### United States

Department of Agriculture

Animal and Plant Health Inspection Service July 2011 Final Regulatory Flexibility Analysis

Final Rule 10
- 005
- 2 RIN 0579
- AD36

Importation of Bromeliad Plants in Growing Media from Belgium, Denmark and the Netherlands

Policy & Program Development Policy Analysis & Developmenti



### Summary
The current regulations allow the importation of b romeliad plants under certain conditions, including that the y be free of sand, soil, earth, and other growing media. This rule
will allow the importation into the United States of bromeliad plants in approved growing media from Belgium, Denmark, and the Netherlands. Bromeliad plants are most commonly used as
house plants or landscape ornamentals in warmer climates.
Most wholesale nurseries that sell b romeliad s within the United States are located in
Florida. Based upon a survey conducted in April 2011, the Florida Nursery, Growers and Landscape Association found th at there are seven nurseries in that State that import immature bromeliad plants from the three European countries for finishing before sale to retailers

. These businesses will be directly affected by the rule. Under the rule, producers in Belgium, Denmark,
and the Netherlands will be able to ship mature b romeliad plants in growing media directly to U.S. retailers. Although the rule will allow the European suppliers to bypass domestic nurseries and provide finis hed plants directly to U.S. retailers, such a scenario is not considered to be a certainty, given difficulties associated with shipping finished plants in pots. It is possible that the European suppliers will continue to export immature plants to domestic nurseries

– but in growing media instead of in bare

- root form

– that will then grow them out for sale as finished plants.
U.S. nurseries that produce b romeliad plants from seed may also be affected by the rule, to the extent that their sales are displaced by bromeliad plants in growing media imported from Belgium, Denmark, and the Netherlands. The number of these nurseries is unknown but is
estimated to be fewer than 100, most or all of which are located in Cali fornia, Florida and Texas.
Most i f not all U.S. wholesale nurseries that sell b romeliad plants are small entities under the SBA’s standard of not more than $750,000 in annual receipts

. The impact of the rule on
the se nurseries will depend on the volume a nd life

- stage of the imported bromeliads , and on the portions of the nurseries’ incomes that derive from bromeliad plant sales. Other small entities including retail nurser ies are expected to benefit from new business opportunities created by the importat ion of bromeliad plants in growing media from Belgium, Denmark, and the Netherlands.ii



### Table of Contents Summary

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

Introduction

................................ ................................ ................................ ......................... 1
Final Regulatory Fle xibility Analysis

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

Need for and Objectives of the Rule

................................ ................................ ............... 1
Significant Issues raised by Public Comment in response to the Initial Regulatory
Flexibility Analysis

................................ ................................ ................................ ........ 2
Significant Issues raised by the Small Business Administration in response to the
Initial Regulatory Flexibility Analysis

................................ ................................ ........... 3
Potentially Affected Small Entities

................................ ................................ ................. 3
Projec ted Reporting, Recordkeeping, and Other Compliance Requirements

................. 5
Steps taken by APHIS to minimize Significant Economic Impacts on S mall Entities

.. 51



### Introduction
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 allow th e importation of b romeliad plants under certain conditions, including that the y be free of sand, soil, earth, and other growing media. The plants are generally imported bare

- rooted into the United States, and are potted for sale by U.S.
nurseries. They a re most commonly used as houseplants or landscape ornamentals in warmer
climates.
The rule will amend 7 CFR 319.37

- 8(e) to allow, subject to specified growing, inspection, and certification requirements , the importation into the United States of plants of the Bromeliaceae genera of Aechmea
, Cryptanthus
, Guzmania , Hohenbergia
, Neoregelia
, Tillandsia
, and Vriesea in approved growing media from Belgium, Denmark, and the Netherlands. APHIS has concluded, based on a pest risk analysis, that the current prohibition on imports of Bromeliaceae plants in growing media from the three countries is no longer necessary to p revent the introduction of plant pests or noxious weeds. 

