Importation of Grapefruit, Lemons, and Oranges from Argentina

DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

7 CFR Parts 300 and 319

[Docket No. 97-110-1]

RIN 0579-AA92

Importation of Grapefruit, Lemons, and Oranges from Argentina

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Proposed rule.

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SUMMARY: We are proposing to amend the citrus fruit regulations by

recognizing a citrus-growing area within Argentina as being free from

citrus canker. Surveys conducted by Argentine plant health authorities

in that area of Argentina since 1992 have shown the area to be free

from citrus canker, and Argentine authorities are enforcing

restrictions designed to protect the area from the introduction of that

disease. We are also proposing to amend the fruits and vegetables

regulations to allow the importation of grapefruit, lemons, and oranges

from the citrus canker-free area of Argentina under conditions designed

to prevent the introduction into the United States of two other

diseases of citrus, sweet orange scab and citrus black spot, and other

plant pests. These proposed changes would allow grapefruit, lemons, and

oranges to be imported into the United States from Argentina subject to

certain conditions.

DATES: Consideration will be given only to comments received on or

before October 13, 1998.

ADDRESSES: Please send an original and three copies of your comments to

Docket No. 97-110-1, Regulatory Analysis and Development, PPD, APHIS,

Suite 3C03, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please

state that your comments refer to Docket No. 97-110-1. Comments

received may be inspected at USDA, room 1141, South Building, 14th

Street and Independence Avenue SW., Washington, DC, between 8 a.m. and

4:30 p.m., Monday through Friday, except holidays. Persons wishing to

inspect comments are requested to call ahead on (202) 690-2817 to

facilitate entry into the comment reading room.

FOR FURTHER INFORMATION CONTACT: Mr. Ron Campbell, Import Specialist,

Phytosanitary Issues Management Team, PPQ, APHIS, 4700 River Road Unit

140, Riverdale, MD 20737-1236; (301) 734-6799; e-mail:

[email protected].

SUPPLEMENTARY INFORMATION:

Background

The regulations in ``Subpart--Fruits and Vegetables'' (7 CFR 319.56

through 319.56-8, referred to below as the fruits and vegetables

regulations) prohibit or restrict the importation of fruits and

vegetables into the United States from certain parts of the world to

prevent the introduction and dissemination of plant pests, including

fruit flies, that are new to or not widely distributed within the

United States.

The regulations in ``Subpart--Citrus Fruit'' (7 CFR 319.28,

referred to below as the citrus fruit regulations), restrict the

importation of the fruit and peel of all genera, species, and varieties

of the subfamilies Aurantioideae, Rutoideae, and Toddalioideae of the

family Rutaceae into the United States from specified countries in

order to prevent the introduction of citrus canker disease (Xanthomonas

campestris pv. citri (Hasse) Dye).

Argentina is not currently listed in Sec. 319.28(a)(1) of the

citrus fruit regulations as a country from which importations are

restricted to prevent the introduction of citrus canker, but scientific

literature indicates that the A strain of citrus canker--i.e., that

which is referred to in Sec. 319.28(a)(1)--occurs in Argentina.

Therefore, in this document, we are proposing to amend

Sec. 319.28(a)(1) by adding Argentina to the list of countries from

which importations are restricted to prevent the introduction of citrus

canker. However, as explained below under the heading ``Citrus Canker

Free Area,'' the entry for Argentina would contain an exception for the

States of Catamarca, Jujuy, Salta, and Tucuman.

The citrus fruit regulations also restrict the importation of the

fruit and peel of all species and varieties of the genus Citrus into

the United States from specified countries, including Argentina, in

order to prevent the introduction of the citrus diseases sweet orange

scab (Elsinoe australis Bitanc. and Jenkins) and the B strain of citrus

canker, which is referred to in the citrus fruit regulations as

``Cancrosis B.''

In this document, the A and B strains of citrus canker are referred

to collectively as citrus canker, except in those instances where it is

necessary to refer specifically to either of the two strains.

Citrus Canker Free Area

The Government of Argentina has requested that the Animal and Plant

Health Inspection Service (APHIS) recognize the citrus production areas

in four States in northwestern Argentina--Catamarca, Jujuy, Salta, and

Tucuman--as free from citrus canker. In support of its request, the

Argentine Government submitted the results of surveys conducted in the

citrus-producing areas of those four States since 1992 by Argentina's

national plant protection organization, the Servicio Nacional de

Sanidad y Calidad Agroalimentaria (SENASA).

APHIS has reviewed the documentation submitted by the Government of

Argentina in support of its request and conducted an on-site evaluation

in 1994 of Argentina's plant health programs in Catamarca, Jujuy,

Salta, and Tucuman with regard to citrus diseases. 1 The

evaluation consisted of a review of Argentina's citrus canker survey

activities, laboratory and testing procedures for the examination of

samples collected during the surveys, and the administration of laws

and regulations intended to prevent the introduction of citrus canker

into the citrus-growing areas of Catamarca, Jujuy, Salta, and Tucuman

from the rest of Argentina and from outside the country. After

reviewing the documentation provided by Argentina and the data gathered

during the on-site visit, we believe that the Government of Argentina

has demonstrated, in accordance with the standards established by the

United Nations' Food and Agriculture Organization (FAO) for

[[Page 43118]]

pest-free areas, that the citrus-growing areas of Catamarca, Jujuy,

Salta, and Tucuman are free from citrus canker.

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\1\ Information regarding the documentation submitted by the

Government of Argentina and the on-site visit conducted by APHIS may

be obtained from the person listed under FOR FURTHER INFORMATION

CONTACT.

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Based on the information provided by Argentina and the information

gathered by APHIS, we are proposing to amend Sec. 319.28(a) to reflect

the citrus canker-free status of Catamarca, Jujuy, Salta, and Tucuman.

Currently, the regulations in Sec. 319.28(a)(3) list the entire country

of Argentina, among other places, as being affected with Cancrosis B.

Therefore, we would amend the entry for Argentina in Sec. 319.28(a)(3)

to indicate that the States of Catamarca, Jujuy, Salta, and Tucuman are

considered to be free from Cancrosis B. Similarly, the proposed new

entry for Argentina in Sec. 319.28(a)(1), as discussed above, would

also indicate that those four States are considered to be free from

citrus canker (i.e., the A strain).

