[Federal Register Volume 64, Number 35 (Tuesday, February 23, 1999)]
[Proposed Rules]
[Pages 8755-8761]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-4417]


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

DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

9 CFR Part 94

[Docket No. 97-079-1]
RIN 0579-AA91


Importation of Pork and Pork Products From Yucatan and Sonora, 
Mexico

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: We are proposing to amend the regulations concerning the 
importation of animal products to relieve certain restrictions on the 
importation of pork and pork products from the Mexican State of 
Yucatan. Currently, because of the existence of hog cholera in Mexico, 
pork and pork products from Yucatan must be heated or cured and dried 
to certain specifications to be eligible for entry into the United 
States. This proposal would establish new conditions for the 
importation of fresh and processed pork and pork products from Yucatan 
into the United States and would also provide for the movement through 
areas where hog cholera may exist of pork and pork products from 
Yucatan in transit to the United States. We are also proposing to amend 
the regulations that provide for the importation of fresh pork from the 
Mexican State of Sonora to also allow the importation of pork products 
from Sonora and to modify the import conditions for Sonoran pork and 
pork products so that those conditions parallel the import conditions 
proposed for pork and pork products from Yucatan. These proposed 
amendments would provide for the importation of pork products from 
Sonora and for the in-transit movement of Sonoran pork and pork 
products through areas where hog cholera may exist and would make it 
clear that pork and pork products from Sonora must be derived from 
swine slaughtered at federally inspected slaughter plants.

DATES: Consideration will be given only to comments received on or 
before April 26, 1999.

ADDRESSES: Please send an original and three copies of your comments to 
Docket No. 97-079-1, Regulatory Analysis and Development, PPD, APHIS, 
suite 3CO3, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please 
state that your comments refer to Docket No. 97-079-1. 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: Dr. John Cougill, Senior Staff 
Veterinarian, Products Program, National Center for Import and Export, 
VS, APHIS, 4700 River Road Unit 40, Riverdale, MD 20737-1231, (301) 
734-3399.

SUPPLEMENTARY INFORMATION:

Background

    The Animal and Plant Health Inspection Service (APHIS) of the U.S. 
Department of Agriculture (USDA) regulates the importation of animals 
and animal products into the United States to guard against the 
introduction of animal diseases not currently present or prevalent in 
this country. The regulations pertaining to the importation of animals 
and animal products are set forth in the Code of Federal Regulations 
(CFR), title 9, chapter I, subchapter D (9 CFR parts 91 through 99).
    Until recently, the regulations in parts 91 through 99 governed the 
importation of animals and animal products according to the recognized 
animal disease status of the exporting country. In general, if a 
disease occurred anywhere within a country's borders, the entire 
country was considered to be affected with the disease, and 
importations of animals or animal products from anywhere in the country 
were regulated accordingly. However, international trade agreements 
entered into by the United States--specifically, the North American 
Free Trade Agreement and the General Agreement on Tariffs and Trade--
require APHIS to recognize regions, rather than only countries, as well 
as levels of risk, for the purpose of regulating the importation of 
animals and animal products into the United States. Consequently, on 
October 28, 1997, we published in the Federal Register a final rule (62 
FR 56000-56026, Docket No. 94-106-9, effective November 28, 1997) that 
established procedures for recognizing regions and levels of risk for 
the purpose of regulating the importation of animals and animal 
products. In that rule, we also established procedures by which a 
region may request permission to export animals and animal products to 
the United States under specified conditions, based on the region's 
disease status.

[[Page 8756]]