### Final Regulatory Flexibility Analysis
The Regulatory Flexibility Act requires agencies to evaluate the potential effects of their proposed and final rules on small businesses, small organizations and small governmental jurisdictions. Section 60 4 of the Act requires agencies to prepare and make available for public

comment a final regulatory flexibility analysis that describes expected impacts of a rule on small
entities. Need for and Objectives of the Rule

This rule is in response to requests made by the Governments of Belgium, Denmark, and
the Netherlands to allow the importation into the United States of plants of the Bromeliaceae genera of Aechmea
, Cryptanthus
, Guzmania , Hohenbergia
, Neoregelia
, Tillandsia , and Vriesea in approved growing media. 1 We are taking this action after determining that the plants can be

1 European b romeliad growers have state d that the current APHIS requirement for washing of the roots with water prior to importation (to remove the growing media) is detrimental because it: ( 1) increases the number of plant s los t; ( 2) limits the size of the plant s that can be feasibly exported to the U nited States; and ( 3) results in temporary reductions in plant growth.2

imported, under certain conditions, without resulting in the introduction into the United States of plant pest s or noxious weed s

. Sig nificant Issues raised by Public Comment in response to the Initial Regulatory Flexibility Analysis

Comment: The Florida Nursery, Growers and Landscape Association (FNGLA) is opposed to the rule. Specific issues raised by FNGLA concerning the initial regulatory flexibility analysis (IRFA) are in regard to (i) APHIS’ estimat ion of the number of nurseries that import b romeliad plants from Belgium, Denmark and the Netherlands , and (ii) the Agency’s statement that few
nurseries would be affect ed by the proposed rule to the extent that they would be eliminated from the marketing chain. The commenter stated that APHIS neglected to include in the IRFA the direct and indirect economic impacts that closure of such nurseries may have on local econom ies
due to the loss of jobs

. Response:
APHIS appreciates receiving the information submitted by FNGLA on potential
economic effects of the rule for Florida nurseries. W e a cknowledged in the IRFA that we did not
know exactly how many nurseries import b romeliad plants from Belgium, Denmark, and the Netherlands, but estimated their number to be no more than three. Based upon a survey conducted in April 2011, FNGLA found that there are seven such nurseries. We agree that t hese

are businesses that will be directly affected by the rule. A total of 27 nurseries responded to the FNGLA survey, and most of them reported selling b romeliad genera included in this rule. We agree with the commenter that not only the
nurseries that have been importing b romeliad plants from Belgium, Denmark, and the Netherlands, but any nurseries that sell these plants may be affected by the rule . I mportation of
b romeliad plants in growing media can be expected to alter some marketing channels , with retailers able to buy mature p lants directly from European suppliers rather than rely on the maturation of the plants at Florida nurseries.
The commenter stated that the affected Florida nurseries that were surveyed expect to lose as much as $6.8 million in b romeliad plant sales, that is, 28.5 percent of their market. While
there may be economic shifts, as businesses throughout the United States re act to the rule, we are unable to authoritatively project the likely size of the impact. APHIS does not have independent3

information regard ing the possible magnitude of business losses. Just as there may be Florida
wholesale nurseries negatively affected, there may also be other businesses, such as retailers in Florida and elsewhere, that gain from the rule. A majority of the nurseries surve yed by FNGLA indicated that they would be forced to
eliminate about one

- fifth of their workforce as a result of the rule , that is, as many as 70 jobs.
APHIS is not able to evaluate the nurseries’ future workforce needs

. There may be negative employment consequences of the rule for certain wholesale nurserie s

. There may also be jobs
created as other businesses expand due to new marketing opportunities resulting from the rule. APHIS acknowledges the commenter’s concerns with regar d to potential business losses by Florida nurseries

. We understand FNGLA’s negative expectations, but believe that the importation of bromeliad plants in growing media can also result in economic gains in Florida
and elsewhere. Moreover, by allowing the imports to occur under reasonable
, science

- based restrictions, we advocate for more accessible world market s for U.S. exports as well. Significant Issues raised by the Small Business Administration in response to the Initial Regulatory Flexibility Analysis No significant issues were raised by the Small B usiness Administration in response to the Initial Regulatory Flexibility Analysis. Potentially Affected Small Entities Currently, b romeliad plants are imported into the United States

– primarily in bare

- root form

– by nurseries. 2 As described, t he nurseries generally import young (immature) plants and then grow them out and finish them in pots for sale in the U.S. market, primarily to retailers. 3 Under the rule, producers in Belgium, Denmark, and the Nether lands will be able to ship
b romeliad plants to the United States in growing media. The rule will , in effect, allow b romeliad growers in the three countries to bypass domestic nurseries altogether and provide finished plants directly to U.S. retailers.
F rom FNGLA’s comment on the proposed rule, we have learned that at least seven
Florida nurseries import b romeliad plants from Belgium, Denmark, and the Netherlands. Over

2 Bare

- rooted plants comprise the bulk of all U.S. bromeliad imports. Non

- bare

- rooted tissue culture plants (in a bottle or flask) account for essentially all other U.S. bromeliad imports. 3 Bare

- rooted plants can be imported at various stages of growth: as plugs, as immature (“young”) plants, or as mature (“flowering”) plants. Imports of bare

