[Federal Register Volume 63, Number 169 (Tuesday, September 1, 1998)]
[Proposed Rules]
[Pages 46403-46406]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-23406]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 63, No. 169 / Tuesday, September 1, 1998 / 
Proposed Rules  

[[Page 46403]]


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DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

7 CFR Part 319

[Docket No. 98-035-1]


Importation of Orchids in Growing Media

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Proposed rule.

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SUMMARY: We are proposing to amend our regulations governing the 
importation of plants and plant products to add orchids of the genus 
Phalaenopsis to the list of plants that may be imported in an approved 
growing medium subject to specified growing, inspection, and 
certification requirements. We have assessed the pest risks associated 
with the importation of Phalaenopsis spp. orchids established in 
growing media and have determined that the degree of pest risk is no 
greater than the pest risk associated with the importation of bare-
rooted Phalaenopsis spp. orchids, which may already be imported under 
the regulations. This proposed rule would allow Phalaenopsis spp. 
orchids established in growing media to be imported into the United 
States under certain conditions.

DATES: Consideration will be given only to comments received on or 
before November 2, 1998.

ADDRESSES: Please send an original and three copies of your comments to 
Docket No. 98-035-1, 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. 98-035-1. 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. Peter M. Grosser, Senior Import 
Specialist, Phytosanitary Issues Management Team, PPQ, APHIS, 4700 
River Road Unit 140, Riverdale, MD 20737-1236; (301) 734-6799; fax 
(301) 734-5786; e-mail: Peter.M.G[email protected].

SUPPLEMENTARY INFORMATION:

Background

    The regulations in 7 CFR part 319 prohibit or restrict the 
importation into the United States of certain plants and plant products 
to prevent the introduction of plant pests. The regulations contained 
in ``Subpart--Nursery Stock, Plants, Roots, Bulbs, Seeds, and Other 
Plant Products,'' Secs. 319.37 through 319.37-14 (referred to below as 
the regulations) restrict, among other things, the importation of 
living plants, plant parts, and seeds for propagation.
    Paragraph Sec. 319.37-8(a) of the regulations requires, with 
certain exceptions, that plants offered for importation into the United 
States be free of sand, soil, earth, and other growing media. This 
requirement is intended to help prevent the introduction of plant pests 
that might be present in the growing media; the exceptions to the 
requirement take into account factors that mitigate that plant pest 
risk. Those exceptions, which are found in paragraphs (b) through (e) 
of Sec. 319.37-8, consider either the origin of the plants and growing 
media (paragraph (b)), the nature of the growing media (paragraphs (c) 
and (d)), or the use of a combination of growing conditions, approved 
media, inspections, and other requirements (paragraph (e)).
    That combination approach found in Sec. 319.37-8(e) provides 
conditions under which plants from nine listed genera may be imported 
into the United States established in an approved growing medium. In 
addition to specifying the types of plants that may be imported, 
Sec. 319.37-8(e) also:
     Specifies the types of growing media that may be used;
     Requires plants to be grown in accordance with written 
agreements between the Animal and Plant Health Inspection Service 
(APHIS) and the plant protection service of the country where the 
plants are grown and between the foreign plant protection service and 
the grower;
     Requires the plants to be rooted and grown in a greenhouse 
that meets certain requirements for pest exclusion and that is used 
only for plants being grown in compliance with Sec. 319.37-8(e);
     Restricts the source of the seeds or parent plants used to 
produce the plants, and requires grow-out or treatment of parent plants 
imported into the exporting country from another country;
     Specifies the sources of water that may be used on the 
plants, the height of the benches on which the plants must be grown, 
and the conditions under which the plants must be stored and packaged; 
and
     Requires that the plants be inspected in the greenhouse 
and found free of evidence of plant pests no more than 30 days prior to 
the exportation of the plants.
    A phytosanitary certificate issued by the plant protection service 
of the country in which the plants were grown that declares that the 
above conditions have been met must accompany the plants at the time of 
importation. These conditions have been used successfully to mitigate 
the risk of pest introduction associated with the importation into the 
United States of approved plants established in growing media.
    In 1997, the Government of Taiwan requested that APHIS consider 
amending the regulations to allow orchids of the genus Phalaenopsis--
commonly known as moth orchids--to be imported into the United States 
under the provisions of Sec. 319.37-8(e). Taiwan is the largest 
exporter of Phalaenopsis spp. orchids to the United States, exporting 
most of them as bare-rooted plants under the provisions of Sec. 319.37-
8(a). Several other countries, notably Thailand and The Netherlands, 
also export orchids, including Phalaenopsis spp. orchids, to the United 
States. In its request, the Taiwanese Government specifically requested 
that we allow Phalaenopsis spp. orchids to be imported into the United 
States established in sphagnum moss, which is one of the approved 
growing media listed in Sec. 319.37-8(e)(1).
    The regulations in Sec. 319.37-8(g) provide that a request such as 
that made

