### United States

Department of Agriculture

Animal and Plant Health Inspection Service

June 2010 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

– 2010 - 0018

Importation of fresh baby k iwi fruit from Chile to the continental United States under a systems approach. 7 CFR 319.56

Policy & Program Development Policy Analysis & Developmenti

Summary The regulations in 7 CFR part 319 prohibit or restrict the importation into the United States of certain plants and plant products to prevent the introduction of plant pests and noxious weeds. The current regulations prohibit the importation of fresh baby kiwi fruit

- Actinid ia

arguta

- to the United States. The proposed rule would amend the regulations to allow the importation of fresh baby kiwi fruit from Chile into the continental United States under the conditions of a systems approach

. This proposed rule is in respons e to a request from the Chilean NPPO to import fresh baby kiwi fruit from Chile to the continental United States subject to a systems approach. The

use of a systems approach would give Chile an alternative to methyl bromide fumigation

treatment of baby ki wi intended for exportation to the United States

. APHIS does not expect the proposed rule to have a significant economic impact on a substantial number of small entities. The impact of fresh baby kiwi fruit imports from Chile is expected to be minimal f

or domestic producers due to timing differences in the U.S. pr oduction and importation period and the small quantity anticipated for importation

. Although most U.S. growers of baby kiwi fruit are likely to be small entities under the SBA’s standards, econ omic effects of the rule for these farms are not expected to differ from the effects for baby kiwi fruit growers generally. Therefore, we do not expect the proposed rule to have any significant impact on U.S. baby kiwi fruit growers regardless of the size of operation.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, would not have a significant economic impact on a subst antial number of small entities. The regulations in 7 CFR part 319 prohibit or restrict the importation into the United States of certain plants and plant products to prevent the introduction of plant pests and noxious weeds. The current regulations p rohibit the importation of fresh baby kiwi fruit

- Actinidia

arguta

– to the United States. On April 16, 2007, APHIS received a request from the National Plant Protection Organization (NPPO) of Chile, Servicio Agricola y Ganadero (SAG) to allow the impo rtation of fresh baby kiwi fruit to the continental United States subject to a systems approach. APHIS completed a pest risk analysis (PRA) to identify pests of quarantine significance that could follow the pathway of importation of fresh baby kiwi fruit into the continental United States. One quarantine significant pest identified in the PRA was Chilean false red mite ( Brevipalpus

chilensis ) , which could be introduced with consignme nts of fresh baby kiwi fruit in to the

continental United States. Based o n the PRA, APHIS completed a risk management document to identify phytosanitary measures that could be applied to mitigate the pest risk under a systems approach. The proposed risk mitigation measures for fresh baby kiwi fruit consists of NPPO registere d places of production with the fruit marked for traceback to the production site, pest management and certification by SAG for the low prevalence of Brevipalpus chilensis , SAG/APHIS joint inspection of the lots coming from certified sites of production, a nd phytosanitary certification with an Additional Declaration that “the fruit in the consignment was2

inspected and found free of Brevipalpus chilensis based on field and packinghouse inspections.” In addition, the commodity is subject to phytosanitary ins pection at the port of entry. 

### 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 baby kiwi fruit growers

classi fied within the following industry: Other Non

- citrus Fruit Farming (NAICS 111339).

Establishments classified within other non

- citrus fruit farming (NAICS 111339) are considered small by SBA standards if annual sales are not more than $750,000.

C urrentl y available information indicates that almost all U.S. growers of b aby k iwi fruit are small in size, by the standards of the SBA. This assumption is based on composite data for providers of the same or similar services in the United States. In 2007, ther e were 23,641 farms

in the “Other Non

- citrus Fruit Farming” category producing a total market value of about $2.6

billion . On average, each farm received $111, 663 in annual receipts, well below the SBA’s

small

- entity threshold for those farms, i.e. $750,0 00.

Table 1. Number of other non

- citrus fruit farms and per farm gross receipts, United States 2002 , 2007

Number of Farms Total Market value of agricultural

products sold ($ in billions) Per Farm average gross receipts 200 2 2 0 , 079 2. 1 1 03 ,6 32 200 7 2 3 , 641 2. 6 1 11 ,6 63 Source: Census of Agriculture, National Agricultural Statistics Service, USDA, Washington D.C.