We are also proposing to amend Sec. 319.28(a)(2) of the citrus

fruit regulations, which prohibits the importation of citrus fruit and

peel from certain countries, including Argentina, based on the presence

of sweet orange scab in those countries. As discussed in the next

paragraph, we are proposing to amend the fruits and vegetables

regulations to allow the importation of grapefruit, lemons, and oranges

from Argentina under conditions designed to prevent the introduction of

sweet orange scab. Therefore, in order to prevent a conflict between

the citrus fruit regulations and the fruits and vegetables regulations,

we are proposing to add an exception to the prohibition on citrus fruit

and peel from Argentina in Sec. 319.28(a)(2). Specifically, we would

add the words ``except as provided by Sec. 319.56-2f of this part''

after the entry for Argentina in the list of countries considered to be

affected with sweet orange scab. That proposed exception would refer

the reader to Sec. 319.56-2f of the fruits and vegetables regulations,

which is the section we are proposing to add that would contain the

conditions under which grapefruit, lemons, and oranges could be

imported into the United States from Argentina.

Importation of Grapefruit, Lemons, and Oranges

The Government of Argentina has requested that APHIS allow the

importation of grapefruit, lemons, and oranges into the United States

from the citrus canker-free States of Catamarca, Jujuy, Salta, and

Tucuman. Because there are plant pests of concern other than citrus

canker known to exist in Argentina, the proposed importation of

grapefruit, lemons, and oranges would be subject to certain conditions.

As noted above in our discussion of the content of the citrus fruit

regulations, the disease sweet orange scab exists in Argentina. In

addition to sweet orange scab, Argentina is also affected with a fungal

disease known as citrus black spot (Guignardia citricarpa), the

Mediterranean fruit fly (Medfly) (Ceratitis capitata), and certain

fruit flies of the genus Anastrepha. To prevent the introduction into

the United States of those diseases and fruit flies, the Government of

Argentina, with the cooperation of APHIS, has formulated a systems

approach of tiered and overlapping measures that, when combined with

specified cold treatments, would reduce the risks presented by those

pests to a negligible level.

Therefore, we are proposing to allow fresh grapefruit, lemons, and

oranges to be imported into the United States from Argentina if they

are grown, packed, and shipped under specified phytosanitary conditions

designed to mitigate the risk of plant pest introduction. The proposed

conditions for importation, which would be set out in a new

Sec. 319.56-2f in the fruits and vegetables regulations, are explained

below.

Permit Requirement

The fruits and vegetables regulations require persons contemplating

the importation of fruits or vegetables that are authorized entry under

the regulations to first apply for a permit from APHIS. That permit

requirement, which is found in Sec. 319.56-3 of the fruits and

vegetables regulations, would be applicable to the importation of

grapefruit, lemons, and oranges under the provisions of this proposed

rule.

Origin Requirement.

The grapefruit, lemons, or oranges would have to have been grown in

a grove located in a region of Argentina that has been determined to be

free from citrus canker. As discussed above, we believe that the

Government of Argentina has demonstrated, in accordance with FAO

standards, that the citrus-growing areas of Catamarca, Jujuy, Salta,

and Tucuman are free from citrus canker. This proposed requirement

would ensure that the grapefruit, lemons, or oranges would not present

a risk of introducing citrus canker into the United States.

Grove requirements

The grapefruit, lemons, or oranges would have to have been grown in

a grove that meets several specified conditions intended to prevent the

introduction of sweet orange scab and citrus black spot into the United

States.

We would require that the grove be registered with the citrus fruit

export program of SENASA. Grower registration would, from an

administrative standpoint, allow SENASA to identify specific groves and

thus track each grove's compliance with the requirements of the export

program during the growing season and during the movement of fruit to

the packinghouses and subsequent export.

We would also require that the grove be surrounded by a 150-meter-

wide buffer area that would be subject to the same treatments as would

be applied in the export grove. This buffer area, in which citrus fruit

could be grown but from which no citrus fruit could be offered for

importation into the United States, would separate the export grove

from surrounding agricultural or nonagricultural areas. Because those

areas lying outside the buffer area would not be subject to the same

measures as would be applied in the export grove and buffer area, there

is the possibility that sweet orange scab or citrus black spot may be

present in those areas. Thus, by providing for the suppression of

disease inoculum over a wide area, the buffer area would offer the

export grove an additional measure of protection from those diseases.

In order to prevent the introduction of diseased trees into an

export grove, we would require that any new citrus planting stock used

in the grove be obtained from a ``clean'' source. This proposed

requirement is already being implemented by SENASA as part of its

administration of laws and regulations intended to prevent the

introduction of citrus canker into the citrus-growing areas of

Catamarca, Jujuy, Salta, and Tucuman from the rest of Argentina and

from outside the country.

Under our proposed regulations, planting stock would have to be

obtained from a source (e.g., the grove itself, another grove, or a

nursery) located within the States of Catamarca, Jujuy, Salta, or

Tucuman, or from a SENASA-approved citrus stock propagation center. We

would allow the use of planting stock that originated within Catamarca,

Jujuy, Salta, or Tucuman because those States have been determined to

be free of citrus canker and because Argentine Government regulations

restrict the entry of potential citrus canker host material into those

States. Similarly, any citrus plants imported into Argentina, and any

domestic-origin citrus plants from outside the four citrus canker-free

States, must meet strict phytosanitary requirements before they may

enter the States of Catamarca, Jujuy, Salta, or Tucuman. Under SENASA

supervision,

[[Page 43119]]

such citrus plants are officially tested to ensure their freedom from

quarantine pests and diseases, and are grown in quarantine before being

released for use in the citrus canker-free area of Argentina. We

believe that requiring growers to obtain any new grapefruit, lemon, or

orange propagative material from one of these sources would help ensure

that disease is not introduced into an export grove by new citrus

planting stock.

Fallen fruit, leaves, and branches could serve as potential

reservoirs of disease inoculum, especially for citrus black spot.

Therefore, we would require those materials to be removed from the

grove floor and from the ground in the buffer area before the trees in

the grove blossom, which is the phase of the growing cycle in which

citrus black spot infection primarily occurs. Removing fallen fruit,

leaves, and branches before the trees in the grove blossom would help

to ensure that the grove is as clean as possible prior to the

development of the fruit that would eventually be exported to the

United States. We would further require that the grove and buffer area

be inspected by SENASA before blossom to verify that the required

sanitation measures had been accomplished.