[[Page 46404]]

by Taiwan to allow the importation of additional taxa of plants 
established in growing media will be evaluated by APHIS using specific 
pest risk evaluation standards. That analysis is conducted to determine 
the plant pest risks associated with each requested plant article and 
to determine whether or not APHIS will propose to allow the requested 
plant article established in growing media to be imported into the 
United States. The pest risk evaluation, the standards for which are 
set forth in Sec. 319.37-8 (g)(1) through (g)(4), involves collecting 
commodity information, cataloging quarantine pests, conducting 
individual pest risk assessments, and determining an overall estimation 
of risk based on a compilation of the component estimates.
    After receiving Taiwan's request to allow the importation of 
Phalaenopsis spp. orchids established in growing media, APHIS conducted 
the required pest risk analysis in accordance with the standards 
described above. (The analysis is described in a qualitative, pathway-
initiated pest risk assessment titled ``Importation of Moth Orchid 
(Phalaenopsis spp.) Seedlings from Taiwan in Growing Media into the 
United States,'' copies of which are available through the person 
listed under FOR FURTHER INFORMATION CONTACT.) The pest risk assessment 
identified several arthropod pests (Planococcus minor, Spodoptera 
litura, and Spodoptera sp.), mollusks (Acusta (Bradybaena) tourranensis 
and Bradybaena sp.), and fungi (Colletotrichum phalaenopsidis, 
Cylindrosporium phalaenopsidis, Phomopsis orchidophila, and Sphaerulina 
phalaenopsidis) as the plant pests most likely to travel with the plant 
and having the greatest potential for economic damage. However, the 
pest risk assessment acknowledged that the risk presented by these 
plant pests is consistent with any propagative epiphytic orchid 
materials and pest associations. Further, it is important to note that 
those plant pest risks were identified in the absence of the mitigative 
effects of the requirements of Sec. 319.37-8(e), which are designed to 
establish and maintain a pest-free production environment and ensure 
the use of pest-free seeds or parent plants. Given that, the pest risk 
assessment concluded that it is likely that the risk of Phalaenopsis 
spp. orchids, or any other epiphytic orchid, grown in sphagnum moss (an 
approved growing medium) under modern conditions (i.e., the conditions 
required by Sec. 319.37-8(e)) is no greater than that posed by 
epiphytic orchid material currently allowed entry as bare-rooted plants 
or on other approved epiphytic growing media (tree fern slabs, coconut 
husks, or coconut fiber).
    Based on the conclusions of the pest risk assessment, we have 
determined that the importation of Phalaenopsis spp. orchids from any 
country--not just Taiwan--under the conditions required by Sec. 319.37-
8(e) would pose no greater plant pest risk than is posed by the 
importation of epiphytic orchid material currently allowed entry from 
any country as bare-rooted plants under Sec. 319.37-8(a) or established 
on other approved epiphytic growing media (tree fern slabs, coconut 
husks, or coconut fiber) under Sec. 319.37-8(d). On the basis of that 
determination, we are proposing to amend the regulations in 
Sec. 319.37-8(e) by adding the genus Phalaenopsis to the list of genera 
that may be imported established in approved growing media. This 
proposed change would allow Phalaenopsis spp. orchids to be imported 
into the United States established in approved growing media from any 
country provided the orchids were produced, handled, and imported in 
accordance with the requirements of Sec. 319.37-8(e) and are 
accompanied at the time of importation by a phytosanitary certificate 
issued by the plant protection service of the country in which the 
plants were grown that declares that those requirements have been met.