    On the same date, we also published a policy statement (62 FR 
56027-56033, Docket No. 94-106-8) that explained that we will evaluate 
such requests on a case-by-case basis by analyzing the level of disease 
risk involved. Levels of risk exist upon a continuum. However, we 
established five benchmark categories--negligible, slight, low, 
moderate, and high--to give foreign regions a general idea of where 
they fit upon the risk continuum. According to our policy, once we have 
established the level of disease risk associated with the unrestricted 
importation of a particular type of animal or animal product, we will 
determine the import conditions needed to reduce that risk to a 
negligible level. Because of the number of potential variables and the 
vast number of possible combinations of those variables in assessing 
the risk of the unrestricted importation of animals and animal products 
from a region, the precise combination of measures necessary to reduce 
the risk of disease introduction to a negligible level will likely vary 
from region to region depending on the commodities to be imported and 
the diseases of concern.
    The factors that we will consider in determining the level of risk 
associated with unrestricted importation of a particular type of animal 
or animal product from a region are:
    (1) The authority, organization, and infrastructure of the 
veterinary services organization in the region.
    (2) The type and extent of disease surveillance in the region--
e.g., is it passive and/or active; what is the quantity and quality of 
sampling and testing?
    (3) Diagnostic laboratory capabilities.
    (4) Disease status--is the disease agent known to exist in the 
region? If ``yes,'' at what prevalence? If ``no,'' when was the most 
recent diagnosis?
    (5) The extent of an active disease control program, if any, if the 
agent is known to exist in the region.
    (6) The vaccination status of the region. When was the last 
vaccination? What is the extent of vaccination if it is currently used, 
and what vaccine is being used?
    (7) Disease status of adjacent regions.
    (8) The degree to which the region is separated from regions of 
higher risk through physical or other barriers.
    (9) The extent to which movement of animals and animal products is 
controlled from regions of higher risk, and the level of biosecurity 
regarding such movements.
    (10) Livestock demographics and marketing practices in the region.
    (11) Policies and infrastructure for animal disease control in the 
region--i.e., emergency response capacity.
    The regulations in 9 CFR part 94 pertain to, among other things, 
the importation of meat and other animal products into the United 
States. Currently, Sec. 94.20 allows fresh (chilled or frozen) pork 
from Sonora, Mexico, to be imported if: The pork is meat from swine 
that have been born, raised, and slaughtered in Sonora; the pork has 
not been in contact with pork from regions other than those listed in 
Sec. 94.9(a) as regions where hog cholera is not known to exist; and an 
authorized official of Mexico certifies on the foreign meat inspection 
certificate (required by 9 CFR 327.4) that the above conditions have 
been met.
    We are proposing to amend Sec. 94.20 to (1) expand the importation 
of pork products from Sonora, (2) allow pork and pork products from 
Yucatan, Mexico, and (3) amend some of the provisions pertaining to 
pork from Sonora so that the same import requirements apply to pork and 
pork products from both Sonora and Yucatan, Mexico.

Our Proposal

    In June 1995, the Government of Mexico officially requested that 
the United States recognize the Mexican State of Yucatan as free of hog 
cholera. In October 1996, a team of APHIS veterinarians conducted a 
