### United States

Department of Agriculture Anim al and Plant Health Inspection Service July 2012 **Analysis in Support of Certification that the** 

**Rule will not have a Significant Economic Impact on a Substantial Number of Small**  **Entities**

**Final Rule**  **2011 -**  **0028 RIN 0579**  **- AD61**  **Importation of Fresh Bananas from the Philippines into the Continental United**  **States**

Policy & Program Development Policy Analysis & Developmenti



### Summary This analy sis examines impacts for U.S. small entities of a rule that w ill allow fresh banana imports from t he Philippines into the continental United States

. Commercial production of bananas in the United States takes place in Hawaii, where most if not all of the banana farms are small entities. These producer s will be little affected b y the final rule given the large quantity of bananas alread y imported by the United States and the relativel y small quantity expected to be imported from the Philippines. Bananas from the Philippines will not be allowed entry in to Hawaii. In 2009, Hawaii’s banana harvest totaled about 8,392 metric tons (MT), compared to U.S. imports of about 3.6 million MT. The volume of bananas expected to be imported from the Philippines is 100 containers per ye ar at most, or approximately 1 ,8 14 MT per y ear, an amount equivalent to about 0.05 percent of U.S. imports. The United States is clearly a minor producer but a major importer of bananas. Compared to the volume of current imports, the quantity of bananas expected to be imported from th e Philippines is negligible. In addition, bananas from the Philippines will not be allowed entry into Hawaii. For these reasons, any impact of the rule for U.S. banana producers in Hawaii will be small. T he A PHIS A dministrator has determined that this action will not have a significant economic impact on a substantial number of small entitiesii



### Introduction This analy sis provides the basis, as required by the Regulatory

Flexibility

Act, for certification by

the APHIS Administrato r that the rule will not have a significant economic impact on a substantial number of small entities. The anal ys is examines impacts for U.S. small entities of a rule that w ill allow fresh banana imports from the Philippines into the continental United St ates. The rule will amend 7 CFR 319.5, and is part of a continuing program to allow the importation of foreign agricultural products that APHI S has determined are without significant risk of introducing exotic plant pests into the United States. The Reg ulatory

Flexibility

Act requires agencies to evaluate potential effects of their proposed and final rules on small businesses, small organizations and small governmental jurisdictions. Section 60 4 of the Act requires an agency to prepare a final regulator y flexibility anal ys is ( F RFA) that describes the expected impact of a final rule on small entities. I n place of the F RFA, 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 analy sis provides factual basis for certification of this rule. 

### Potential Impact on Small Entities U.S. commercial production of bananas takes place in Hawaii. In 2009, that State’s banana harvest totaled about 8,392 metric tons (MT), harvested on 2 40 farms. 1 A banana farm is considered to be small according to the Small Business Administration’s standard for Other Noncitrus Fruit Farming (North American Industry Classification S ys tem category 111339) if its

1 Haw aii Farm Facts, May 2010. http://www.nass.usda.gov/Statistics_by_State/Hawaii/Publications/Fruits_and_Nuts/annbanFF.pdf2

annual receipts are not more than $750,00 0. Average annual receipts for the Hawaiian producers in 2009 was about $42,400, indicating that most if not all of these farms are small entities. Banana farms in Hawaii are small, but they will be little affected b y the final rule, given the very larg e quantit y of bananas alread y imported by the United States and the relativel y insignificant quantit y expected to be imported from the Philippines. Moreover, bananas from the Philippines will only

be allowed entry

into the continental United States. The i nternational banana market is highl y regional, and the United States imports bananas from Central America, South America and the Caribbean. 2 In 2009, the United States imported 3.6 million MT of fresh bananas, with Guatemala, Ecuador, and Costa Rica, resp ectivel y, the top three sources. 3 Similarly , banana exports by the Philippines are principally to Asian markets, with Japan, Iran, China, and Korea its major customers. This action will allow the importation of fresh bananas b y the United States from the Eastern Hemisphere for the first time. Banana imports from the Philippines will compete against existing U.S. banana imports from Latin America and the Caribbean . The volume of bananas expected to be imported from the Philippines is 100 containers per ye ar at most, or approximately 1 ,814 MT annually . This quantity is equivalent to about 0.05 percent of U.S. imports. In sum, the United States is a minor producer but a major importer of bananas. Compared to the volume of current imports, the quantity of bananas expected to be imported from the Philippines is negligible. Moreover, bananas from the Philippines will be allowed only into the continental United States, not into Hawaii. For these reasons, an y i mpact of the rule for

2 http://www.unctad.org/infocomm/anglais/banana/market.htm 3 Haw aii Farm Facts, May 2010. http://www.nass.usda.gov/Statistics_by_State/Hawaii/Publications/Fruits_and_Nuts/annbanFF.pdf3

U.S. banana producers in H awaii will be small. T he APHI S Administrator has determined that this action will not have a significant economic impact on a substantial number of small entities.