Miscellaneous

    As part of this proposed rule, we are also proposing to renumber an 
incorrect footnote reference in Sec. 319.37-8.

Executive Order 12866 and Regulatory Flexibility Act

    This proposed rule has been reviewed under Executive Order 12866. 
The rule has been determined to be not significant for the purposes of 
Executive Order 12866 and, therefore, has not been reviewed by the 
Office of Management and Budget.
    In accordance with 5 U.S.C. 603, we have performed an Initial 
Regulatory Flexibility Analysis, which is set out below, regarding the 
impact of this proposed rule on small entities. Based on the 
information we have, there is no basis to conclude that adoption of 
this proposed rule would result in any significant economic impact on a 
substantial number of small entities. However, we do not currently have 
all of the data necessary for a comprehensive analysis of the effects 
of this proposed rule on small entities. Therefore, we are inviting 
comments on potential effects. In particular, we are interested in 
determining the number and kind of small entities that may incur 
benefits or costs from the implementation of this proposed rule.
    Under the Federal Plant Pest Act (7 U.S.C. 150aa-150jj) and the 
Plant Quarantine Act (7 U.S.C. 151-165 and 167), the Secretary of 
Agriculture is authorized to regulate the importation of plants and 
plant products to prevent the introduction of injurious plant pests.
    This proposed rule would amend the regulations to add orchids of 
the genus Phalaenopsis to the list of plants that may be imported in an 
approved growing medium subject to specified growing, inspection, and 
certification criteria. This proposal follows the completion of our 
analysis of the pest risks associated with the importation of 
Phalaenopsis spp. orchids established in growing media and our 
determination that the degree of pest risk is no greater than the pest 
risk associated with the importation of bare-rooted Phalaenopsis spp. 
orchids. This proposed rule would allow Phalaenopsis spp. orchids 
established in approved growing media to be imported into the United 
States under certain conditions.
    Economic data on potted orchid plants in general is scarce, and 
specific data on potted Phalaenopsis spp. orchids in particular is 
virtually nonexistent. Nevertheless, certain conclusions and inferences 
regarding the potential economic impact of the proposed rule are 
possible.

Domestic Production

    The National Agricultural Statistics Service (NASS) of the U.S. 
Department of Agriculture (USDA) publishes data on the value and 
production of potted orchid plants in the United States. However, that 
data is of limited usefulness for this analysis because it: (1) Shows 
only aggregate data for all types of orchid plants, and does not offer 
specific data for Phalaenopsis spp. orchids as a separate orchid type; 
(2) is available only for the year 1996; (3) includes only the larger 
producers, i.e., those with annual gross sales of $100,000 or more; and 
(4) includes only producers in 36 States.
    The NASS data shows that there were 169 growers of potted orchid 
plants in the United States in 1996. These 169 growers sold a combined 
8.2 million potted orchids that year, with an equivalent wholesale 
value of $42.7 million, for an average of $252,781 per grower. Of the 
8.2 million potted orchids sold, 5.1 million (62 percent) were less 
than 5 inches in diameter. The average wholesale price of pots less 
than 5 inches in diameter was $3.90; the average wholesale price for 
pots 5 inches or more in diameter was $7.30.

[[Page 46405]]

The 8.2 million pots were produced in a 6.3 million sq. ft. area, an 
average of 36,982 sq. ft. for each of the 169 growers. Three States--
California, Florida, and Hawaii--accounted for 55 percent of the 
growers and 92 percent of the pots sold in 1996. Florida alone 
accounted for about 25 percent of the growers and about 50 percent of 
the pots sold (USDA, NASS, ``Floriculture Crops, 1996 Summary''). The 
American Orchid Society (AOS) does not collect statistical data on the 
production of potted Phalaenopsis spp. orchids in the United States, 
but it estimates that about half of all potted orchid plants produced 
in the United States fall within that genus.

