### United States Department of Agriculture

Animal and Plant Health Inspection Service

November 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

- 00 85 RIN 0579

- AD87

Importation of Two H ybrids of Unshu Oranges from the Republic of Korea into the Continental United States, 7 CFR 319.28

Policy & Program Development
Policy Analysis & Development

### Summary

This analysis provides the basis for certification that the proposed rule , if promulgated,

would not have a significant economic impact on a substantial number of small entities.

Currently Unshu o range may be imported from the Republic of Korea into the c ontinental

United States as described in 7 CFR 319.28(c)

. Only one species of Unshu o range, Citrus

reticulata Blanco var. unshu , Swingle [ Citrus unshiu Marcovitch, Tanaka]

, is allowed entry

. In

response to a market access request from the government of the Republic of Korea

, w e are

propos ing to amend the regulations to allow the importation of commercial consignments of two

additional Unshu orange hybrids, Shiranuhi [( C

. reticulata ssp. unshiu x ( C . x sinensis )) x C

.

reticulata ] and Setoka [( C

. reticulata ssp. unshiu x ( C.x si nensis )) x C

. reticulata ] x C. reticulata ],

utilizing the same import requi rements currently listed in § 319 .28 (c) . We would also modify

those r equirements by explicitly limiting shipments to commercial consignments

.

E asy

- peel, sweet, juicy, seedless mandarin varieties

, including U nshu orange s , are
gaining popularity in the United States. The United States does not commercially produce U nshu

oranges, but does produce various similar mandarin varieties

. U.S. p roduction of these mandarin

varieties doubled in six years

, from a quarter million metric tons (MT) in 2007
, to almost half a

million MT in 2012. P roduction value s of mandarin varieties mo re 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 year , 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 year

.

iKorea and Japan are the principal exp orters of Unshu oranges ( Citrus reticulata Blanco

var

. ) to the United States. In Korea, almost all U nshu oranges are produced on the southern

island of Jeju

. 1 O ver 99 percent of Unshu oranges are consumed domestically , and only about

0.6 percent of Korea’s Unshu orange, totaling 3,611 MT valued at $4.8 million, were exported in

2012. The United Kingdom was the main destination of Korean Unshu oranges; t he United

States was the fourth largest importer of Korean Unshu oranges in 2012, totaling 743 MT, which

were typically sold at a premi um in ethnic specialty stores.

The Pest Risk Analysis for this proposed rule assumes the upper range of annual Unshu

orange imports from Korea to the United States to be about 2,000 MT . P rior to administrative

suspension of U nshu orange imports from Korea to the United States in 2003, i mports of U nshu

oranges from Korea to the United States averaged about 650 MT annually between 1995 and

2002

. Following the removal of the import suspension in 2010, imports of U nshu orange from

Korea totaled 412 MT in 2011 (valued at $0.5 million) and 743 MT in 2012 (valued at $0.9

million). Given these import levels and Korea’s limited supply capacity and relatively stable

domestic demand

, projected exports of 2,000 MT may be high

. Even if impo rts from Korea were

to reach 2,000 MT

, Korean U nshu orange share of the U.S. market for mandarin varieties is

expected to remain negligible (about 1.4 percent of U.S. imports and 0.3 percent of U.S.

domestic supply of all mandarin varieties based on the U. S. production and trade data for 2010

-
2012)

. In addition, given the fact that fresh Unshu orange imports by the United States are

predominantly supplied by Japan and Korea

, we expect any product displacement would be

largely borne by Japanese U nshu orange imports

.

T hese 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

1 Jeju was fo rmerly translated as Cheju.

iirule , if promulgated, would not have a significant economic impac t on a substantial number of

small entities.

iii

### Table of Contents Summary

................................ ................................ ................................ .............................. i

Introduction

................................ ................................ ................................ ......................... 1

U.S. production and trade of mandarin varieties

................................ ........................ 2

Korean production and trade of Unshu oranges

................................ ......................... 5

Relations of mandarin production and trade between the United St ates and Korea

... 8

Potential Impact on Small Entities

................................ ................................ .................... 10

iv

### 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, would not have

a significant economic impact on a substantial number of small entities.