We would further require that the grove and buffer area be treated

at least twice with an oil-copper oxychloride spray during the growing

season in which fruit was being produced for export to the United

States. Treatment with oil-copper oxychloride has been shown to provide

control of sweet orange scab and citrus black spot in Argentina. In

order to obtain the maximum benefit from each treatment, the timing of

the treatments would be determined by SENASA based on its monitoring of

climatic data, fruit susceptibility, and the presence of disease

inoculum. SENASA personnel would have to monitor the application of the

treatments to ensure that the treatments were being applied correctly

and at the proper time.

Finally, as an additional means of verifying an export grove's

freedom from sweet orange scab and citrus black spot, we would require

that each grove and buffer area be surveyed by SENASA 20 days before

the harvest of the grove's grapefruit, lemons, or oranges. The required

survey would consist of a visual inspection of the grove and the buffer

area to check for visible signs of the presence of either disease,

followed by the laboratory examination of a sample of fruit. Fruit

would be sampled at the rate of 320 fruit from each 200 hectares, and

the fruit would be selected according to a randomized sampling protocol

determined by SENASA.

Post-harvest Handling of Fruit

After being harvested from an export grove, the grapefruit,

oranges, or lemons would have to be handled in accordance with several

specific conditions.

We would require that the grapefruit, lemons, or oranges be moved

from the export grove to the packinghouse in field boxes or containers

of field boxes that are marked to show the SENASA registration number

of the grove in which they were grown. The identity of the origin of

the fruit would have to be maintained during the time the fruit is

being handled and prepared for shipment in the packinghouse. These

proposed requirements would ensure that SENASA inspectors would be able

to trace the fruit back to its grove of origin in the event that

disease was detected on the fruit.

We would prohibit a packinghouse in which grapefruit, lemons, or

oranges are processed for export to the United States from accepting

any fruit from nonregistered export groves during the time that fruit

intended for export to the United States is being handled in the

packinghouse. Barring the entry of fruit from nonregistered groves into

the packinghouse would ensure that the fruit intended for export is not

commingled with or potentially infected by fruit that was grown in a

grove that has not been subject to the same sanitation, inspection, and

treatment measures that would be required for export groves.

After its arrival at the packinghouse, we would require the fruit

to be held in the packinghouse at room temperature for 4 days. This

proposed 4-day holding period would allow sufficient time for the

symptoms of citrus black spot to become evident in the grapefruit,

lemons, or oranges in the event that any latent infection exists in the

fruit. At the conclusion of the 4-day holding period, the fruit would

have to be examined by SENASA inspectors to verify its freedom from

visible signs of disease.

Once the SENASA inspectors have determined that the fruit is free

from visible signs of disease, we would require the grapefruit, lemons,

or oranges to be chemically treated. Specifically, the fruit would be

sequentially treated with: (1) Immersion in sodium hypochlorite

(chlorine) at a concentration of 200 parts per million; (2) immersion

in orthophenilphenate of sodium; (3) spraying with imidazole; and (4)

application of 2-4 thiazalil benzimidazole and wax. These treatments

would surface-sterilize the fruit and protect against the development

of any spores that may be present. After the fruit has been treated,

and before it is packed into clean, new shipping cartons for export, we

would require that SENASA inspectors examine the grapefruit, lemons, or

oranges a final time for any evidence of disease. The clean, new

shipping cartons would have to be marked with the registration number

of the grove in which the fruit was grown in order for APHIS or SENASA

to trace the fruit back to its origin in the event that pests or

diseases are detected in the fruit after it leaves the packinghouse.

Phytosanitary Certificate

We would require grapefruit, lemons, and oranges offered for entry

into the United States from Argentina to be accompanied by a

phytosanitary certificate issued by SENASA that states the grapefruit,

lemons, or oranges were produced and handled in accordance with the

origin requirement, grove requirements, and post-harvest handling

requirements discussed above. The phytosanitary certificate would also

have to state that the grapefruit, lemons, or oranges were examined and

found to be free from citrus black spot and sweet orange scab. The

phytosanitary certificate would serve as SENASA's official confirmation

that the requirements of the regulations in proposed Sec. 319.56-2f(a),

(b), and (c) had been met.

Cold Treatment

As noted above, Medfly and fruit flies of the genus Anastrepha are

known to exist in Argentina. Therefore, we would require grapefruit,

lemons (except smooth-skinned lemons), and oranges offered for entry

from Argentina to be treated with an authorized cold treatment listed

in the Plant Protection and Quarantine (PPQ) Treatment Manual in order

to prevent the introduction of fruit flies into the United States.

(Smooth-skinned lemons would be exempted from the proposed cold

treatment requirement because they have been shown through Agricultural

Research Service studies \2\ to not be a host of Medfly, and lemons are

not reported to be hosts of Anastrepha spp. fruit flies.) The cold

treatment that would be required, which is designated as T107(c) in the

PPQ Treatment Manual, is approved for use on a variety of fruits--

including grapefruit and oranges--to treat for

[[Page 43120]]

Anastrepha spp. fruit flies. The treatment is as follows:

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\2\ Information on this research may be obtained from the person

listed under FOR FURTHER INFORMATION CONTACT.

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Exposure

Temperature period

(days)

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32 deg.F or below........................................... 11

33 deg.F or below........................................... 13

34 deg.F or below........................................... 15

35 deg.F or below........................................... 17

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Because the exposure times in T107(c) are longer than those in

T107(a), the cold treatment for Medfly, the treatment would serve to

prevent the introduction of all the fruit flies of concern.

We would have to amend the PPQ Treatment Manual in order to include

grapefruit, lemons (except smooth-skinned lemons), and oranges from

Argentina in that document's list of countries and fruits for which

cold treatment is authorized. Therefore, because the PPQ Treatment

Manual is incorporated by reference into the regulations in Title 7,

chapter III, we would also have to amend Sec. 300.1, ``Materials

incorporated by reference; availability,'' to reflect the date of that

amendment to the PPQ Treatment Manual.

The cold treatment would have to be conducted in accordance with

the existing requirements of Sec. 319.56-2d of the fruits and

vegetables regulations, which applies to the importation of fresh

fruits for which cold treatment is a condition of entry. That section

sets forth the general requirements concerning the place and manner of

cold treatment, safeguarding of untreated fruit, precooling and

refrigeration, and special requirements for treatment at certain ports.

