### United States

Department of Agriculture Animal and Plant Health Inspection Service June 2011 Analysis in Support of Certification that the

Rule will not have a Significant Economic Impact on a Substantial Number of Small Entities
Interim Rule APHIS - 2011 - 0036 Golden Nematode: Removal of Regulated Areas

Policy & Program Development Policy Analysis & Developmenti

Summary This rule codifies a Federal Order issued in December 2010, removing Elba and By ron townships in Genesee County , New York, from the areas listed in 7 CFR §301.85 as quarantined because of the golden nematode (GN). The se two townships are the first areas removed from the GN quarantine. GN is a major pest of potato plants and also attacks eggplant and tomato plants

. The GN quarantine has also negatively affect ed the sales of other agricultural commodities , and the operations of non

- agricultural businesses that use earth

- moving equipment as well . It is spread by the transport of cysts in soil, in particular through the inadvertent movement of infested soil attached to agricultural products, farming equipment, and other regulated articles. In 2007, there were 13 farms in Genesee County that harvested potatoes. These farms represented about 2 percent of such farms in New York, and comprised about 6 percent of the State’s acres of harvested potatoes. New York farms that harvested potatoes in 2007 represented about 6 percent of such farms in the United States and held about 2 percent of the Nation’s acres of harvested potatoes. Affected entities will benefit from no longer needing to satisfy compliance requirements of the quarantine. They

are also expected to find improved export opportunities. While the potato farms in the two townships qualify as small entities, they

are few in number and their share of the Nation’s potato industry is minor. The APHI S Administrator has determined that this action will not have a significant economic impact on a substantial number of small entities.

### Introduction

This analysis provides the basis, as required by the Regulatory

Flexibility

Act, for certification by

the APHIS Administrator that the interim rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. In December 2010, APHIS issued a Federal Order terminating the golden nematode (GN) quarantine for Genesee County , New York. This rule will codify the Order , remov ing the townships of Elba (approximately 35.7 square miles) and By ron (approximately

32.2 square mil es) from the GN quarantined areas listed in 7 CFR §301.85. Other counties in New York will remain in quarantine. These two townships have been regulated since 1977. APHI S and the New York Department of Agriculture and Markets work together in testing and treating soil, and providing assistance for cleaning of regulated articles for movement from GN quarantined areas

. A total of 11,194 soil samples from 6,152 acres in the two townships were tested from 1977 to 2010 as part of the quarantine program . GN is a major pest of potato plants and also attacks eggplant and tomato plants . It is spread b y the transport of cysts in soil , in particular through the movement of infested soil attached to agricultural products , farming equipment , and other regulated articles

. The quarantine has also negatively affected the sales of other agricultural commodities grown in Genesee County , such as onions, beets, carrots, turf grass, so ybeans, and wheat. 

### Potential Impact on Small Entities
Potato farms in Elba and By ron to wnships , which numbered 13 in 2007, are the primary beneficiaries of the lifting of the GN quarantine. According to the Small Business Administration (SBA) standard, a business engaged in potato production is considered to be asmall entity if its annual receipts are not more than $750,000. Average annual sales for New York potato producers in 2007 were estimated to have been about $ 61 ,5 00
. 1 We can assume that most if not all potato farms in the two townships are small. Table 1 provides information on th e number of farms and harvested acres affected by this rule , in relation to potato farms and harvested acres in New York and the United States . The 13 farms in Genesee County that harvested potatoes in 2007 represented about 2 percent of such farms in New York , and comprised about 6 percent of the State’s acres of harvested potatoes. N ew York farms that harvested potatoes in 2007 represented about 6 percent of such farms in the United States and held about 2 percent of the Nation’s acres of harvested potatoes
. Table 1. Number of farms that harvested potatoes and harvested acreages in the United States, in the State of New York, and in Genesee County , 2007 Numbe r/ pe rce ntage o f Harv este d A cre s Un it ed State s 15, 014 Un it ed State s 1, 131, 963 State o f New Yo rk 860 State o f Ne w Yo rk 18, 911 Ge ne se e County 13 Ge ne se e County 1, 123 State o f New Yo rk as a pe rce ntage ofthe Un it ed S tate s 6% State o f Ne w Yo rk as a pe rce ntage ofthe U nit ed State s 2% Ge ne se e County as a p er ce ntage o f the S tate o f New York 2% Ge ne se e County as a pe rce ntage ofthe State o f Ne w Yo rk 6% Source : 2007 C ensus of Agri cul ture . Numbe r/ pe rce ntage o f Fa rms

This rule will eliminate all costs associated with the GN pest control program, including labeling , inspection, and certification , for entities in Elba and By ron townships

. Genesee County ’s share of New York’s potato production is relativel y small and the removal of the quarantine will not significantly af fect the State’s p otato market

. But the farms will no longer need to satisfy

quarantine restrictions when moving regulated articles from the townships.

1 National Agricultural Statistics Service (NASS) , production measured in dollars.The rule will also benefit agricultural enterprises in Genesee County other than potato growers. For example, there have been instances when the importation by Canada of soy

beans produced in parts of Genesee County that are not under quarantine has been unnecessarily restricted

. Certain n on - agricultur al entities in the two townships will benefit from the rule as well. They include businesses that use earth

- moving equipment and might inadvertentl y move infested soil out of the quarantined area, such as construction firms and entities that install and maintain pipelines. None will need to continue to comply with the GN qu arantine regulations. A benefit of the rule for potato growers in the two townships may be improved export opportunities. Potato exports from New York may be constrained because of the GN quarantine,
as suggested by the value of those exports relative to the value of potato exports from a State unaffected b y GN, such as North Carolina

. As shown in table 2, these two States have similar numbers of p otato farms and acres harvested , b ut while the value of potato production in New York was over three times the value of North Carolina’s potato production in 2007 , the value of potato exports by

New York was less than one

- fourth th at of North Carolina. Recognizing that

v arious factors influence States’ export levels, the GN quarantine, which continue s in New Yo rk State other than in Elba and By ron townships , may play

a role in constraining that State’s potato exports. Producers in the two townships will be relieved of GN

- related export restrictions imposed by other countries. The rule will not have negative economic impacts. The potato farms directly affected are small, but the y are few in number and their share of the Nation’s potato industry is minor . The Administrator of the Animal and Plant Health Inspection Service has determined that this action wi ll not have a significant economic impact on a substantial number of small entities.T able 2
. Potato farms, acreage, production, and exports, for New York and North Carolina,

200 7 State Potato Farms Harv es te d

Ac re s Pr oducti on Ex port Ex port Rank North Carol in a 1, 123 14, 760 22, 545 3, 613 10 New York 860 18, 911 68, 400 754 13 Sourc e: 2007 C en sus ofA gri cul ture . Number Va lu e (M illio n doll ars)