site visit to verify that Yucatan was free of hog cholera and had the 
veterinary infrastructure, disease control programs, diagnostic 
capabilities, and surveillance programs necessary to prevent a 
recurrence of the disease. The site visit confirmed the information 
presented in the request by the Mexican Government. Copies of the APHIS 
site visit report may be obtained by contacting the person listed under 
FOR FURTHER INFORMATION CONTACT. The APHIS team also determined that 
the Yucatan swine industry and Mexican agricultural officials were 
exclusively interested in the exportation of pork and pork products and 
not live swine to the United States.
    Based on the information presented to APHIS by the Government of 
Mexico and our site visit to Yucatan, we have established the following 
facts, which correspond with the factors listed previously for 
determining the risk associated with unrestricted importation of a 
particular commodity from a region:
    (1) In Mexico, animal health functions are carried out by officials 
at the Federal level, who set policy, and by officials at the State 
level, who carry out program operations. The success of all disease 
eradication or control programs in Mexico largely depends on the 
relationship between these two levels of government and between 
governmental officials and the livestock industry. In Yucatan, a unique 
collaborative relationship exists between the pork producer 
associations and the State and Federal animal health officials. The 
success of the hog cholera eradication program in Yucatan has been 
largely due to the dedication and commitment of the industry and its 
willingness to work with animal health officials. In addition, State 
and Federal laws, regulations, policies, and infrastructure in Yucatan 
and Mexico appear to be adequate to restrict movements of swine and 
swine products into Yucatan from any regions of Mexico where hog 
cholera may exist.
    (2) Prior to Mexico's declaration of Yucatan as free of hog cholera 
in April 1995, Yucatan State officials conducted an initial serological 
survey from January through March 1995 to verify the State's hog-
cholera-free status. Yucatan maintained active surveillance on its 
commercial and small, private ``backyard'' swine populations during 
1996 and 1997. We have reviewed the sampling methodology used and are 
generally satisfied with it.
    (3) Laboratory and diagnostic capabilities are sufficient and meet 
the standards of the International Office of Epizootics.
    (4) and (5) The last case of hog cholera in Yucatan was reported in 
1982, and Mexico declared the State free of the disease in April 1995.
    (6) Vaccination for hog cholera in Yucatan was discontinued in 
1993.
    (7) and (8) Yucatan is bordered only by two Mexican States and the 
Gulf of Mexico. The State of Quintana Roo, which adjoins Yucatan to the 
south and southeast, was declared free of hog cholera in 1996. The 
State of Campeche, which adjoins Yucatan to the south and southwest, 
was declared free of hog cholera in December 1997. Very little swine 
production occurs in either Campeche or Quintana Roo.
    (9) Yucatan strictly controls the inter-and intrastate movement of 
livestock, poultry, and livestock and poultry products into and through 
the State. Trade and travel through the maritime port and international 
airport are strictly monitored, as is vehicular movement within the 
State. Commercial vehicles with agricultural cargo from Quintana Roo or 
Campeche must present proper health documentation for the cargo or 
entry is denied. In addition, all vehicles entering Yucatan from 
Campeche are inspected. (Quintana Roo is largely a tourist State and 
has little commercial