Inspection at Port of First Arrival

Grapefruit, lemons, and oranges offered for entry into the United

States from Argentina would be subject to Sec. 319.56-6 of the fruits

and vegetables regulations, which provides, among other things, that

all imported fruits and vegetables, as a condition of entry, shall be

inspected and shall be subject to disinfection at the port of first

arrival, as may be required by a U.S. Department of Agriculture (USDA)

inspector to detect and eliminate plant pests. Section 319.56-6 also

provides that any shipment of fruits and vegetables may be refused

entry if the shipment is so infested with fruit flies or other

injurious plant pests that an inspector determines that it cannot be

cleaned or treated. The inspector at the port of arrival would also

review the documentation, including the phytosanitary certificate,

accompanying the fruit to ensure that it was being imported in

accordance with the regulations.

Disease detection

If citrus black spot or sweet orange scab is detected on any

grapefruit, lemons, or oranges during the course of any of the

inspections or tests required by proposed Sec. 319.56-2f, the grove in

which the fruit was grown, or was being grown, would have to be removed

from the SENASA citrus export program for the duration of that year's

growing and harvest season. We would also prohibit, for the remainder

of that growing and harvest season, the importation of any fruit

harvested from a grove determined to be affected with one of those

diseases. These proposed measures would be a necessary step in response

to the detection of any of the diseases that the proposed regulations

are designed to exclude.

Executive Order 12866 and Regulatory Flexibility Act

This proposed rule has been reviewed under Executive Order 12866.

The rule has been determined to be significant for the purposes of

Executive Order 12866 and, therefore, has been reviewed by the Office

of Management and Budget.

This proposed rule would amend the citrus fruit regulations by

recognizing a citrus-growing area within Argentina as being free from

citrus canker. This proposed rule would also amend the fruits and

vegetables regulations to allow the importation of grapefruit, lemons,

and oranges from the citrus canker-free area of Argentina under

conditions designed to prevent the introduction into the United States

of two other diseases of citrus, sweet orange scab and citrus black

spot, and other plant pests. These proposed changes would allow

grapefruit, lemons, and oranges to be imported into the United States

from Argentina subject to certain conditions.

Analysis

This analysis considers the potential economic impact on domestic

producers of citrus of allowing the importation of fresh citrus fruits

from Argentina into the United States. It focuses on citrus production,

price, and potential consumer and producer impacts of the proposed

rule. The possible impacts considered include losses to domestic

producers and gains to consumers due to decreased prices. The magnitude

of the impact would depend on the size of additional Argentine supply,

the U.S. supply and demand for citrus, and price conditions in the rest

of the world. The data sources used for the analysis include: USDA,

National Agricultural Statistics Service production statistics; USDA,

Economic Research Service, ``Foreign Agricultural Trade of the United

States;'' USDA, Agricultural Marketing Service, marketing information;

USDA, Foreign Agricultural Service (FAS), ``Annual Citrus Report;'' and

United Nations, Food and Agricultural Organization (FAO), production

and trade statistics.

U.S. Citrus Industry

Citrus production

The United States produced an annual average of 31,460 million

pounds of citrus between 1992 and 1996, with an average annual total

value of $2.5 billion. Four States--Arizona, California, Florida and

Texas--accounted for almost all of the commercial citrus fruit

production. Of these, California (21 percent) and Florida (76 percent)

accounted for approximately 97 percent of the citrus production. A

small amount of citrus fruit is produced in Hawaii and Louisiana. The

major varieties of citrus fruit include oranges (73 percent),

grapefruit (12 percent), lemons (10 percent) tangerines (2.16 percent),

tangelos (0.88 percent), temples (0.65 percent), and limes (0.08

percent). The first four--oranges, grapefruit, lemons, and tangerines--

account for about 98 percent of the total U.S. citrus production. The

1996 value of U.S.-produced citrus was: Oranges, $1.82 billion;

grapefruit, $296 million; lemons, $251 million; limes, $4 million;

tangelos, $15 million; tangerines, $111 million; and temples, $14

million. The United States accounted for nearly 24 percent of world

citrus production.

In 1992 (the latest census year), citrus fruit was produced on

17,898 farms (528 in Arizona; 8,104 in California; 8,205 in Florida;

509 in Texas; 458 in Hawaii; and 94 in Louisiana). Approximately 96

percent of U.S. citrus fruit farms (Standard Industrial Classification

0272) had gross sales of less than $500,000 and thus are considered to

be small entities according to the Small Business Administration size

standards (13 CFR 121.601). These small citrus farms accounted for less

than 34 percent of the total citrus growing acreage, while the

remaining 4 percent of citrus farms (i.e., those with annual gross

sales of $500,000 or more) accounted for about 66 percent of the

acreage.

Production for the fresh citrus fruit market accounted for about 28

percent of total citrus production or approximately 4.5 million tons.

The share of citrus fruits destined for the fresh market (as opposed to

the

[[Page 43121]]

processing or export markets) varied by State and by fruit. Nearly 69

percent of citrus production in Arizona, 72 percent in California, 14

percent in Florida, and 69 percent in Texas was for the fresh market.

Overall, about 20 percent of oranges, 47 percent of grapefruit, 54

percent of lemons, and 70 percent of tangerines was for the fresh

market.

U.S. production of citrus fruits showed an annual growth rate of

3.5 percent between 1985 and 1996. Of the major citrus fruits, oranges

increased at an average annual rate of 4.5 percent and tangerines at

3.8 percent, while grapefruits and lemons did not show any increase.

The annual average consumption of citrus fruits in the United States

has stayed at around 25.2 pounds per person over the last 25 years with

very little variability (plus or minus 2.6 pounds per person). Specific

per capita fresh citrus fruit consumption varies by fruit.