The proposed rule would ame nd the current regulations to allow the importation of fresh baby kiwi fruit from Chile under a systems approach. The importation of baby kiwi fruit from Chile will benefit U.S. consumers and could potentially benefit U.S. producers as well. According t o the PRA , Chile harvests baby kiwi fruit between the months of January and May. In the United States baby kiwi fruit is harvested during September and October. After3

harvest baby kiwi fruit can only be stored for a maximum of two months

. Since the Chil ean baby kiwi fruit imports are expected to be during U.S. off season, the impact on U.S. producers will be minimal, if any. In addition, since U.S. and i mported Chilean baby kiwi fruit will be on the market at different times of the year, there should be no direct competition between the two. In fact, imports of baby kiwi fruit from Chile during the off season months of domestic production could essentially benefit U.S. producers in the long run. As consumers further develop the taste for fresh baby kiw i fruit due to availability through most of the year, U.S. producers are likely to benefit due to an increased demand and a more stable market.

The exact number of U.S. growers who currently produce baby k iwi fruit is unknown but

it is expected to be rel atively small

. 1 M ost producers are located in Oregon, Washington , and Pennsylvania. As of 2001, a total of 127 acres were estimated to be devoted to baby kiwi fruit production in the United States. Oregon is the largest producer in the U.S. with about 7 9 percent of the acreage followed by Washington (12 percent) and Pennsylvania (9 percent). Since actual per acre yield amounts for the United States were unavailable , the yield projections were developed using results based on a cultivar planting at the North Willamette

Resea rch and Extension Center , Oregon State University , Corvallis, OR

. Using the baby kiwi fruit yields of 6 to 14 tons pe r acre observed at the center, total U.S. production is estimated to be between 762 to 1,778 tons per year (Table 2)

.

1 The estimated total acreage of baby kiwi fruit (Actinidia arguta) is 127 acres. In comparison, as reported by the 2007 Cen sus of Agriculture fuzzy kiwi fruit (Actinidia deliciosa) was significantly larger, at 4,509 acres.4

Table 2. Estimated production of baby kiwi fruit in the U.S.

State Estimated

Acres Estimated yield per acre (tons) Estimated total production (tons)

Low High Midpoint Low High Midpoint Oregon 100 6 14 10 600 1,400 1,000 Pennsylvania 12 6 14 10 72 168 120 Washington 15 6 14 10 90 210 150 United States 127 6 14 10 762 1,778 1,270 Strik, B., and K. E. Hummer. 2006. 'Anananasnaya' hardy kiwifruit. Journal of American Pomological Society, 60(3):106

- 112.

Under the proposed rul e and according to the PRA, the quantity of fresh baby kiwi fruit that would be imported is estimated to be between 150 to 300 tons per year. Using the midpoint production estimate, this would amount to around 12 percent to 24 p ercent of total U.S. produc tion. Since small entities comprise a substantial number of the farms producing baby kiwi, they could potentially be affected. However, since Chilean baby kiwi will be imported during the off season months of U.S. production, the impact on the market and market prices is expected to be minimal

. In addition , because most domestic growers of baby kiwi fruit are diversified and also produce other berry varieties, any impact of imports on domestic producers would be mitigated since baby kiwi fruit account for only a portion of their overall income. The alternative would be to not allow the import of the commodity under the proposed systems approach, but this would not be consistent with APHIS’ obligation to consider alternative requests where less restrictiv e measures may be used to safely mitigate against quarantine pests of concern. Under the proposed rule the public will benefit from increased availability of fresh baby

kiwi fruit for most part of the year . We expect any negative impact on d omestic pro ducers to be minimal due to timing differences in the U.S. pr oduction and importation period and the small quantity anticipated for importation.5

Under these circumstances, the Administrator of the Animal and Plant Health Inspection

S ervice has determined that this action would not have a significant economic impact on a

substantial number of small entities.