[[Page 8757]]

swine production, so vehicles from Quintana Roo are not routinely 
inspected.) Pork products produced in States of lower health status 
than that of Yucatan may be imported only if the products meet time and 
temperature processing requirements and originate from a slaughter 
plant approved and inspected by the Government of Mexico.
    (10) Commercial swine production in Yucatan is concentrated among 
approximately 200 producers, who collectively own about 65,000 sows. 
Three producers alone own 65 percent of these sows, all of which are 
housed in highly integrated operations similar to those found in the 
United States. Such fully integrated operations in Yucatan implement 
good biosecurity measures at all levels, from parent herds to 
processing plants. While the number of backyard herds in Yucatan is 
dwindling, they still constitute a sizable population, and biosecurity 
measures at these operations vary. Live hogs are imported into Yucatan 
only from hog-cholera-free States and regions, and most of Yucatan's 
replacement breeding stock originates in the United States.
    (11) State and Federal laws, regulations, policies, and 
infrastructure in Yucatan and the rest of Mexico appear to be adequate 
to maintain surveillance and control of hog cholera and to eradicate 
hog cholera rapidly in the event of an outbreak in the State of 
Yucatan.
    The findings just described are described in further detail in a 
qualitative risk assessment that we conducted in accordance with the 
regionalization final rule and policy statement discussed previously. 
Our qualitative risk assessment concerning the importation of pork and 
pork products from federally inspected slaughtering establishments in 
Yucatan may be obtained by contacting the person listed under FOR 
FURTHER INFORMATION CONTACT. The risk assessment indicated that the 
importation of pork and pork products from federally inspected 
slaughtering establishments in Yucatan, Mexico, would present a 
negligible risk of introducing hog cholera into the United States.
    Based on the finding of negligible risk, we are proposing to allow 
the importation of pork and pork products from Yucatan, Mexico. 
However, we are proposing to allow these importations to occur only 
under certain conditions, which are set out below, to help prevent the 
possibility that pork or pork products from swine raised in regions of 
Mexico other than Yucatan or Sonora could be exported to the United 
States via Yucatan. We are proposing to amend the import conditions for 
pork from Sonora at Sec. 94.20 to provide the same import conditions 
for pork and pork products from both Sonora and Yucatan. We want to 
prevent the following possibilities: That swine from regions of Mexico 
other than Sonora or Yucatan could be moved to Yucatan or Sonora for 
slaughter, processing, and export to the United States; that pork or 
pork products from other regions could be moved to Yucatan or Sonora 
for export to the United States; or that, once leaving Yucatan or 
Sonora, pork and pork products from Yucatan or Sonora could be 
commingled with pork or pork products from other regions of Mexico in 
transit to the United States. We believe that the proposed import 
conditions would provide a higher degree of safety against the 
occurrence of any of these scenarios than the current requirements 
listed in Sec. 94.20. Following the list of import conditions is our 
basis for them.