Fresh fruits are marketed throughout the year, most heavily between

October and May. Overall, domestic shipments of citrus fruit are at

their lowest during the months of July, August, and September, dropping

to approximately 3.5 to 5 percent of average annual shipments. U.S.

citrus exports are also at their lowest during these months. Citrus

imports are also widely distributed throughout the year, but with

above-average imports during July, August, and September (about 29

percent). Wholesale prices follow the same seasonal supply patterns, as

they are lower during peak production months--October to May--and

higher during summer months from June to September. Since the peak

production period for citrus in Argentina is from May to October, the

entry of Argentine fresh citrus fruits would likely peak during these

months, which represent the most likely window of opportunity for

Argentine imports to enter the U.S. market. The annual average terminal

market wholesale prices in major U.S. cities is approximately 38 cents

per pound, while the average from June through September is 43 cents

per pound. Importers and brokers would likely benefit from the entry of

Argentine citrus fruit into the U.S. market because they would be able

to provide quality fruits during the months when domestic production is

lowest. Consumers would be able to obtain a wide choice of fresh citrus

throughout the year and would not need to wait for the peak domestic

production season or switch to non-citrus fruits. Producers would not

need to spend additional resources promoting their product as each new

harvest season arrives.

Citrus trade

Since consumption of citrus fruits increased by only 1.5 percent

between 1985 and 1996 and production increased at 3.5 percent, domestic

consumption is not keeping up with the growth rate of production. As a

result, foreign markets play an increasingly important role for U.S.

producers, accounting for approximately 29 percent of the 1996 annual

fresh citrus fruit sales. The total value of the U.S. fresh citrus

fruit exports was approximately $704 million in 1996, accounting for

approximately 14 percent of world citrus fruit exports in 1996. In

terms of value, oranges accounted for 41 percent of citrus exports;

grapefruit for 35.6 percent; lemons and limes for 17.5 percent;

mandarins and tangerines for 5.2 percent; and other citrus for 0.4

percent. By weight, about 44 percent of 1996 fresh citrus export was

oranges, about 41 percent grapefruit, 12 percent lemons and limes and 3

percent tangerines and other fresh citrus fruits. The United States is

a net exporter of citrus fruits. The U.S. supply of fresh citrus fruits

in 1996 was 6,633 million pounds (= 8,712 + 406--2,485 [production plus

imports minus exports]).

A few countries accounted for the bulk of the U.S. fresh citrus

export market. In Asia, Japan (44 percent), Hong Kong (10 percent), the

Republic of Korea (2.8 percent), Taiwan (2.8 percent), and Singapore

(1.5 percent) together accounted for approximately 60 percent of the

total U.S. export market. Next, exports to Canada were about 25

percent. In Europe, France (3.14 percent), The Netherlands (2.87

percent), and the United Kingdom (1.13 percent) are the major

importers. The small remaining proportion is exported to many other

countries. The United States, as noted above, is not a major importer

of fresh citrus fruits. Major suppliers are Mexico (42 percent), Spain

(29.4 percent), and Australia (20 percent). These countries together

supplied about 91 percent of U.S. fresh citrus imports. Imports of

fresh citrus fruits were valued at about $92 million.

U.S. fresh citrus fruit exports increased at an average growth rate

of 3.1 percent between 1985 and 1996. By fruit, orange exports grew at

an average rate of 4.2 percent and grapefruit by 3.7 percent, while

lime and tangerine exports did not change. On the other hand, exports

of lemons declined by an average rate of 1.1 percent. Since the United

States is the second largest producer of oranges and the largest

producer of grapefruits in the world, the positive export growth rate

in these two commodities is encouraging. Combined with the lower growth

rate of domestic consumption, the importance to producers of growth in

export markets is clear.

Interestingly, imports to the United States increased at an average

annual growth rate of 10 percent during this period. Most of the

imports were from countries in the Southern Hemisphere, where growing

and harvesting seasons are different. Imports are heaviest during the

months when U.S. production and shipments are lowest. There is also a

reciprocal window of opportunity for U.S. producers to step in during

the months when production is low in these countries. The United States

is developing its trade relationship with Argentina, which is one of

few countries with which the United States has a favorable balance of

trade. The United States exported an average of $4,390 million worth of

goods to Argentina while importing goods and services valued at $1,920

million. At present, the United States is exporting approximately

$100,000 worth of citrus fruit to Argentina and importing none.

Worldwide, the United States exported fresh citrus fruits valued at

$704 million in 1996, while it imported only $92 million worth of fresh

citrus fruits. Thus, maintaining competitiveness and creating a

positive trade environment is very important to U.S. citrus producers.

Argentine Citrus Industry

Production

Argentina produced an annual average of 3,726 million pounds of

citrus fruit between 1985 and 1996, with production at about 4,010

million pounds in 1996. Citrus fruit production has increased at an

annual growth rate of about 2.3 percent in Argentina, mostly in the

States of Entre Rios, Tucuman, Misiones, Salta, Corrientes, Buenos

Aires, and Jujuy, which together account for about 93 percent of

production. Three of those States--Jujuy, Salta, and Tucuman--would be

affected by this proposed rule; those States account for 35 percent of

the total Argentine production, or about 1,550 million pounds of citrus

fruit. Nearly 51 percent of Argentine citrus fruit production is

consumed domestically as fresh fruit, 34 percent is processed, and 15

percent is exported.

The annual rate of increase in Argentine citrus production between

1985 and 1996 is attributable mostly to increased lemon production. For

the other citrus varieties, the growth rate was less than 1 percent or

there was no change. However, since the current

[[Page 43122]]

export growth rates are higher than the production growth rates, large

additional export supplies are not expected. Production growth rates

(2.3 percent) were outpaced by export growth rates (6.92 percent) in

Argentina. The export growth rates varied by fruit and ranged between a

0.7 percent annual increase for grapefruit and a 16.9 percent increase

for tangerines.

Citrus Trade

Argentina is one of the major citrus fruit exporters in South

America. It exported 718 million pounds in 1996 and an average of 545

million pounds per year between 1992 and 1996. Major destinations

included The Netherlands (52 percent), France (14 percent), Spain (8

percent), the United Kingdom (10 percent), and Russia (8 percent).

Smaller importers of Argentine citrus include Portugal, Belgium,

Germany, Hong Kong and Saudi Arabia. The major destination for

Argentine fresh citrus fruit is Europe, accounting for nearly 87

percent of exports. Since the majority of the U.S. fresh citrus exports

went to the Far East, the two countries appear to be serving distinct

markets. Using the production and export averages, about 15 percent of

Argentine citrus production is exported. Imports of fresh citrus

accounted for only about 0.06 percent of the utilized total Argentine

citrus supply.

