United States 

Department of 

Agriculture

Animal and 

Plant Health 

Inspection 

Service

July 2014

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 2014-0041

RIN 0579-AE01

Importation of Oncidium spp. Plants in 

Growing Media from Taiwan (7 CFR 319.37)

Policy & Program Development

Policy Analysis & Development
i

Summary

APHIS is amending the regulations in 7 CFR 319.37-8(e), which restrict the importation 

of orchids of the genus Oncidium to those plants that are free of sand, soil, earth, and other 

growing media. The proposed rule would amend the regulations to include Oncidium spp. from 

Taiwan on the list of plants that may enter the United States established in approved growing 

media, subject to specified growing, inspection, and certification requirements. 

Eliminating the requirement that Oncidium spp. from Taiwan must be bare-rooted is 

expected to increase the number and quality of these plants imported by U.S. growers, who then 

finish the plants for the retail market. It is also expected to reduce the production time for 

growers. However, gains due to improved product quality and reduced production time are likely 

to lead to compensating price adjustments, assuming a competitive market.

With a shorter shelf life and slower production process, Oncidium spp. represent a 

relatively small portion of the orchid market and orchid trade, with a market share of between 15 

and 25 percent. While many of the entities that may be affected by the final rule, such as 

importers of orchids for the potted plant market, are small by SBA standards, we expect any 

impact to be minimal, given Oncidium spp. small share of the U.S. orchid market and their small 

share of total orchid imports from Taiwan. Allowing importation of Oncidium spp. from Taiwan 

in growing media could also lead to an expanded market for this genus, but any increase is likely

to be limited given the flower’s distinctively unusual appearance. The APHIS administrator has 

determined that this action, if promulgated, will not have a significant economic impact on a 

substantial number of small entities. 
ii

Table of Contents

Summary.............................................................................................................................. i

Introduction......................................................................................................................... 1

Potential Impact on Small Entities...................................................................................... 1
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.

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. The current 

regulations allow the importation of orchids from all countries of the world, but only under 

certain conditions, including the condition that some plants be free of sand, soil, earth, and other 

growing media. Such plants are generally imported bare-rooted into the United States, and are 

rooted and potted for sale by U.S. nurseries.

The proposed rule would amend 7 CFR 319.37-8(e) by adding Oncidium spp. from 

Taiwan to the list of plants that may enter the United States established in approved growing 

media, subject to specified growing, inspection, and certification requirements. We are taking 

this action in response to a request by Taiwan.

Potential Impact on Small Entities

The current policy requires all growing media to be removed from Oncidium plants prior 

to importation into the United States. This is accomplished through the use of a water stream that 

is directed to the roots of the plants. This power washing process damages or destroys the plant’s 

root structure causing transplant shock and a setback of the production process. Damaged roots 

also create a pathway for disease to enter the plant and can cause plant death. 

Plants established in growing media are less prone to transplant shock and adjust more 

quickly to the U.S production site. This amendment would enable U.S. growers to produce a

higher-quality finished product that requires less production time for plant health recovery. In 
2

addition, allowing importation of Oncidium plants established in media would allow U.S. 

growers access to species and hybrids that would otherwise perform poorly as a result of 

transportation and media removal.

Statistics on U.S. production of potted Oncidium plants, as a separate genus, are not 

available. In 2013, the largest U.S. producers sold 30.3 million potted orchids of all genera, 

including Oncidium. Of the 30.3 million potted orchids sold, 18.8 million were less than 5 inches 

in diameter, and 11.5 million were 5 inches or more in diameter. The average wholesale price of 

the smaller plants was $7.31 per pot, and the average wholesale price of the larger plants was 

$9.44 per pot. The value of 2013 sales of all genera of potted orchids was $245 million. Three 

States, California, Florida, and Hawaii, together accounted for 68 percent of all large growers, 

and 75 percent of all the orchids sold by these growers. Potted orchid sales statistics in 2013 for

each of these three States and nationally are shown in table 1.

