.S.: Oct. 2004** 

**– Sept. 2009**  **(1,000 MT**  **)**

Source: Global Trade Atlas, U.S. Department of Commerce

– Bureau of Census

17 We do not have the information on retail prices for unshu oranges imported from Japan. USDA

- Agricultural Marketing Service Custom Average P rice shows that the terminal market prices for Satsuma oranges averaged about $2.09/KG from California and Florida, and $2.61/KG from Peru in 2012, suggesting imports are generally sold with premiums. No other imported prices of mandarin varieties are avai lable at either terminal market or retail levels. - 50 100 150 200**T h** **o u** **s a** **n d** **M T**  

### Monthly Imports **of Unshu Or ange from Japan**  **to U.S.**

**Oct 2004 -**  **Sept 2009 (1,000 metric**  **tons)**8

Japan is a net importer of mandarin varieties

. 18 In 2012, Japan imported 20,309 MT of mandarin varieties , valued at $ 31 million ( C.I .F.) ( Table 6 )

. The United States has consistently supplied the largest share , account ing for 82 percent in 2012 , valued at $22 million ( C.I .F. ). U nit value s for mandarin varieties imported from the United States have been consistently lower than the average unit values of imports from all sources , for example, by 21 cents/ KG in 20 12 and by 8 cents/ KG in 20 08
. **Table 6**  **. Japan**  **: Imports**  **of Mandarin**  **Varieties ,**  **Fresh or Dried (HTS 080520), Calendar**  **Y ear**  **2008 -**  **2012 ( 1, 000**  **MT )**  2008 2009 2010 2011 2012 World 10.2 9.0 10.9 21.3 20.3 Unit Value/KG $1.29 $1.49 $1.46 $1.55 $1.53 United States a 7.8 7.1 9.2 17.6 16.6 Market share 76% 79% 84% 83% 82% Unit Value/KG $1.21 $1.39 $1.31 $1.43 $1.32 Australia 1.5 1.2 1.0 2.3 2.1 New Zealand 0.4 0.5 0.3 0.9 1.0 Chile 0.2 0.2 0.3 0.5 0.3 All other 0. 4 0.1 0.1 0.1 0.3 Source: Global Trade Atlas, Japan Customs

. a Q uantities imported from the United States are not equal to U.S. export quan tities to Japan shown in Table 3 due to differences in reporting periods and other discrepancies

. .
**Relations of m andarin**  **production and trade between**  **the United States and Jap an**  As discussed previousl y , annual U.S. production of mandarin varieties doubled over six ye ar s, to 0.5 million MT in 201 1 /1 2 . With steady net imports of about 0.1 million MT annually , U.S. per capita consumption of mandarin varieties increased to 4 .1 pounds in 2011/12 , from 2.6 pounds in 200 6/0 7
. Per capita consumption in Japan , 13.4 pounds in 2011, is still much higher than in the United States

. 19 However , it has decline d almost 80 percent from its peak of 60

18 Mainly mandarin varieties other than unshu oranges

. 19 Per capita consumption of unshu orange in Japan was 10.1 pounds in 2011.9

pounds in 1972
. 20 As shown in Figure 3 , the decrease in unshu orange production in Japan and the increas e in U.S. production of mandarin varieties are resulting in their respective production trend lines to converge . **Figure 3**  **. Unshu Orange Production in Japan and**  **Mandarin and**  **Mandarin Hybrid**  **Production in the United States: 1981**

**– 2012 (in thousand metric**  **tons )** 

Source s : USDA

- ERS Fruit and Tree Nut Yearbook 2012 Ministry of Agriculture, Forestry and Fisheries (MAFF), Japan , Fruits Production and Shipment Statistics Korea and Japan have been the principal suppliers of unshu oranges to the United States. I mports of unshu oranges from Korea averaged about 650 MT ann ually between 1995 and 2002 , p rior to administrative suspension of unshu orange imports from Korea to the United States

. Following removal of the import suspension in 2010, imports of unshu orange from Korea totaled 445 MT in 2011 (valued at $0.6 million) and 447 MT in 2012 (valued at $1 million)

. The Pathway

- initiated Risk Analy sis for this proposed rule assumes the upper range of annual unshu orange imports from Japan would be about 500 MT
. U nshu orange import s from

20 MAFF statistics. Per capita consumption of unshu orange was 42 pounds in 19 72 and declined to 10 pounds in 2011. 0 500 1,000 1,500 2,000 2,500 3,000 3,50019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012



### Unshu Or **ange Production in Japan**  **and Mandarin and**  **Mandarin Hybrid Production in**  **the United States** 