Proposed Conditions

    1. The pork or pork product must be from swine that were born and 
raised in Sonora or Yucatan and slaughtered in Sonora or Yucatan at a 
federally inspected slaughter plant under the direct supervision of a 
full-time salaried veterinarian of the Government of Mexico, and the 
slaughter plant must be approved to export pork and pork products to 
the United States in accordance with 9 CFR 327.2.
    2. If processed in any manner, the pork or pork product must be 
processed at a federally inspected processing plant in Sonora or 
Yucatan under the direct supervision of a full-time salaried 
veterinarian of the Government of Mexico.
    3. The pork or pork product must not have been in contact with pork 
or pork products from any State in Mexico other than Sonora or Yucatan 
or from any other region not listed in Sec. 94.9(a) as a region where 
hog cholera is not known to exist.
    4. The foreign meat inspection certificate for the pork or pork 
product (required by 9 CFR 327.4) must be signed by a full-time 
salaried veterinarian of the Government of Mexico. The certificate must 
include statements that certify the above conditions have been met. The 
certificate must also show the seal number on the shipping container if 
a seal is required (see below).
    5. In addition, if the pork or pork product is going to transit any 
State in Mexico other than Sonora or Yucatan or any other region not 
listed in Sec. 94.9(a) as a region where hog cholera is not known to 
exist, a full-time salaried veterinarian of the Government of Mexico 
must apply serially numbered seals to the containers carrying the pork 
or pork products at the federally inspected slaughter or processing 
plant in Sonora or Yucatan, and the seal numbers must be recorded on 
the foreign meat inspection certificate.
    6. Prior to its arrival in the United States, the shipment of pork 
or pork products must not have been in any State in Mexico other than 
Sonora or Yucatan or in any other region not listed in Sec. 94.9(a) 
unless the pork or pork products have remained under seal until arrival 
at the U.S. port and either (1) the numbers on the seals match the 
numbers on the foreign meat inspection certificate or (2) if the 
numbers on the seals do not match the numbers on the foreign meat 
inspection certificate, an APHIS representative at the port of arrival 
is satisfied that the pork or pork products were not contaminated 
during movement to the United States.

Basis for Proposed Conditions

    We are proposing to require that the pork and pork products come 
only from swine slaughtered at federally inspected slaughter plants in 
Sonora or Yucatan because such plants handle only swine that were born 
and raised in Sonora or Yucatan in establishments that practice strict 
biosecurity measures. Therefore, this proposed requirement would serve 
as a safeguard against the possibility that pork or pork products from 
swine raised in backyard farms in Sonora or Yucatan, where biosecurity 
measures are variable, could be exported to the United States. Although 
Sec. 94.20 does not currently include this proposed requirement, all 
pork from Sonora has come exclusively from federally inspected 
slaughtering plants.
    We are proposing that processed pork or pork products from Sonora 
or Yucatan come only from federally inspected processing plants in 
Sonora or Yucatan because those plants have been found to meet the 
requirements of the USDA's Food Safety and Inspection Service and have 
been approved to export pork and pork products to the United States in 
accordance with 9 CFR part 327. Further, those plants are under the 
direct supervision of full-time salaried veterinarians of the 
Government of Mexico.
    The proposed requirement that the pork and pork products must not 
have been in contact with pork or pork products from any State in 
Mexico other than Yucatan or Sonora, or from regions other than those 
listed in Sec. 94.9(a), is intended to ensure that the pork and pork 
products were not exposed to pork or pork products from a region with a

