### United States Department of Agriculture Animal and Plant Health Inspection Service September 2011 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

- 2009

- 0093
CSF Status of Switzerland and Liechtenstein; FMD and SVD Status of Liechtenstein

Policy & Program Development Policy Analysis & Developmenti 

### Summary

This rulemaking will add Switzerland and Liechtenstein to the APHIS

- defined European Union (EU) classical swine fever region , and Liechtenstein to the lists of regions free of foot

and

- mouth disease, rinderpest, and swine vesicular disease. The impact of the rule in terms of pork and pork product imports from Switzerland and Liechtenstein will be inconsequential. U.S. net exports (exports minus imports) of pork and por k products averaged more than 1.17 million metric tons (MT) over the five

- year period, 2005

- 2009. During this same period, Switzerland’s exports of swine meat averaged only 201 MT, and its net imports (imports minus exports) averaged about 8,650 MT. While most U.S. swine farms are small entities, the potential effect of this rule for these operations w ill be negligible, given the very small volume of pork and pork products exported by Switzerland and that country’s status as a net importer of these commodi ties, in contrast to the United States’ role as a major world supplier. Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant econom ic impact on a substantial number of small entities.1 

### Introduction
This analysis provides the basis, as required by the Regulatory Flexibility Act, for certification by the APHIS Administrator that the rule will not have a significant economic impact on a substantial number of small entities. We examine expected impacts for U.S. small entities of adding Switzerland and Liechtenstein to the APHIS

- defined European Union (EU) classical swine fever region , and
L iechtenstein to the lists of regions free of foot

- and

- mouth disease, rinderpest, and swine vesicular disease. 

### Potential Impact on Small Entities
We address potential impacts of this rule by first describing the s ignificance of small entities to U.S. production of pork and pork products and then comparing U.S. and Swiss trade in these commodities

. 1 Information on Liechtenstein’s trade in pork and pork products is not available, but is presumed to be relatively insignificant. Liechtenstein’s tot al area is only 160 square kilometers, less than 2 percent of the country’s employment is engaged in agriculture, and its gross domestic product in 2007 was the equivalent of about 1/94 of the Swiss GDP. 2
S ize and other characteristics of U.S. swine operat ions Most swine operations in the United States are small , based on the Small Business Administration’s small

- entity standard of annual receipts of less than $750,000 (North American Industry Classification System category 112210). According to the 2007 C ensus of Agriculture, that year there were 74,789 swine operations in the United States. They sold 20 7 million swine

1 In 1924, Switzerland and Liechtenstein established a customs union, under which Switzerland formulates trade policy measures for the two countries. On January 2009, all border veterinary controls between Switzerland/ Liechtenstein and the EU were abolish ed. Trade in live animals and animal products takes place under the same conditions as intra

- EU trade. 2 http://www.liechtenstein.li/en/pdf

- fl

- multimedia

- information

- bilateral

- schweiz

- praesentation.pdfvalued at $18 billion. Nearly 90 percent of swine farms are small entities . Based on inventory share in 2007, small operations had annua l total sales of $3 billion and average sales of about $44,700, while large operations had annual total sales of $15 billion and average sales of about $1,886,200. The 2007 Census of Agriculture also contains data on certain sub

- categories of swine operations , namely, small family farms and farms having operators who belong to socially disadvantaged groups. 3

According to the 2008 Organic Production Survey , that year 8,748 swine were certified organic on 169 farms . These operations had sales that totaled approximately $ 4 mil lion. Most organic farms are relatively small in comparison to conventional swine operations. Over 65 percent of swine farms qualif ied as small family farm s (gross farm sales of less than $ 250 ,000), and many of these small family farms a lso qualified as limited resource farms (gross farm sales of not more than $100,000 and low household income). In 2007, almost 10 percent of swine farms had a woman as the principal operator. Swine farms with Hispanic , African American, and American Indi an or Alaskan Native operators each comprised about 2 percent of all U.S. swine farms.

U.S. and Swiss pork trade T he pork industry plays an important role in the U.S. economy. Cash receipts from marketing swine for meat totaled about $14.4 billion in 2009. 4

3 For definitions and information, see : USDA ERS. Structure and Finances of U.S. Farms: Family Farm Report, 20 10 edition , EIB

- 66, July 2010

. http://www.ers.usda.gov/Publications/EIB66/EIB66.pdf U.S. pork production increased from 9.4 million MT in 2005 to 10.4 million MT in 2009. U.S. consumption of pork and pork products increased from 8.7 million MT to 9.0 million MT during this same five

- year period, and net exports (exports minus imports) increased from 0.7 million MT to 1.5 million MT, an annual

4 http://usda.mannlib.cornell.edu/usda/current/MeatAnimPr/MeatAnimPr

- 04

- 29

- 2010.pdfgrowth rate in net exports of over 16 percent. Total U.S. exports of pork and pork products in FY 2011 are forecast to reach $4.5 billion, due mostly to larger sales to the major markets of Japan and Mexico. 5 , 6 In contrast, over the five

- year period 2005

- 2009, Switzerland’s annual net imports of swine meat averaged 8,646 MT (imports of 8,847 MT minus exports of 201 MT) and were valued at $28.5 million (imports of $29.8 million minus exports of $1.3 million). Nea rly all Swiss exports of pork and pork products are destined for EU countries. While most U.S. swine farms are small entities, the potential effect of this rule for these operations would be negligible, given t he very small volume of pork and pork products exported by Switzerland and that country’s status as a net importer of these commodities, in contrast to the United States’ role as a major world supplier.
We did not receive any comment with respect to the economic analysis during the designated comment period on the proposed rule. Under these circumstances, the 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.

5 http://usda.mannlib.cornell.edu/usda/current/AES/AES

- 08

- 31

- 2010.pdf

. 6 While the United States is a net exporter of pork and pork products, it is a net importer of live swine, all of which were imported from Canada in 2008 and 2009.

### References
USDA/APHIS/ Veterinary Services, APHIS Evaluation of the Classical Swine Fever Status of Switzerland and Liechtenstein, August 2009. Organic Survey, 2008. The Census of Agriculture, N ational Agriculture Statistical Service, USDA, 2010. SBA, Small business Size Standards matched to North American Industry Classification System 2002, Effective July 2006, (http://www.sba.gov/size/sizetable2002.html). The Global Trade Atlas: Global Trade Information Services, Inc., Country Edition (http://ww.gtis.com/gta/login.cfm). UN/FAO, FAOSTAT data (http://faostat.fao.org). USDA/ERS, Livestock, Dairy, and Poultry Outlook, August 2010. USDA/FAS, Production, Supply and Distribution (ps&d) datab ase (http://www.fas.usda.gov/psdonline/psdquery.aspx). USDA/NASS, Meat Animal Production, Disposition, and Income (http://usda.mannlib.cornell.edu/usda/current/MeatAnimPr/MeatAnimPr

- 08

- 31

- 2010.pdf)