Cu rrently U nshu o range may be imported into the continental United States from t he

Republic of Korea (Korea) as described in 7 CFR 319.28(c)

. O nly one species of U nshu o range,

Citrus reticulata Blanco var. unsh i u , Swingle [ Citrus unshiu Marcovitch, Tanaka]

, is allowed

entry

. In response to a market access request from the government of Korea to expand their

authoriz ed Unshu orange exports to include two additional hybrids , we are propos ing to amend

the regulations to allow the importation of commercial consignments of the Shiranuhi hybrid [( C

.

reticulata ssp. unshiu x ( C . x sinensis )) x C

. reticulata ] and the Setoka hybrid [( C

. reticulata ssp.

unshiu x ( C.x sinensis )) x C

. reticulata ] x C. reticulata], under the import requi rements listed in §

319 .28( c)

. We would also modify those requirements by explicitly limiting shipments to

commercial consignments. 2

T he U.S. citrus industry does not produce Unshu oranges, bu t does produce many

substitute mandarin varieties

. 3 W e first present information on the production and worldwide

trade of mandarin varieties by the United States and by Korea
, 4 followed by information specific

on the U.S. market for U nshu orange imports . We then address like ly effects of the proposed rule

for small entities.

2 The Pest Risk Assessment (PRA) identified two pests: Xanthomonas citri subsp. citri and Elsinoë australis (the causal agents of citrus canker and sweet orange scab

, respectively), as quarantine pests associated with the two Unshu orange hybrids . APHIS determined that the requirements specified in 7 CFR part 305 for phytosanitary treatments and 7 CFR 319.28(c) for importation would provide an appropriate level of phytosanitary protection against these p ests. 3 Cindy Fake, UC Davis Cooperative Extension, “A Mandarin by Any Other Name” 2004, http://www.mountainmandarins.com/documents/10Oct2005

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

. 1U.S. p roduction and trade of mandarin varieties

E asy

- peel, sweet, juicy, seedless mandarin varieties are gaining popularity in the United

States. U.S. p roduction of mandarin varieties doubled in six years, from 245 ,000 metric tons

(MT) in 2006/07

, to 486 ,000 MT in 2011/12 ( Table 1 )

. 5 A ctive harvesting and marketing dates

for t angerines are between January 1 and March 31 in California and between November 15 and

March 15 in Florida. 6 Imports 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

- year period from 2006/07

to 2011/12

. U.S. net import s (imports minus exports) averaged 98,000 MT o ver this same 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 )

.

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 Se ason begins in November of first year shown

.

5 Mandarin variety season begins in November of first year shown.
6 USDA

- NASS “ Fruits and Tree Nuts: Blooming, Harvesting and Marketing Dates” December 2006.

2c 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 pe rcent ) from $ 141 milli 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.
b Consists of three States: California, Florida and Arizona. In 2011/12, California accounted for the largest bearing

area (38,000 acres), followed 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 was 95 pounds.

In 2012, the United State s exported 36,5 13 MT of mandarin va rieties , valued at $56

million

, F

. A

. S

. 7 ( Table 3 )

. 8 Canada consistently has been the largest im porter of U.S. mandarins,

with annual imports averaging 20,000 MT valued $30 million. T he United States exported 475

MT of mandarin varieties to Korea, valued at $0.6 million.

7 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 o f exportation.
8 See note b in Table 3.

3Table 3

. U.S. Exports of Mandarin Varieties , a Fresh or Dried (HTS 080520) , Calendar Y ear 2008

- 2012 ( metric tons ) 2008 2009 2010 2011 2012 World Total b 30,810 30,166 33,895 52,597 36,513 Canada 18,850 18,500 22,828 22,782 17,180 Japan 4,442 6,778 6,895 18,956 12,649 Netherlands 2,726 1,128 1,152 4,878 3,125 Australia 1,996 2,027 507 2,438 1,122 South Korea 732 166 6

- 475 Market share 2.4% 0.6% 0.0%

- 1.3% All other 2,064 1,568 2,508 3,542 1,961 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 year between 2010 and

2012
, valued at $178 million (C.V.)