Imports and Exports

    The USDA's Foreign Agriculture Service (FAS) collects and publishes 
data on U.S. imports and exports of orchid plants. The FAS data is also 
of limited usefulness for the purposes of this analysis because it, 
too, shows only aggregate data for all types of orchid plants without 
separating out figures for separate orchid types such as Phalaenopsis.
    As noted in the background section of this proposed rule, most of 
the Phalaenopsis spp. orchids currently imported into the United States 
arrive as bare-rooted plants. We expect that complying with the 
growing, inspection, and treatment requirements of Sec. 319.37-8(e) 
would increase costs for orchid producers in exporting countries. In 
addition, the cost of shipping orchids in growing media would be higher 
than the cost of shipping bare-rooted plants. Therefore, it is 
reasonable to expect that Phalaenopsis spp. orchids would be exported 
to the United States established in growing media only if the higher 
production and shipping costs were offset by the savings that would 
accompany the elimination of the costs associated with shipping the 
plants bare-rooted and then preparing them for sale after their arrival 
(i.e., de-potting the plants in the country of origin for importation 
purposes, then re-potting the plants in the United States for sale 
purposes).
    The FAS data shows that the United States is a net importer of 
orchid plants. In 1996, the United States imported 223 metric tons of 
orchid plants worth $4.3 million; Taiwan, Thailand, and The Netherlands 
together accounted for 93 percent of those imports. In 1997, 289 metric 
tons of orchid plants worth $6.6 million were imported into the United 
States, with almost 90 percent of those imports originating in either 
Taiwan (171 metric tons), Thailand (49 metric tons), or The Netherlands 
(33 metric tons). In comparison, the United States exported 52 metric 
tons of orchid plants in 1996 and 112 metric tons of orchid plants in 
1997. The value of the 1997 U.S. exports was $235,330.

Effects on Small Entities

    The Regulatory Flexibility Act requires that agencies consider the 
economic impact of rule changes on small businesses, organizations, and 
governmental jurisdictions. Those entities potentially affected by this 
proposed rule are growers, retailers, and importers of Phalaenopsis 
spp. orchids.
    Domestic orchid growers sell their plants primarily at wholesale to 
general merchandise retailers (e.g., hardware or home improvement 
stores) and to specialty retailers such as specialty florists and 
landscapers. Domestic producers would be adversely affected if they 
lose plant sales to cheaper foreign imports. Currently, Phalaenopsis 
spp. orchids grown in Taiwan are sold in the United States at or below 
the price of domestically produced Phalaenopsis spp. orchids, according 
to the AOS. This proposed rule would likely enhance the competitive 
positions of the countries currently exporting orchids to the United 
States if, as discussed above, it serves to reduce the costs that are 
incurred in preparing imported, bare-rooted Phalaenopsis spp. orchids 
for sale in the United States.
    Domestic growers are already competing with imports of bare-rooted 
Phalaenopsis spp. orchids, so the magnitude of any adverse economic 
impact would depend on the extent to which they rely on potted 
Phalaenopsis spp. orchids as a source of their overall revenue, the 
extent to which their sales of potted Phalaenopsis spp. orchids are 
displaced by imports, and the amount of any increase in the overall 
level of orchid plant imports. Most orchid producers grow only orchids, 
and many of those--especially the larger producers--grow only one type 
of orchid. The number of producers who grow potted Phalaenopsis spp. 
orchids exclusively, i.e., those who could be affected most by the rule 
change, is unknown. However, many producers appear to be in that 
category, since the AOS estimates that about half of all potted orchid 
plants produced by U.S. growers are of the genus Phalaenopsis.
    The amount of lost sales would depend, in turn, on the price 
differential between domestic and foreign plants and on the volume of 
plant imports, both of which are unknown at this time. If the price 
differential in favor of imports was not significant, it is conceivable 
that some retailers would continue to purchase their plants from 
domestic growers, especially if those growers provided superior service 
or other non-price advantages. The volume of imports is significant 
because it could be too small to satisfy the demand of all retailers, 
leaving some with no other option but to purchase plants from domestic 
growers.
    The availability of cheaper foreign imports would likely benefit 
plant retailers and importers. Retailers would benefit because they 
could pass the savings from lower wholesale prices on to their 
customers, creating an environment that would lead to increased sales 
volume and revenue. Importers would benefit from the income that the 
increased business activity would produce.
    The number of commercial growers of potted Phalaenopsis spp. 
orchids in the United States is unknown, but there are at least 300 to 
400 producers who grow one or more of the various types of potted 
orchid plants, since that is the number of growers who advertise their 
products through the AOS. The number of retailers who sell potted 
Phalaenopsis spp. orchids is also unknown, as is the number of 
importers. Nevertheless, it is reasonable to assume that most of the 
entities potentially affected by this proposed rule are small, at least 
by U.S. Small Business Administration's (SBA) standards. This 
assumption is based on composite data for providers of the same and 
similar services in the United States. In 1992, the per-farm average 
gross receipts for all 38,569 U.S. farms in Standard Industrial 
Classification (SIC) 0181 (``Ornamental Floriculture and Nursery 
Products,'' which includes potted orchid producers) was $174,431, well 
below the SBA's small entity threshold of $0.5 million for those farms. 
Similarly, the 1993 per-firm average gross receipts for all 9,867 U.S. 
firms in SIC 5261 (``Retail Nurseries, Lawn and Garden Supply Stores,'' 
which includes plant retailers) was $688,898, well below the SBA's 
small entity threshold of $5 million. In 1993, there were 3,877 U.S. 
firms in SIC 5193 (``Flowers, Nursery Stock, and Florists' Supplies,'' 
which includes plant importers), and 98 percent of those firms had 
fewer than 100 employees, the SBA's small entity threshold.

