### United States

Department of Agriculture Anim al and Plant Health Inspection Service October 2 0 11 Analysis in Support of Certification that the

Rule will not have a Significant Economic Impact on a Substantial Number of Small Entitie s Proposed Rule 2011 - 0028 RIN 0579 - AD61 Importation of Fresh Bananas from the Philippines into the Continental United States

Policy & Program Development Policy Analysis & Development1



### Summary This analy sis examines impacts for U.S. small entit ies of a rule that would allow fresh banana imports from the 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. T hese producers would be little affected b y the proposed rule given the large quantity of bananas already

imported b y the United States and the rel atively small quantity expected to be imported from the Philippines . Bananas from the Philippines would not be all owed entry

into 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 not more than 100 containers per year at most , or approximately 1 ,814 MT per ye ar , 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 expe cted to be imported from the Philippines is negligible . In addition , bananas from the Philippines would not be allowed entry into Hawaii. For these reasons, any impact of the rule for U.S. banana producers in Hawaii would be small. T he A PHI S A dministrator has determined that this action , if promulgated, will not have a significant economic impact on a substantial number of small entities.2



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

Flexibility

Ac t, for certification by

the APHIS Administrator that the p roposed rule, if promulgated, 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 would allow fresh banana imports from the Philippines into the continental United States

. The rule would 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 pest s into the United States. The Regulatory

Flexibility

Act requires agencies to evaluate potential effects of their proposed and final rules on small businesses, small organizations and small governmental jurisdiction s. Section 603 of the Act requires an agency to prepare an initial r egulatory flexibility anal ys is (IRFA) that describes the expected impact of a proposed rule on small entities. Inplace of the IRFA, the head of the agency may certify that a rule will n ot have a significant economic impact on a substantial number of small entities. This anal ys is provides factual basis for certification of this rule. 

### Potential Impact on Small Entities
U.S. c ommercial production of bananas takes place in Hawaii . In 2009, that State’s banana harvest total ed about 8,39 2 metric tons ( MT ) , harvested on 240 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 Classif ication 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/ann banFF.pdf3

annual receipts are not more than $750,000. 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. B anana farms in Hawaii ar e small, but they would be little a ffected b y the proposed rule , given the very large quantit y of bananas already imported by

the United States and the relativel y insignificant quantit y expected to be imported from the Philippines . Moreover , bananas from the Philippines would only

be allowed entry

into the continental United States

. The international banana market is highl y regional, and the United States import s bananas from Central America, South America and the Caribbean

. 2 In2009, the United States imported 3.6 million MT of fresh bananas , with Guatemala, Ecuador , and Costa Rica, respectivel 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 by the United States from the E astern H emisphere for the first time. Banana imports from the Philippines will compete against existing U.S. banana imports from other countries. The volume of bananas expected to be imported from the Philippines is not more than 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 maj or 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 int o 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/Ha waii/Publications/Fruits_and_Nuts/annbanFF.pdf4

U.S. banana producers in Hawaii would be small

. T he APHI S Administrator has determined that this action , if promulgated, will not have a significant economic impact on a subst antial number of small entities.