. 9 Principal sources were Chile, Spain, Peru and Morocco

( Table 4 )

. Chile has swiftly displaced Spain as th e dominant sup plier of mandarin varieties

, with

exports to the United States increasing from 16,300 MT in 2008, to 53,500 MT in 2012. 10

Imports from Peru also sharply increased

, from 8,800 M T in 2008 to 17,200 MT in 2012. Korea

was t he ninth largest exporter of mandarin varieties to the United States in 2012 ; the United

States imported 743 MT U nshu oranges from Korea , valued at about $0.9 million

. Korea’s share

of U nshu orange imports by the United States was only 0.5% in 2012

. 11

9 Custom Import Value

– The price actually paid , excluding import duties, freight, insurance, and other charges.
10 In 2012, Spain still kept the top place in terms of import value ($65 million), compared to Chile ($ 50 million).
11 The United States began importing U nshu oranges from Korea in 1995 but the importation was suspended in 2002 due to interceptions of citrus canker during pre

- clearance inspections and subsequent detections of citrus canker at U.S. ports of entry. In 2007, in response to a request from Korea, APHIS allowed the importation of U nshu oranges produced o n the Jeju Island (form er ly translated as Cheju) to resume, but only to the State of Alaska, then in 2010, APHIS allowed importation of U nshu oranges into the continental United States.

4Table 4

. U.S. Im ports of Mandarin Varieties , a Fresh or Dried (HTS 080520), Calendar Y ear 2008

- 2012 ( metric tons ) 2008 2009 2010 2011 2012 World Total b 110,767 120,803 141,016 140,805 143,936 Chile 16,291 27,335 35,478 43,285 53,480 Spain 53,559 48,335 53,541 54,031 44,202 Peru 8,753 10,634 14,649 14,264 17,239 Morocco 14,580 15,607 20,293 16,206 14,290 South Africa 4,763 5,969 7,780 4,476 6,968 Mexico 7,726 5,797 4,104 3,640 2,340 Israel 399 1,244 1,631 1,137 1,978 Australia 3,752 4,325 3,072 2,167 1,852 South Korea 18

- - 412 743 All other 944 1,556 469 1,598 1,586 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 on crop season year and only include fresh mandarin varieties

.

Korean p roduction and trade of Unshu orange s
Korea produces few orange varieties such as navel and Valencia, but harvests a large

crop of other citrus, mainly Unshu oranges , almost all from the southern island of J eju. 12
, 13 In

the 2011/2012 m arketing y ear ( MY )
, U nshu orange production was fore c ast at 580,000 MT

. 14
, 15

Unshu orange s were fi rst introduced in to Jeju Province in 1911 from Japan, and their

production saw significant growth in the 1970s and 1980s . In recent years, production volumes

have fluctuat ed at around 600 ,000 MT , while plan ted acreage has shown a gradual decline

towards 50,000 acres ( Figure 1 )

.

12 USDA Economic Research Service, South Korea

– Fruits, Nuts, and Vegetables http://www.ers.usda.gov/topics/international

- markets

- trade/countries

- regions/south

- korea/specialty

- processed

product

- markets.aspx
13 Jeju Province is situated on Korea’s largest island of Jeju (or Jeju

- do), a size of 714 sq. miles with populati on of about 583,000 people in 2011.
14 USDA Foreign Agriculture Service, GAIN Report “Republic of Korea

– Citrus Annual” December 18, 2013. http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Citrus%20Annual_Seoul_Korea%20

- %20Republic%20of_12

- 18

- 2012.pdf
15 Ibid. “Korea’s citrus production is predominantly unshu oranges with an 85 percent share, followed by winter unshu and late season varieties.”

5Figure 1

. Korea : Unshu Orange Production and Acreage: 2003

- 2012

Source: USDA

- Foreign Agricultural Service (FAS) GAIN Report “ Korea

– Citrus Annual ” December 2012, Jeju Provincial Government & Korea Rural Economic Institute
One noticeable trend is that citrus production patterns in Jeju have been shifting gradually

from open

- field grown Unshu oranges to greenhouse facility production for the past 10 years, in

addition, organic Unshu orange production is increasing. With the help of the Free Trade

Agreement (FTA) transition fund, the Jeju government projects its acreage for winter Unshu and

late varieties to increase from 1,180 acres to 1,620 acres by 2014. 16

Kor ea’s Unshu orange exports have been relatively small

, but grew to 3,611 MT in 2012,

valued at $4.8 million ( Table 5 )