Argentina can be expected to maintain its well-established export

markets, mainly in Europe. Because there have been substantial

investments to cultivate these markets, it is expected that Argentine

producers and exporters will continue to value them. Developing heavy

dependence on a single market, such as the United States, would make

Argentina vulnerable to fluctuations in economic conditions of that

market. Nevertheless, a moderate level of exports to the United States

would provide another potential outlet for the Argentine citrus

industry.

Wholesale Terminal Market Prices

Fresh citrus fruit wholesale prices are lower in Argentina than in

the United States. The weighted annual average wholesale price is about

18 cents per pound (where the weights reflect the respective citrus

fruit variety production percentages). This does not include the

overland transport cost from northwestern Argentina to the south

central coast, the sea freight rate, cold treatment while onboard the

ship, or the tariff rates, which would add about 15 cents per pound to

the average Argentine wholesale price. Wholesale prices in the United

States average 38 cents per pound, or about 20 cents per pound more

than the average Argentine wholesale price. However, by the time the

fresh citrus from Argentina would arrive at U.S. ports, with the

additional costs, the gap would narrow. Current wholesale market prices

in the Montreal terminal markets indicate that the Argentine fresh

citrus fruit sells for about the same price or for slightly more than

the California or Florida varieties. The average (from June through

September) California lemon price was 46 cents per pound in Montreal,

while the average for the Argentine lemons was 50 cents per pound.

Similarly, the average price for California oranges was 40 cents while

oranges from Argentina sold for 42 cents per pound.

Impact on Producers and Consumers

Allowing the importation into the United States of citrus from

Argentina under the conditions described in this proposed rule could

potentially result in losses for citrus producers in the United States,

approximately 96 percent of whom, as noted above, are considered to be

small entities with less than $0.5 million annually in sales. However,

Argentina exports most of its fresh citrus fruit during the summer

months, so citrus from Argentina would not compete with the late fall,

winter, and early spring citrus peak production season in the United

States, thus limiting the impact on U.S. producers, exporters, and

importers of citrus, and on other small entities that depend on citrus

fruit sales. Citrus importers in the United States could be expected to

benefit from the increased availability of citrus fruit, especially

navel oranges, during the time of year when U.S. production is at its

lowest; U.S. consumers of fresh citrus fruits, brokerage houses,

packers, and truckers could also be expected to benefit.

The potential economic effects of those imports would depend upon

the size of the pre-import U.S. supply, pre-import fresh citrus fruit

prices, and the elasticities of demand. Overall, the expected impacts

would be a slight loss for producers and a slight gain for consumers,

due to increased supply and potentially lower prices. The estimated

impacts of introducing imported citrus from Argentina into the U.S.

market are as shown in Table 1.

Table 1.--Importation of Citrus From Argentina: Potential Impact on U.S. Citrus Market (Price Elasticity of

Demand is -0.233)

----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

Imports \1\ (millions of pounds).......... 10 20 30 40 50

Percent change in price................... (0.29) (0.58) (0.87) (1.17) (1.46)

Percent change in quantity \2\............ (0.08) (0.17) (0.25) (0.33) (0.41)

Decrease in producer surplus (millions of

dollars)................................. (7.347) (14.688) (22.023) (29.352) (36.674)

Increase in consumer surplus (millions of

dollars)................................. 7.353 14.710 22.073 29.440 36.813

Total surplus (millions of dollars)....... 0.006 0.022 0.050 0.088 0.139

----------------------------------------------------------------------------------------------------------------

\1\ The projected import totals of 10, 20, 30, 40, and 50 million pounds are based on a 20, 40, 60, 80, and 100

percent diversion, respectively, to the U.S. market of the total expected increase in Argentine citrus exports

to all countries. Between 1985 and 1996, Argentine citrus exports increased by an average of 6.92 percent per

year. Using the 1996 export of 717.8 million pound as a baseline number, the expected increase in Argentine

citrus exports would be 49.67 (=717.8 x 0.0692) million pounds, which we have rounded to 50 million pounds. We

assume a certain proportion of this increase would be directed to the newly accessible U.S. market.

\2\ Decrease in quantity may be due to diversion of fresh citrus fruit to the processing sector as the price of

fresh citrus fruit declines.

Table 1 includes the potential percent change in price, the percent

change in quantity, the resultant producer losses, consumer benefits,

and net benefits. Price decreases as the volume of imported citrus

fruits increases. For example, for a price elasticity of demand -0.233,

given an import level of 10 million pounds of Argentine citrus entering

the U.S. market, the expected price decrease would be 0.29 percent.

(Although there are estimates for oranges and grapefruit, aggregate

elasticity estimates for citrus fruit supply and demand were not

readily available. The data used for estimating these elasticities and

for assessing the impact were obtained from various sources. Citrus

production and export data were obtained from various issues of the FAO

``Production and Trade

[[Page 43123]]

Yearbook,'' from the FAS ``Annual Citrus Report,'' and from Argentine

Embassy sources. U.S. production and trade data were obtained from

various issues of ``Fruit and Tree Nuts: Situation and Outlook

Yearbook.'' Consumer price index, U.S. gross domestic product, and

producer price index data were obtained from the August 1997 issue of

``Survey of Current Business.'' The elasticity of supply and demand are

estimated using a simple log-log model and are 0.284 and -0.233,

respectively.)

In the scenario in which 10 million pounds of citrus would be

exported from Argentina to the United States, U.S. producers would lose

about $7.347 million while U.S. consumers would gain about $7.353

million. The net benefit in this scenario would be about $6,000. At the

opposite extreme, an export level of 50 million pounds (i.e., all of

the anticipated increase in Argentine citrus exports being sent to the

U.S. market rather than to other countries) would result in a price

decrease of about 1.46 percent. Producers would lose about $36.674

million and consumers would gain about $36.813 million, resulting in

net benefit of about $139,000. Additionally, there would be a direct

relationship between producer losses and consumer gains on the one hand

and the quantity of imports on the other hand. Therefore, the larger

the share of imports from Argentina, relative to U.S. domestic supply,

the larger the U.S. producer losses and the larger the U.S. consumer

gains. In all cases, consumer gains would slightly outweigh grower

losses.