Alternatives Considered

    Two alternatives to this proposed rule were considered: (1) To make 
no changes in the regulations and (2) to limit the scope of the 
proposed rule to Phalaenopsis spp. orchids from Taiwan. We rejected the 
first alternative--making no change in the regulations--after 
determining that the degree of pest risk associated with the 
importation of Phalaenopsis spp. orchids in growing

[[Page 46406]]

media under the conditions set forth in Sec. 319.37-8(e) is no greater 
than the pest risk associated with the importation of bare-rooted 
Phalaenopsis spp. orchids. Because there is no greater risk involved, 
we have no plant pest-based rationale for rejecting the Taiwanese 
request that we consider allowing the importation of Phalaenopsis spp. 
orchids in growing media. Similarly, we rejected the second alternative 
of limiting the scope of the proposal to Phalaenopsis spp. orchids from 
Taiwan because our pest risk assessment indicated that Phalaenopsis 
spp. orchids produced in accordance with the growing, inspection, and 
certification requirements of the regulations could be safely imported 
from any country, regardless of specific pest associations.

Executive Order 12988

    This proposed rule would allow the importation of Phalaenopsis 
orchids established in growing media under certain conditions. If this 
proposed rule is adopted, State and local laws and regulations 
regarding Phalaenopsis orchids imported under this rule would be 
preempted while the plants are in foreign commerce. Some nursery stock 
articles are 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

    This proposed rule contains no new information collection or 
recordkeeping requirements under the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501 et seq.).

List of Subjects in 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 are proposing to amend 7 CFR part 319 as follows:

PART 319--FOREIGN QUARANTINE NOTICES

    1. 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. 319.37-8  [Amended]

    2. In Sec. 319.37-8, paragraph (e), the introductory text of the 
paragraph would be amended by removing the footnote reference 11 
immediately after the word ``Nidularium,'' and adding the footnote 
reference 10 in its place, and by adding the word ``Phalaenopsis,'' 
immediately after the word ``Peperomia,''.

    Done in Washington, DC, this 25th day of August 1998.
Alfred S. Elder,
Acting Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 98-23406 Filed 8-31-98; 8:45 am]
BILLING CODE 3410-34-P