. Exports to the United Kingdom sharply increased in 2012, when

the United Kingdom became the largest import of Korean Unshu oranges , accounting for 42

percent of Korea’s exports (1,501 MT). After Canada and Russia, t he United States was the

fourth largest i mporter of Korean Unsh u oranges (477 MT) in 2012. 17 The average unit price

world wide was $1.33 per kilogram (KG) in 2012 . The unit prices of Unshu orange exports to the

United States are higher than the average price worldwide

. In the United States, t hese Unshu

16 Ibid.
17 The trade information are primarily based on MY2011/12 (Oct.11

- Sept.12) and do not equal to the data shown in Table 4. 44 46 48 50 52 54 56 58 60 62

0 100 200 300 400 500 600 700 800

2003 2005 2007 2009 2011Thousand AcresThousand MT 

## Korean Unshu Orange Production and Acreage

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

6oranges were typi cally sold at premium prices in ethnic grocery stores and through small

package direct delivery to customers for holidays

. 18

Table 5

. Korea : Exports of Mandarin Varieties , a Fresh or Dried (HTS 080520), Y ear 2008

- 2012 ( metric tons ) 2008 2009 2010 2011 2012 World Total 2,536 2,783 1,724 2,930 3,611 Unit Value/KG $ 0.78 $ 1.09 $ 0.99 $ 0.97 $ 1.33 United Kingdom 3 19 99 360 1,501 Canada 465 828 157 541 723 Russia 1,785 1,475 1,130 1,264 480 United States b 39 10 10 445 477 Unit Value/KG $ 0.98 $ 1.30 $ 1.34 $ 1.32 $ 2.00 Hong Kong 25 44 12 73 158 All other 219 408 315 247 272
Source: Korea Customs and Trade Development Institution , Global Trade Atlas

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 Korea shown in Table 4 due to differences in repor ting periods and other discrepancies

. Korean export data are based on exports for marketing year , for example MY 2010/11 (Oct.10

– Sept.11) and MY 2011/12 (Oct.11

– Sept. 12).

Korea ’s imports of mandarin varieties in recent years have been limited

. Trade data

indicate that Korea imported only one kilogram of mandarin varieties in 2012 , valued at $12, and

that was from the United States ( Table 6 )

.

Table 6

. Korea : Imports of Mandarin Varieties , Fresh or Dried (HTS 080520), Calendar Y ear 2008

- 2012 ( metric tons ) 2008 2009 2010 2011 2012 World Total 0.05 0.005 0 0.828 0.001 Unit Price/KG $ 1.46 $ 28.20

- $ 6.00 $ 12.00 United States a 0 0 0 0 0.001 Unit Price/KG

- - - - $ 12.00 Japan 0.05 0.005 0 0 0 Unit Price/KG $ 1.46 $ 28.20

- - - Taiwan 0 0 0 0.828 0 Unit Price/KG

- - - $ 6.00

- Source: Korea Customs and Trade Development Institution , Global Trade Atlas

18 We do not have the information on retail prices for Unshu oranges imported from Korea. USDA

- Agricultural Marketing Service Custom Average Price 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 at premium prices. No other imported prices of mandarin varieties are available at either terminal market or retail levels.

7a Q uantities imported from the United States are not equal to U.S. export quan tities to Korea 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 Korea

As discussed previously

, annual U.S. production of mandarin varieties doubled over six

year s, to 0.5 million MT in 201 1 /1 2 ( Table 1 ) . With steady net imports of about 0.1 million MT

annually

, U.S. per ca pita consumption of mandarin varieties increased to 4 .1 pounds in 2011/12

, from 2.6 pounds in 200 6/0 7

. Korea’s per capita consumption of domestically produced citrus

, 31

pounds in 2011, 19 is still much higher than that of the United States

. T o meet its domestic

demand for Unshu oranges with limited production capacity, most of domestic Unshu orange
supply (over 99 percent) is consumed domestic ally

. Korea’s relatively stable production and the

increas e in U.S. production are resulting in conver gence of their respective production trend lines

( Figure 2 )

. Figure 2

. Unshu Orange Production in Korea 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

, Jeju Provincial Government & Korea Rural Economic Institute, USDA

- FAS GAIN report “Korea Citrus Annual”

19 USDA Foreign Agriculture Service, GAIN Report “Republic of Korea

– Citrus Annual” December 18, 2013. 0 200 400 600 800 1,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 