- rooted mature plants are virtually nonexistent because the re

- potting in the U.S. causes the plants to lose their buds.4

the four years 2006

- 2009 , the annual quantities of b romeliad plants imported from the
Netherlands were as follows: 759,684 (2009), 1,592,571 (2008), 2,136,109 (2007), and 2,350,476 (2006). The volume of b romeliad plants imported from Belgium and Denmark is
unknown. 4 The sharp decline in imports from the Netherlands between 2006 and 2009 is due primarily to the economic recession in the United States and to the weakening of the U.S. dollar
relative to the euro. 5 Dutch of ficials estimate that, with the rule in effect, b romeliad exports to
the United States from the Netherlands could reach th e 2006 level, and even increase beyond that by 5 to 10 percent per year under favorable economic conditions. The estimated volume of U.S. imports of b romeliad plants from Belgium and Denmark under the rule is unknown. 6 Although the rule will allow the affected foreign growers to bypass domestic nurseries and provide finished plants directly to U.S. retailers, such a scenario is not certain, given the problems associated with shipping finished plants in pots. 7 It is possible, therefore, that the
affecte d foreign growers will continue to export immature plants to domestic nurseries

– but now in growing media instead of in bare

- root form

– that will then grow them out for sale as finished plants. The rule also has the potential to affect domestic grower s who produce b romeliad plants from seed (as opposed to those who import immature plants and then grow them out for sale), to the extent that their sales are displaced by imports in growing media from Belgium, Denmark,
and the Netherlands. But domestic gr owers of b romeliads also produce other plant varieties; any impact of imports of bromeliads in growing media will be muted because b romeliads account for only a portion of the nurseries’ overall income. 8 The number of U.S. growers who currently produce b r omeliad plants from seed is unknown but is estimated to be fewer than 100, most or all of whom are located in California, Florida and Texas. 9

4 Harmonized Tariff Schedule trade data does not offer the level of detail necessary to identify imports of bromeliad plants, much less specific genera of bromeliad plants. Trade data for the Netherlands was provided by a Dutch grower and is considered unof ficial. 5 The weakening of the dollar has made imports from the Netherlands

-- and other euro currency countries

-- more costly for U.S. consumers. 6 The regulatory workplan states that imports under this rule could total approximately “10 containers (120 tons)” per year. The number of plants represented by that volume is unknown. 7 F inished plants tend to lose flower buds during shipment

. 8 Source: William Aley (APHIS). 9 Source: Robert Griesbach (ARS).5

It is reasonable to assume that most U.S. growers of b romeliads are small in size. This assumption is based on composite data for providers of the same or similar services in the United States. In 2007, receipts by the 54,889 U.S. businesses in the industry category NAICS 1114 (“Greenhouse, Nursery, and Floriculture Production,” which includes b romeliad producers ) averaged $309,117, well below the Small Business Administration’s small

- entity threshold of $750,000 in annual receipts. 10 Projected Reporting, Recordkeeping, and Other Compliance Requirement s Reporting and recordkeeping requirements associated with the final rule are discussed in the rule under the heading "Paperwork Reduction Act." Steps taken by APHIS to minimize Significant Economic Impact s on Small Entities

APHIS acknowledge s economic impact s that the rule may have on the U.S. bromeliad market genera lly, and more specifically, on Florida nurseries that currently import b romeliad plants free of growing media from Belgium, Denmark, and the Netherlands

. With the rule,
wholesalers will be able to import b romeliad plant s of any size in growing media
, redu cing the
need for the plants to mature at Florida nurseries before their sale to retailers. W hile there may be volume losses by certain Florida nurseries and possible employment effects , the industry is dynamic and can be expected to evolv e in response to changes in supply and demand. E ntities including Florida nurseries that are be tter able to seize new business opportunities resulting from
the rule can be expected to accrue economic gains

. APHIS rule s are science

- based. To continue to prohibit the importation of b romeliad plants in growing media from Belgium, Denmark, and the Netherlands when it has been determined that pest risks can be satisfactorily mitigated would be contrary to the mission of the Agency. If APHIS were to propose lessening potential adverse economic impacts of the rule for
certain U.S. nurseries, such as by delaying implementation of the rule or limiting its scope in

some manner, benefits of the rule for other U.S. businesses, large and small, would be delayed or
limited as well, and the net benefit of the rule for the U.S. economy would be reduced. APHIS has concluded that the provisions set forth in the proposed rule should remain unchanged.

10 Source: 2007 Census of Agriculture (NASS) and SBA.