[[Page 8758]]

greater risk of hog cholera. These requirements are the same as those 
currently in place for pork from Sonora, except that they would allow 
commingling of pork and pork products from Sonora and Yucatan.
    We are proposing to allow the pork and pork products to transit 
other regions not listed in Sec. 94.9(a) en route to the United States 
if the pork and pork products are shipped in containers sealed with 
serially numbered seals at the federally inspected slaughtering plant 
or processing plant in Sonora or Yucatan and the containers arrive in 
the United States with the seals intact. The seal numbers would have to 
be listed on the foreign meat inspection certificate that accompanies 
the shipment. This precaution would ensure that the pork and pork 
products have remained in closed containers during transit to the 
United States and have not become contaminated.
    This proposed rule would also allow the importation of the pork and 
pork products in containers bearing seals with different numbers than 
those listed on the foreign meat inspection certificate if our port 
inspectors can determine that an official of the Government of Mexico 
opened the original seals and then applied new seals. Section 94.20 
does not currently provide for such in-transit movements under seal for 
pork from Sonora. However, we now realize the need to allow some 
flexibility in shipping and recognize that valid reasons may exist for 
the containers to have been opened and for the seal numbers to have 
been changed in transit. For example, many flights from Yucatan to the 
United States stop in Mexico City, and the containers may have to be 
opened for inspection by Mexican customs officials.
    Prior to the final rule that established Sec. 94.20 and allowed the 
importation of fresh (chilled or frozen) pork from Sonora (see 62 FR 
25439-25443, Docket 94-106-6, May 9, 1997, effective July 8, 1997), 
pork and pork products from all of Mexico were prohibited entry into 
the United States unless they were processed in accordance with 
Sec. 94.9. Section 94.9 requires that pork and pork products from 
regions where hog cholera is considered to exist meet stringent 
conditions to ensure the pork's freedom from hog cholera. Among other 
things, the pork or pork product must be fully cooked, or deboned and 
heated to a specified temperature, or cured and dried to specifications 
in the regulations. Because Sec. 94.20 applies specifically to the 
importation of fresh (chilled or frozen) pork from Sonora, Mexico, any 
processed pork from Sonora must meet the conditions of Sec. 94.9 to be 
eligible for importation into the United States. However, as stated 
previously, we believe that any type of pork or pork product from 
Sonora or Yucatan imported under the conditions specified in this 
proposed rule would present a negligible risk of introducing hog 
cholera. Therefore, this proposed rule would allow the importation from 
Sonora and Yucatan of processed pork that does not meet the conditions 
of Sec. 94.9.

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. A summary of the analyses required by 
Executive Order 12866 and the Regulatory Flexibility Act are set forth 
below. Copies of the entire analyses may be obtained by contacting the 
person listed under FOR FURTHER INFORMATION CONTACT.
    The hazard of concern regarding the proposed importation of pork 
and pork products from the Yucatan region of Mexico is hog cholera. A 
qualitative risk assessment prepared by APHIS indicates that the 
expected costs of disease introduction are likely to be zero, as the 
proposed imports pose a low probability of causing a hog cholera 
outbreak in the United States. APHIS also conducted a quantitative risk 
assessment based only on serological survey data of commercial swine 
operations in the Yucatan. Due to modeling constraints, the 
quantitative risk assessment could not include some of the information 
most pertinent to risk evaluation, such as the fact that an outbreak of 
hog cholera has not occurred in the Yucatan since 1982. However, the 
quantitative model is useful in that it provides an upper limit on the 
estimated probability of a hog cholera outbreak and acknowledges that 
the actual risk is likely to be lower. Expected costs associated with 
the proposed trade are calculated by multiplying the estimates from the 
quantitative model of the likelihood of an outbreak and the estimated 
economic consequences of an outbreak.
    In accordance with Executive Order 12866, APHIS has compared the 
benefits of the increased trade to the expected costs resulting from 
disease outbreak. The benefits are calculated as the net change in 
consumer and producer surplus that results from the estimated volume of 
trade. Assuming that, among other things, Yucatan pork would be a 
perfect substitute for domestic pork, it is estimated that the net 
benefits of Yucatan pork imports would be positive. Allowing 
importations of Yucatan pork would cause U.S. farm gate prices to 
decrease marginally, benefitting U.S. consumers.
    Commercial swine production in Yucatan is concentrated among 
approximately 200 producers, who collectively own about 65,000 sows 
(1996 data). Three producers alone own 65 percent of these sows, all of 
which are housed in highly integrated operations similar to those found 
in the United States. Most of the remaining commercial producers are 
communal producers who operate small shared commercial herds with 15-40 
sows. The number of ``backyard'' herds in Yucatan is decreasing.
    Yucatan generates 7-8 percent of Mexico's pork production. The 
State is a net exporter of pork, with 65 percent of its pork going to 
the tourist centers in the neighboring State of Quintana Roo, 
population centers in and around Mexico City, and Japan. Pork intended 
for export is slaughtered at the State's only federally inspected 
slaughter facility. At full capacity, this facility can slaughter up to 
1,000 head per day, with a maximum annual production of 10,000 metric 
tons of pork.
    Based on existing Yucatan hog production and slaughter capacity, it 
is expected that Yucatan producers could export between 200 and 10,000 
metric tons of fresh and frozen pork to the United States per year. The 
high-volume scenario is based on the maximum output of the federally 
inspected slaughter facility and assumes that all 10,000 metric tons 
produced there would be shipped to the United States. Because this 
scenario is unlikely, we also evaluated more realistic scenarios of 
1,000 and 200 metric tons. The most likely amount of pork imported into 
the United States from Yucatan would probably be between these two 
amounts. Therefore, the regulatory impact analysis summarized here 
examines the potential economic impact of such imports under low- (200 
metric tons per year), medium- (1,000 metric tons per year), and high- 
(10,000 metric tons per year) volume scenarios.
    Results of computer simulation iterations for the low-volume 
simulations indicate positive net benefits in 90 percent of the 
iterations run. Results of the medium-volume simulations indicate 
positive net benefits in 85 percent of the iterations run. Results from 
the high-volume scenario indicate positive net benefits in 75 percent 
of the iterations run. In the absence of disease (when likelihood