Table 1 - Potted Orchids of All Genera Grown by Large U.S. Producers – 2013

Pots Sold (000) Avg.Wholesale 

Price/Pot

Wholesale Value

of All Sales 

Producers <5 in. 5 in. or more Total <5 in. 5 in or (000)

more

California 36 13,257 828 14,085 $7.66 $14.27 $113,364

Florida 43 2,598 4,381 6,979 6.85 9.67 60,161

Hawaii 37 1,471 94 1,565 6.62 10.15 10,692

Other States 54 1528 6147 7,675 61,608

U.S. Total 170 18,854 11,450 30,304 7.31 9.44 245,825

Source: Floriculture Crops 2013 Summary (NASS)

The proposed rule would likely result in Oncidium spp. imports from Taiwan shifting

from lower-value bare-rooted plants to higher-value potted plants. Although the rule would 

theoretically enable Taiwanese exporters to bypass U.S. growers altogether and provide finished 

plants directly to retailers, such a scenario is considered unlikely, given the additional marketing
3

support associated with shipping finished plants in pots.1The more likely scenario is that Taiwan 

would continue to export immature plants to U.S. growers who would then grow them out for 

sale as finished plants. Allowing the importation of Oncidium spp. in growing media would 

affect the quality and health of the imported plants, and would likely result in related price 

adjustments. It is unlikely that the rule would shorten the marketing chain by eliminating the role 

of intermediate handlers of plants. In 2013, Taiwan’s orchid plant exports to the United States 

were valued at $54 million. By comparison, the wholesale value of all potted orchid plants (all 

genera) sold by large U.S. growers in 2013 was $246 million. 

As indicated, the exact percentage of all potted orchid plants produced in the United 

States that fall within the Oncidium genus is unknown. However, that percentage is believed to 

be between 15 and 25 percent.

2 According to the Taiwanese Council of Agriculture, Taiwan’s

exports of Oncidium spp. in 2010 were valued at $14.74 million, with 94 percent of the revenues 

earned from exports to Japan. 

In 2010, Taiwan’s orchid exports to the United States were valued at $41.4 million. If 

the entirety of the remaining 6 percent of Oncidium spp. orchids exported by Taiwan that year 

were shipped to the United States, their value would have totaled about $880,000, or 2 percent of 

the value of all orchids imported from Taiwan.

The SBA small-entity standard for entities involved in Floriculture Production is 

$750,000 or less in annual receipts (NAICS 111422).3The number of entities participating in this 

broadly defined industry was 26,963 in 2012, with $5.9 billion in sales. Large-scale orchid 

 

1 According to ARS, finished plants tend to lose flower buds during shipment. Also, Taiwanese exporters 

of finished plants would be faced with the issue of having to provide ancillary services to U.S. retailers, such as 

setting up in-store displays and watering plants. Mass merchandise retailers in the U.S. require their growersuppliers to provide these services.

2

Personal communication with Ron McHatton, American Orchid Society, 8/6/2014.

3 Table of Size Standards based on NAICS 2014 [Floriculture Production: NAICS code 111422]. 

Washington, D.C.: U.S. Small Business Administration, effective July 14, 2014.
4

producers numbered 170 in 2013, comprising 0.6 percent of industry establishments. Given the 

sparse data available for U.S. orchid production, we are limited to examining the average 

wholesale value of orchids produced by the largest producers, which was $1.4 million in 2013, 

well above the SBA threshold for small entities. This average value of sales was only for the 

large establishments; it is probable that there are orchid producers that would be considered 

small entities by the SBA standard.

We expect any impact of the proposed rule for U.S. orchid producers, large or small,

would be minimal, given Oncidium spp. small share of the U.S. orchid market and their small 

share of orchid imports from Taiwan. Growers who import Oncidium spp. from Taiwan may

benefit from the rule; however gains due to improved product quality and reduced production 

time are likely to lead to compensating price adjustments, assuming a competitive market.

Allowing importation of Oncidium spp. from Taiwan in growing media may also lead to an 

expanded market for this genus, but any increase is likely to be limited given the flower’s 

distinctively unusual appearance. The APHIS Administrator has determined that this action, if 

promulgated, will not have a significant economic impact on a substantial number of small 

entities.