The only significant alternative to this proposed rule would be to

make no changes in the regulations, i.e., to continue to prohibit the

importation of grapefruit, lemons, and oranges from Argentina. We have

rejected that alternative because we believe that Argentina has

demonstrated that the citrus-growing areas of the States of Catamarca,

Jujuy, Salta, and Tucuman are free from citrus canker and because we

believe that the systems approach offered by Argentina to prevent the

introduction of other plant pests reduces the risks posed by the

importation of grapefruit, lemons, and oranges to an negligible level.

Maintaining a prohibition on the importation of grapefruit, lemons, and

oranges from the Argentine States of Catamarca, Jujuy, Salta, and

Tucuman in light of those State's demonstrated freedom from citrus

canker would run counter to the United States' obligations under

international trade agreements and would likely be challenged through

the World Trade Organization. Conversely, our proposal to declare the

citrus-growing areas of Catamarca, Jujuy, Salta, and Tucuman free from

citrus canker and allowing the importation of grapefruit, lemons, and

oranges from those States subject to certain conditions would likely

have a beneficial effect on international trade in general, and trade

between the United States and Argentina in particular, by reaffirming

the United States' continuing commitment to using scientifically valid

principles as the basis for regulation.

Under these circumstances, the Administrator of the Animal and

Plant Health Inspection Service has determined that this action would

not have a significant economic impact on a substantial number of small

entities.

Executive Order 12988

This proposed rule would allow the importation of grapefruit,

lemons, and oranges from Argentina under certain conditions. If this

proposed rule is adopted, State and local laws and regulations

regarding grapefruit, lemons, and oranges imported under this rule

would be preempted while the fruit is in foreign commerce. Grapefruit,

lemons, and oranges are generally imported for immediate distribution

and sale to the consuming public, and would remain in foreign commerce

until sold to the ultimate consumer. The question of when foreign

commerce ceases in other cases must be addressed on a case-by-case

basis. If this proposed rule is adopted, no retroactive effect would be

given to this rule, and this rule would not require administrative

proceedings before parties may file suit in court challenging this

rule.

Paperwork Reduction Act

In accordance with section 3507(d) of the Paperwork Reduction Act

of 1995 (44 U.S.C. 3501 et seq.), the information collection or

recordkeeping requirements included in this proposed rule have been

submitted for approval to the Office of Management and Budget (OMB).

Please send written comments to the Office of Information and

Regulatory Affairs, OMB, Attention: Desk Officer for APHIS, Washington,

DC 20503. Please state that your comments refer to Docket No. 97-110-1.

Please send a copy of your comments to: (1) Docket No. 97-110-1,

Regulatory Analysis and Development, PPD, APHIS, suite 3C03, 4700 River

Road Unit 118, Riverdale, MD 20737-1238, and (2) Clearance Officer,

OCIO, USDA, room 404--W, 14th Street and Independence Avenue SW.,

Washington, DC 20250. A comment to OMB is best assured of having its

full effect if OMB receives it within 30 days of publication of this

proposed rule.

This proposed rule would amend the citrus fruit regulations by

recognizing a citrus-growing area within Argentina as being free from

citrus canker and would amend the fruits and vegetables regulations to

allow the importation of grapefruit, lemons, and oranges from the

citrus canker-free area of Argentina under certain conditions. These

proposed changes would provide for the importation into the United

States of grapefruit, lemons, and oranges from Argentina under

conditions designed to prevent the introduction into the United States

of two other diseases of citrus, sweet orange scab and citrus black

spot, and other plant pests.

The proposed program for the importation of grapefruit, lemons, and

oranges from Argentina would require the use of import permits,

phytosanitary certificates, and other information-gathering documents

to help ensure that the fruit has been grown and handled in accordance

with the conditions set forth in the regulations.

We are soliciting comments from the public (as well as affected

agencies) concerning our proposed information collection and

recordkeeping requirements. We need this outside input to help us:

(1) Evaluate whether the proposed information collection is

necessary for the proper performance of our agency's functions,

including whether the information will have practical utility;

(2) Evaluate the accuracy of our estimate of the burden of the

proposed information collection, including the validity of the

methodology and assumptions used;

(3) Enhance the quality, utility, and clarity of the information to

be collected; and

(4) Minimize the burden of the information collection on those who

are to respond, (such as through the use of appropriate automated,

electronic, mechanical, or other technological collection techniques or

other forms of information technology, e.g., permitting electronic

submission of responses).

Estimate of burden: Public reporting burden for this collection of

information is estimated to average .7009 hours per response.

Respondents: Argentine plant health authorities, growers/exporters

of citrus in the citrus canker-free area of Argentina.

Estimated annual number of respondents: 470.

Estimated annual number of responses per respondent: 2.1702.

Estimated annual number of responses: 1,020.

[[Page 43124]]

Estimated total annual burden on respondents: 715. (Due to

rounding, the total annual burden hours may not equal the product of

the annual number of responses multiplied by the average reporting

burden per response.)

Copies of this information collection can be obtained from

Clearance Officer, OCIO, USDA, room 404-W, 14th Street and Independence

Avenue SW., Washington, DC 20250.

List of Subjects

7 CFR Part 300

Incorporation by reference, Plant diseases and pests, Quarantine.

7 CFR Part 319

Bees, Coffee, Cotton, Fruits, Honey, Imports, Incorporation by

reference, Nursery stock, Plant diseases and pests, Quarantine,

Reporting and recordkeeping requirements, Rice, Vegetables.

Accordingly, we propose to amend title 7, chapter III, of the Code

of Federal Regulations as follows:

PART 300--INCORPORATION BY REFERENCE

1. The authority citation for part 300 would continue to read as

follows:

Authority: 7 U.S.C. 150ee, 154, 161, 162 and 167; 7 CFR 2.22,

2.80, and 371.2(c).

2. In Sec. 300.1, paragraph (a), the introductory text would be

revised to read as follows:

Sec. 300.1 Materials incorporated by reference; availability.

(a) Plant Protection and Quarantine Treatment Manual. The Plant

Protection and Quarantine Treatment Manual, which was reprinted

November 30, 1992, and includes all revisions through [date], has been

approved for incorporation by reference in 7 CFR chapter III by the

Director of the Office of the Federal Register in accordance with 5

U.S.C. 552(a) and 1 CFR part 51.

