### United States

Department of Agriculture
Animal and Plant Health Inspection Service August 2010 Analysis in Support of Certification that the

Rule will not have a Significant Economic Impact on a Substantial Number of Small Entities

Final Rule APHIS - 2008 - 0060 RIN 0579 - AD13

Hass Avocado from Mexico; Importation into the Commonwealth of Puerto Rico a nd Other Changes

Policy & Program Development Policy Analysis & Developmenti



### Summary

This rule will allow importation of Hass avocados from Mexico into Puerto Rico in
accordance with phytosanitary measures listed in 7 CFR 319.56

- 4(b) and 319.56

- 30

. Puerto Rico has a relatively small avocado industry, importing most of its supply from the Dominican Republic. In 2007, 737 Puerto Rican farms harvested avocados, a significant decrease from the 1,217 farms reported in 2002 , an d suggesting an increasing reliance on imports . Most if not all
of these farms are small. Most avocados grown in Puerto Rico, as in the rest of the Caribbean and in Florida, are not Hass variety but larger, smooth

- skinned varieties.
W e expect th is rule to primarily result in in creased import competition. Any impacts for Puerto Rico’s small entities will depend in part upon the extent to which Hass avocados imported from Mexico substitute for the larger, smooth

- skinned varieties produced domestically. Avocado imports from Mexico will directly compete with Hass avocado s that may be shipped
from California.
O ther amendments included in this rule provide for Mexico’s NPPO to use an approved designee to inspect avocados for export, and when seed pests are detected, for suspension of avocado imports from specific orchards or packinghouses rather than from the entire municipality where the affected orchards or packinghouses are located . These changes will benefit U.S. entities generally by facilitating the inspection process in Mexico and minimizing import disruptions and reductions due to pest detections. Under these circumstances, t he Administrator of the Animal and Plant Health Inspection
Service has determined that this action will not have a significant economic impact on a
substantial number of small entities.1



### Introduction

Hass avo cados from Mexico are allowed to be imported into the 50 United States , but not
into Puerto Rico or U.S. Territories

. This rule will allow the ir importation into Puerto Rico in
accordance with phytosanitary measures listed in 7 CFR 319.56

- 4(b) and 319.56

- 30

. In addition,
this rule will provide for Mexic o’s N ational P lant P rotection O rganization (NPPO) to use an approved designee to inspect avocados for export , and when seed pests are detected, for suspension of avocado imports from specific orchards or packinghouses rather than from the entire municipality where the affected orchards or packinghouses are located. 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 an agency to prepare a final regulatory flexibility analysis ( F RFA) that describes the expected impact of the rule on small entities. In place of the
F RFA, the head of a n agency may certify that a rule will not have a significant economic impact on a substantial number of small entities. This analysis provides the factual basis for
certification of this rule. No significant issues were raised in public comments on the i nitial regulatory flexibility analysis that was prepared for the proposed rule. 

### Puerto Rico Avocado Production and Trade

A vocados are not a major crop in Puerto Rico . Annual production for 2006 and 2007, the most recent years for which production data are available, ave r aged about 1,800 metric tons (MT) (table 1). M ost avocados grown in Puerto Rico, as in the rest of the Caribbean and in Florida, are not Hass variety but larger, smooth

- skinned varieties. 1

1 http://www.gotopuertorico.com/pdf/saveur

- dec

- 07.pdfThe only foreign country from which Puerto Rico imports avocados and to which it

exports avocados is reportedly the Dominican Republic. Quantities imported by Puerto Rico,
2006

- 2009, and quantities exported by Puerto Rico, 2007

- 2009, are shown in table 1 . Although 2007 is the only year for which we have both production and complete trade data, it is apparent
that Puerto Rico’s total supply of avocados is composed largely o f imports. Information is not available on quantities of avocados shipped between the Puerto Rico and the U.S. mainland , whic h would affect Puerto Rico’s supply

.

Table 1. Production, import, and export of avocados by Puerto Rico , metric tons Year Production Imports Exports Net Imports 2006 1,721 2,937 NA NA 2007 1,881 3,498 30 3,468 2008 NA 3,021 27 2,994 2009 NA 2,478 11 2,467 Source: Global Trade Atlas, GTIS, Inc. Note: All of Puerto Rico’s foreign trade of avocados (imports and exports) for the years shown was with the Dominican Republic. This table does not include possible avocado shipments to or from the U.S. mainland that may have taken place

. 

### Potential Impact on Small Entities
Farms producing avocados are classified within the North American Industry Classification System under Other n on
- citrus f ruit f arming (NAICS 111 33 9). 2 For this industry
classification , a business is considered to be a small entity if its annual receipts are not more than

2 http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf$750,000. 3 The average market value of crops sold by farms with in th e other non

- citrus fruit

farming classification in 2007 was approximately $ 111,000

. 4 W e infer that the majority of farms producing avocados are small entities, including those in Puerto Rico

. The 2007 Census of Agriculture reported that 737 farms in Puerto Rico harvested avocados, a significant decrease
from the 1,217 farms reported in 2002

. The decline in the number of farm s that produce
avocados suggests an increasing reliance on imports

. Other industries in Puerto Rico that may be affected by this rule and their small

- entity
standards are Fresh fruit and vegetable wholesalers (NAICS 4224280 ) , not more than 5 00 employees ; wholesalers and other grocery stores (NAICS 445110 ) , not more than $27 million in annual receipts ; warehouse clubs and superstores (NAICS 452910 ) , not more than $27 million in annual receipts ; and fruit and ve getable markets (NAICS 445230 ) , not more than $7 million in annual receipts. 5 M ost of the entities that comprise these industr ies in the 50 States are small,
and we assume that the same is true in Puerto Rico. While most Puerto Rican entities that may be affected by this rule are small, the impact s will not be significant. G iven that most of Puerto Rico’s supply is imported, we expect that the largest impact will be in terms of increased import competition. Any i mpacts for Puerto Rico’s
small entities wi ll depend in part upon the extent to which Hass avocados imported from Mexico
substitute for the larger, smooth

- skinned varieties that are pr oduced domestically

. Avocado imports from Mexico will directly compete with Hass avocado s that may be shipped from

3 U.S. Small Business Administration, Table of Small Business Size Standards. http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf 4 2007 Census of Agriculture , Table 46. Selected Characteristics of Farms by North American Industry Classification System: 2007 , http://www.agcensus.usda.gov/Publications/2 007/Full_Report/Volume_1,_Chapter_1_US/st99_1_046_046.pdf 5 U.S. Small Business Administration, Table of Small Business Size Standards. http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdfCalifornia. The quantity of avocados that will be imported from Mexico into Puerto Rico is not

known.
T he other changes include d in this rule, namely, the provision s for Mexico’s NPPO to use an approved designee to inspect avo cados for export, and when seed pests are detected, for

suspen sion of avocado imports from specific orchards or packinghouses rather than from the entire municipality where the affected orchards or packinghouses are located , will benefit U.S. entities gene rally by facilitating the inspection process in Mexico and minimizing import disruptions and reductions due to pest detections. Under these circumstances, the Administrator of the Animal and Plant Health Inspection
Service has deter mined that this action will not have a significant economic impact on a
substantial number of small entities.

### References

Census of Agriculture, 2007, http://www.agcensus.usda.gov/Publications/2007/Full_Report/index.asp Global Trade Atlas, http://www.gtis.com/gta/default.cfm
U.S. Small Business Administration. U.S. Small Business Administration: Table o f Small Business Size Standards Match to North American Industry Classification System http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_ta blepdf.pdf