**(in Thousand Metric T**

**ons)**

Japan: Unshu Orange U.S.: Tangerine Varieties and Hybrids10

Japan to the U nited States had been historicall y lower than imports from Korea; imports from Japan averaged about 200 MT between 1996 and 2010 with an average value of $ 0.34 million ( Figure 4 ) . Considering this historical information , an increase of 500 MT may be a challenge

. Even if the imports from Japan were to reach 500 MT , g iven the fact that fresh unshu orange s are predominantly

supplied by

Korea and Japan, we expect any product displacement that may occur because of the proposed rule would be largel y borne by Korea n suppliers

. **Figure 4**  **. Mandarin Exports by U.S.**  **to Japan ,**  **Japan to U.S.**  **and Korea to U.S. : 1994**  **- 2012** 

Source: Global Trade Atlas, U.S. Department of Commerce

– Bureau of Census 

### Potential Impact on Small Entities The United States is not a commercial producer of unshu orange s ( Citrus reticulata Blanco var. Unshu) but produces other mandarin varieties of C itrus reticulata in Alabama, Arizona, California, Florida, Hawaii, L ouisiana and Texas

. As a result, the proposed rule may affect domestic mandarin , and other mandarin variety growers , and wholesalers and distributors of these mandarin varieties , to the ex tent that unshu oranges can substitute for the other mandarin

- 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000**M e** **t r** **i c** **T o** **n** 

### Mandarin **Exports by U.S., Japan and South Korea** 

**1994 -**  **2012 (Metric T**

**on)** U.S. Export to Japan Japan Export to U.S. Korea export to U.S.11

varieties

. Nonetheless, given the relativel y low level of unshu orange imports expected from Japan, this proposed rule is likely to have minimal economic impacts on small U.S. entities. Following the Small Business Administration (SBA) guidelines, the entities potentially affected b y the proposed rule are classified within the following industries: Citrus (except Orange) Groves (NA IC S 1113 20 ) , and Fresh Fruit and Vegetable Merchant Wholes alers (NAICS 424480). 21 , 22 E stablishments classified within Citrus (except Orange) Groves are considered small by SBA standards if annual sales are not more than $750,000. APHI S does not have information on the size distribution of non - orange citrus produce rs, but according to the 2007 Census of Agriculture there were 9,659 other orange growers , a category that include s all orange growers except those producing Valencia oranges, as well as 1,976 tangerine growers . Average annual sales per “other orange” grow er is estimated to have been about $ 121,715 in 2007 , 23 well below the SBA small

- entity threshold of $750,000

. We infer that most if not all U.S. “other orange ” growers , including tangerine growers, are small entities. Establishments classified within Fresh Fruit and Vegetable Merchant Wholesalers are considered small b y the SBA standards if they emp loy not more than 100 persons. According to the 2007 Survey

of Bus iness Owners, 97 percent of the 5,074 establishments in this category employ ed fewer than 100 people. 24

21 NAICS refers North American Industry Classification System. 22 U.S. Small Business Administration, Table of Small Business Size Standards http://www.sba.gov/content/table

sm all

- business

- size

- standards 23 Average sales per entity is based on the number of non

- Valencia orange grow ers recorded in the 2007 Agricultural Census, i.e., 9,659 operations, and the total value of fresh and processed n on - Valencia oranges reported in the USDA

- NASS Citrus fruits 200 8 Summary, i.e., $1.2 billion. http://usda01.library.cornell.edu/usda/nass/CitrFrui//2000s/2008/CitrFrui

- 09

- 25

- 2008.pdf 24 U.S. Census Bureau, Survey of Business Owners, 2007 Survey Results. http://www.census.gov/econ/sbo/07menu.html12

Clearly , the industries that could be affected by the proposed rule are overwhelmingl y composed of small entities. However, as described, we expect an y effects to be insignificant. Even if imports from Japan were to reach 500 MT , it is likely tha t an y product displacement that would occur would be largel y borne b y Korean suppliers. The extent to which U.S. producers of other mandarin varieties may be affected would depend upon the quantit y i mported, the degree to which consumers may

substitute uns hu oranges for the other mandarin varieties, and their price competitiveness. The Japanese unshu orange share of the U.S. market for mandarin varieties is expected to be negligible. The 500 MT would be equivalent to less than one

- tenth of one percent of t he U.S. supply of mandarin varieties in 2012 . Past imports , which garnered a premium price, served a specialty niche market during a limited time of the y ear prior to peak harvesting and marketing activities of U.S. mandarin varieties . Collectively , these conditions lead to the conclusion that any effect of the proposed rule for U.S. producers of other mandarin varieties would be small. Under these circumstances, the proposed rule , if promulgated, will not have a significant economic impact on a substantial number of small entities.