* * * * *

PART 319--FOREIGN QUARANTINE NOTICES

3. The authority citation for part 319 would continue to read as

follows:

Authority: 7 U.S.C. 150dd, 150ee, 150ff, 151-167, 450, 2803, and

2809; 21 U.S.C. 136 and 136a; 7 CFR 2.22, 2.80, and 371.2(c).

Sec. 319.28 [Amended]

4. In Subpart--Citrus Fruit, Sec. 319.28 would be amended as

follows:

a. In paragraph (a)(1), by adding the words ``Argentina (except for

the States of Catamarca, Jujuy, Salta, and Tucuman, which are

considered free of citrus canker),'' immediately after the word

``Seychelles,''.

b. In paragraph (a)(2), by adding the words ``(except as provided

by Sec. 319.56-2f)'' immediately after the word ``Argentina''.

c. In paragraph (a)(3), by adding the words ``(except for the

States of Catamarca, Jujuy, Salta, and Tucuman, which are considered

free of Cancrosis B)'' immediately after the word ``Argentina''.

5. In Subpart--Fruits and Vegetables, a new Sec. 319.56-2f would be

added to read as follows:

Sec. 319.56-2f Administrative instructions governing importation of

grapefruit, lemons, and oranges from Argentina.

Fresh grapefruit, lemons, and oranges may be imported from

Argentina into the United States only under permit and only in

accordance with this section and all other applicable requirements of

this subpart.

(a) Origin requirement. The grapefruit, lemons, or oranges must

have been grown in a grove located in a region of Argentina that has

been determined to be free from citrus canker. The following regions in

Argentina have been determined to be free from citrus canker: The

States of Catamarca, Jujuy, Salta, and Tucuman.

(b) Grove requirements. The grapefruit, lemons, or oranges must

have been grown in a grove that meets the following conditions:

(1) The grove must be registered with the citrus fruit export

program of the Servicio Nacional de Sanidad y Calidad Agroalimentaria

(SENASA).

(2) The grove must be surrounded by a 150-meter-wide buffer area.

No citrus fruit grown in the buffer area may be offered for importation

into the United States.

(3) Any new citrus planting stock used in the grove must meet one

of the following requirements:

(i) The citrus planting stock originated from within a State listed

in paragraph (a) of this section; or

(ii) The citrus planting stock was obtained from a SENASA-approved

citrus stock propagation center.

(4) All fallen fruit, leaves, and branches must be removed from the

ground in the grove and the buffer area before the trees in the grove

blossom. The grove and buffer area must be inspected by SENASA before

blossom to verify that these sanitation measures have been

accomplished.

(5) The grove and buffer area must be treated at least twice during

the growing season with an oil-copper oxychloride spray. The timing of

each treatment shall be determined by SENASA based on its monitoring of

climatic data, fruit susceptibility, and the presence of disease

inoculum. The application of treatments shall be monitored by SENASA to

verify proper application.

(6) The grove and buffer area must be surveyed by SENASA 20 days

before the grapefruit, lemons, or oranges are harvested to verify the

grove's freedom from citrus black spot (Guignardia citricarpa) and

sweet orange scab (Elsinoe australis). The grove's freedom from citrus

black spot and sweet orange scab shall be verified through:

(i) Visual inspection of the grove and buffer area; and

(ii) Laboratory examination of 320 fruits taken from each 200

hectares according to SENASA's randomized sampling protocol.

(c) After harvest. After harvest, the grapefruit, oranges, or

lemons must be handled in accordance with the following conditions:

(1) The fruit must be moved from the grove to the packinghouse in

field boxes or containers of field boxes that are marked to show the

SENASA registration number of the grove in which they were grown. The

identity of the origin of the fruit must be maintained.

(2) During the time that a packinghouse is used to prepare

grapefruit, lemons, or oranges for export to the United States, the

packinghouse may accept fruit only from groves that meet the

requirements of paragraph (b) of this section.

(3) After arriving at the packinghouse, the fruit must be held at

room temperature for 4 days to allow for symptom expression of citrus

black spot in the event that latent infection exists in the fruit.

(4) After the 4-day holding period, the fruit must be inspected by

SENASA to verify its freedom from citrus black spot and sweet orange

scab. The fruit must then be chemically treated as follows:

(i) Immersion in sodium hypochlorite (chlorine) at a concentration

of 200 parts per million;

(ii) Immersion in orthophenilphenate of sodium;

(iii) Spraying with imidazole; and

(iv) Application of 2-4 thiazalil benzimidazole and wax.

(5) Before packing, the treated fruit must again be inspected by

SENASA to verify its freedom from citrus black spot and sweet orange

scab.

(6) The fruit must be packed in clean, new boxes that are marked

with the SENASA registration number of the grove in which the fruit was

grown.

(d) Phytosanitary certificate. Grapefruit, lemons, and oranges

offered for entry into the United States from

[[Page 43125]]

Argentina must be accompanied by a phytosanitary certificate issued by

SENASA that states the grapefruit, lemons, or oranges were produced and

handled in accordance with the requirements of paragraphs (a), (b), and

(c) of this section, and that the grapefruit, lemons, or oranges are

apparently free from citrus black spot and sweet orange scab.

(e) Cold treatment. Due to the presence in Argentina of

Mediterranean fruit fly (Medfly)(Ceratitis capitata) and fruit flies of

the genus Anastrepha, grapefruit, lemons (except smooth-skinned

lemons), and oranges offered for entry from Argentina must be treated

with an authorized cold treatment listed in the Plant Protection and

Quarantine Treatment Manual, which is incorporated by reference at

Sec. 300.1 of this chapter. The cold treatment must be conducted in

accordance with the requirements of Sec. 319.56-2d of this subpart.

(f) Disease detection. If, during the course of any inspection or

testing required by this section or Sec. 319.56-6 of this subpart,

citrus black spot or sweet orange scab is detected on any grapefruit,

lemons, or oranges, the grove in which the fruit was grown or is being

grown shall be removed from the SENASA citrus export program for the

remainder of that year's growing and harvest season, and the fruit

harvested from that grove may not be imported into the United States

from the time of detection through the remainder of that shipping

season.

Done in Washington, DC, this 6th day of August 1998.

Joan M. Arnoldi,

Acting Administrator, Animal and Plant Health Inspection Service.

[FR Doc. 98-21595 Filed 8-11-98; 8:45 am]

BILLING CODE 3410-34-P