[[Page 8759]]

estimates are zero), the annual net benefits of trade for the low-, 
medium-, and high-volume scenarios are estimated, in 1997 dollars, as 
$6,478, $32,429, and $329,011, respectively. Therefore, based on these 
calculations, positive net benefits would result from any of the 
scenarios. The likelihood of introducing hog cholera and its associated 
biological and economic consequences are sufficiently low as to warrant 
allowing the proposed trade. It should be noted that the low-volume 
scenario is considered by far the most likely; as stated previously, 
the high-volume scenario is considered extremely unlikely.

Initial Regulatory Flexibility Analysis

    In accordance with 21 U.S.C. 111, the Secretary of Agriculture is 
authorized to promulgate regulations to prevent the introduction or 
dissemination of any contagious, infectious, or communicable disease of 
animals from a foreign country into the United States.
    This proposed rule would amend the regulations to relieve certain 
restrictions on the importation of pork and pork products from the 
Yucatan by establishing new conditions for the importation of fresh and 
processed pork and pork products from Yucatan into the United States 
and would also provide for the movement of pork and pork products from 
Yucatan through areas where hog cholera may exist while in transit to 
the United States. This proposed rule would also amend the regulations 
regarding the importation of fresh pork from Sonora to allow the 
importation of pork products from Sonora and to modify the import 
conditions for Sonoran pork and pork products so that those conditions 
parallel the import conditions proposed for pork and pork products from 
Yucatan. These proposed amendments would provide for the importation of 
pork products from Sonora and for the in-transit movement of Sonoran 
pork and pork products through areas where hog cholera may exist and 
would make it clear that pork and pork products from Sonora must be 
derived from swine slaughtered at federally inspected slaughter plants.
    Over the past several decades, the U.S. pork industry has 
experienced enormous structural change, which mirrors the overall trend 
toward ``concentration'' in U.S. agriculture. According to the 1992 
Census of Agriculture (the most recent census available at the time 
this analysis was performed), the shift toward fewer but larger farms 
has been dramatic: From 1969 to 1992, hog sales rose roughly 23 
percent, while the number of hog farms decreased by about 70 percent. 
During that same time period, the average-sized hog farm increased from 
138 head per farm to 588 head per farm, and production became 
increasingly more concentrated among larger producers. In 1992, for 
example, roughly 6 percent of U.S. hog farms held over 50 percent of 
U.S. hog inventory. The pork processing industry is also characterized 
by a decreasing number of companies, operating increasingly large, 
capital-intensive processing and packing plants that are dependent on 
high volumes of raw product and that begin to realize economies of size 
at about 4 million hogs per year.
    The potential economic impacts of the proposed importation of pork 
and pork products from the Yucatan region of Mexico are dependent on a 
number of factors, such as where the products would be consumed in the 
United States. While it is currently unknown exactly how Yucatan pork 
would enter U.S. marketing and distribution channels and where it would 
ultimately be consumed, it is likely that the pork would be shipped by 
ocean vessel from Progreso, Yucatan, to a U.S. gulf port, most likely 
in Texas or Florida, perhaps in Louisiana. If Yucatan pork were 
purchased by a local retail chain or wholesaler in those States, it 
would likely be consumed locally. If it were purchased by a national 
wholesaler, it could be consumed anywhere in the United States. For the 
purposes of this analysis, we examined both the possibility that 
Yucatan pork would be consumed locally in selected Gulf Coast States 
and also the possibility that it would enter national distribution 
channels.
    The Small Business Administration (SBA) defines small hog farms 
(Standard Industrial Code 0213) as those earning less than $500,000 in 
annual receipts. Industry experts suggest that only those hog 
operations with inventories in excess of 2,000 animals would earn 
$500,000 or more in sales annually. However, because the 1992 Census of 
Agriculture combines all hog farms with more than 1,000 animals into 
one category, for the purposes of this analysis, we counted operations 
with more than 1,000 animals as large and operations with fewer than 
1,000 as small.
    Despite the trend toward fewer and larger hog farms described 
above, according to the 1992 Census of Agriculture, fewer than 6 
percent of U.S. hog and pig operations held inventories in excess of 
1,000 animals (the average U.S. small hog farm held 160 head of stock 
and had annual sales of roughly $27,000). So, by SBA standards, at 
least 94 percent of all U.S. hog farms (191,347) were small entities in 
1992. In Texas, Florida, and Louisiana, roughly 99 percent of hog farms 
were small entities; in those States, small hog farmers held generally 
22-40 head per farm and earned $3,000-$6,000 annually. In 1992, there 
were at least 179,478 small hog farms nationwide, with 9,017 being in 
Texas, Florida, and Louisiana.
    The segment of the U.S. swine industry most likely to be first 
exposed to hog cholera from imported pork products would be swine 
operations that use human food waste as a feed source. Because the hog 
cholera virus remains infective in pork products for a long time unless 
the products are cooked, the disease could be transmitted to swine fed 
discarded uncooked pork. Therefore, waste-feeding swine operations 
would most directly bear the risk associated with the unlikely 
importation of contaminated pork products from Yucatan. The risk to the 
remainder of the U.S. swine industry would be through possible spread 
from these initially infected waste-feeding operations, which must be 
licensed by USDA.
    In 1994, there were about 2,000 licensed waste-feeding 
establishments in the continental United States, and this number has 
not changed greatly since then. The majority of these premises were 
located in Texas (871), Arkansas (248), Florida (309), and North 
Carolina (178). Based on a 1994 APHIS survey, 1,173 waste-feeding 
operations in the 48 conterminous states contained a total of about 
114,000 pigs. Waste-feeding operations are predominantly small. Based 
on the 1994 survey, the median number of swine per waste-feeding 
premises was 34 (average of 97). Only 10 of the premises had more than 
1,000 swine.
    Whether we consider the United States as a whole or just selected 
Gulf Coast States, the overwhelming majority of hog farms are small 
entities, so it is reasonable to conclude that a substantial number of 
small entities could be affected by this proposed rule.