## Unshu Orange Production in Korea and Mandarin Variety Production in the United States (thousand MT)

Korea Unshu Orange U.S.: Mandarin Varieties and Hybrids

8Korea and Japan are the principal suppliers of Unshu oranges to the United States. The

Pest Risk Analysis for this proposed rule assumes the upper range of annual Unshu orange
imports from Korea would be about 2,0 00 MT (about 1.4 percent of U.S. imports and 0.3 percent

of U.S. domestic supply of all mandarin varieties based on the U.S. production and trade data for

2010

- 2012)

. P rior to administrative suspension of Unshu orange imports from Korea to the

United States

, i mports of Unshu oranges from Korea to the United States averaged about 650

MT annually between 1995 and 2002

. Following removal of the import suspension in 2010,

imports of Unshu orange from Korea totaled 412 MT in 2011 (valued at $0.5 million) and 743

MT in 2012 (valued at $ 0.9 million) ( Table 4 )

. Given these import levels and Korea’s limited

supply capacity and relatively stable domestic demand for Unshu oranges , projected exports to

the United States of 2,0 00 MT may be a challenge ( Figure 3 )

. Even if the imports from Korea

were to reach 2,0 00 MT
, g iven the fact that fresh Unshu orange import s by the United States are
predominantly supplied by Japan and Korea
, we expect any product displacement that may occur
because of the proposed rule would be largely borne by Japanese suppliers

. Figure 3

. Mandarin Exports by U.S. to Korea , Korea to U.S. and Japan to U.S. : 1994

- 2012

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

– Bureau of Census - 2,000 4,000 6,000 8,000 10,000 12,000 14,000Metric Ton 

### Mandarin Exports by U.S., South Korea, and Japan 1994

- 2012 (Metric Ton)

U.S. Export to Korea Japan Export to U.S. Korea Export to U.S.

9

### Potential Impact on Small Entities

The United States is not a commercial producer of Unshu orange s ( Citrus reticulata

Blanco var. unshiu ) but produ ces other mandarin varieties of Citrus reticulata in Alabama,

Arizona, California, Florida, Hawaii, Louisiana and Texas

. As a result, the proposed rule may

affect domestic mandarin variety growers

, wholesalers and distributors to the extent that the

Unshu orange i s a substitute for the other mandarin varieties

. Nonetheless, given the relatively

low level of Unshu orange imports expected from Korea , this proposed rule is likely to have

minimal economic impacts on small U.S. entities.

Following the Small Bus iness Administration (SBA) guidelines, the entities potentially

affected by the proposed rule are classified within the following industries: Citrus (except

Orange) Groves (NAICS 1113 20 )
, and Fresh Fruit and Vegetable Merchant Wholesalers

(NAICS 424480). 20
, 21

E stablishments classified within Citrus (except Orange) Groves are considered small by

SBA standards if annual sales are not more than $750,000. APHIS does not have information on

the size distribution of non

- orange citrus producers, 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” grower i s estimated to have been about $ 121,715 in 2007

, 22 well below

20 NAICS refers to the North American Industry C lassification System.
21 U.S. Small Business Administration, Table of Small Business Size Standards http://www.sba.gov/content/table

small

- business

- size

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

- Valencia orange growers recorded in the 2007 Agricultural Census, i.e., 9,659 operations, and the total value of fresh and processed non

- 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

10the 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 Fru it and Vegetable Merchant Wholesalers are

considered small by 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

employed fewer than 100 peopl e. 23

Clearly, the industries that could be affected by the proposed rule are overwhelmingly

composed of small entities. However, we expect any effects on U.S. small entities of allowing

importation of the two additional Korean Unshu orange hybrids to be ins ignificant. 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

. T he Korean Unshu orange share of the U.S.

market for mandarin varieti es is expected to remain negligible, since t he highest import target of

2,000 MT would be equivalent to less than one percent of the U.S. supply of mandarin varieties

.

Even if imports from Korea were to reach 2,0 00 MT
, it is likely that any product displacement

that would occur would be largely borne by Japanese Unshu orange imports. T hese 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.

23 U.S. Census Bureau, Survey of Business Owners, 2007 Survey Results. http://www.census. gov/econ/sbo/07menu.html

11