Economic Impact on Small Entities

    There is no general rule that sets threshold or trigger levels for 
``significant economic impact;'' however, it has been suggested that an 
economic effect that equals a small business' profit margin--5 to 10 
percent of annual sales--could be considered significant.
    We used estimated changes in producer surplus together with the 
Census of Agriculture data on hog inventories and hog sales to develop

[[Page 8760]]

very rough estimates of the potential economic impact of the proposed 
rule on small hog farmers across the United States and in selected Gulf 
Coast States. To do this, we assumed that losses in producer surplus 
would be shared equally among all hog farms in the geographic area 
under consideration (either the entire United States or selected Gulf 
Coast States). We then compared per-farm changes in producer surplus 
with small farms' annual sales to determine whether the economic 
impacts approach the 5-10 percent threshold.
    If Yucatan pork entered national distribution channels and, 
therefore, impacts were shared by all U.S. producers, there would not 
be a significant economic impact on small entities no matter which 
level (low, medium, or high volume) of imports is assumed. Producer 
surplus losses per U.S. hog farm would range from $0.45 to $22.05 per 
year, and these amounts are substantially less than 1 percent of the 
typical small hog farmer's annual sales in every scenario.
    If, under the high-volume scenario, the maximum 10,000 metric tons 
were imported annually from the Yucatan and consumed locally in 
Louisiana, Texas, and Florida, there could be a significant economic 
impact on small pork producers in those States. In this case, a subset 
of small hog farmers with considerably fewer head per farm and 
considerably less in annual revenues than the average small U.S. hog 
farm would face the most significant impacts of an increase in imports 
resulting from the proposed trade. The producer surplus losses per 
small hog farm in those States would range from $9.60 to $479.52. The 
larger amount is equivalent to almost 8.14 percent of the typical small 
hog farmer's annual sales and, therefore, could be considered a 
significant impact.
    In conclusion, it is clear that the proposed rule could affect a 
substantial number of small hog farms because, as of the 1992 Census of 
Agriculture, almost all hog farms meet the SBA size criteria for small 
entity. However, it is unclear whether the rule would have a 
significant economic impact on small hog farms. The latter issue 
depends on how much Yucatan pork is imported and where it is consumed. 
Under the most extreme assumptions (highest volume imports and limited 
geographic area affected), small hog producers in selected Gulf Coast 
States could experience losses in producer surplus equaling 
approximately 8 percent of annual sales. Such losses would meet 
``significant economic impact'' criteria. Under the most likely import 
volume scenario (1,000 metric tons per year), the proposed rule would 
not have a significant economic impact on small hog farmers either 
nationwide or in selected Gulf Coast States.

Alternatives Considered

    In developing this proposed rule, we considered either (1) making 
no changes to the existing requirements for the importation of fresh 
and processed pork and pork products from Yucatan and Sonora, (2) 
proposing to allow the importation of pork and pork products from 
Yucatan and Sonora under conditions different from those proposed, or 
(3) proposing to allow the importation of pork and pork products from 
Yucatan and Sonora under the conditions proposed in this document.
    We rejected the first alternative because it would continue to 
restrict the importation of pork and pork products from Yucatan under 
the same conditions that apply to the remainder of Mexico. Because we 
have determined that pork and pork products could be imported under 
specified conditions from Yucatan and Sonora with negligible hog 
cholera risk, taking no action would not be scientifically defensible 
and would be contrary to trade agreements entered into by the United 
States. We also rejected the second alternative, which would allow the 
importation of pork and pork products from Yucatan and Sonora under 
conditions other than those proposed. In developing the proposed 
criteria for the importation of such pork and pork products, we 
determined that conditions less stringent than those proposed would 
present a risk of the introduction of hog cholera into the United 
States via pork or pork products from regions of Mexico other than 
Sonora or Yucatan. We further concluded that more stringent conditions 
would be unnecessarily restrictive. We consider the proposed conditions 
to be both effective and necessary in ensuring that the risk of hog 
cholera introduction via pork and pork product imports from Yucatan and 
Sonora remains at a negligible level.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. If this proposed rule is adopted: (1) All State 
and local laws and regulations that are inconsistent with this rule 
will be preempted; (2) no retroactive effect will be given to this 
rule; and (3) administrative proceedings will not be required before 
parties may file suit in court challenging this rule.

National Environmental Policy Act

    An environmental assessment and finding of no significant impact 
have been prepared for this proposed rule. The assessment provides a 
basis for the conclusion that the importation of pork and pork products 
from Sonora and Yucatan, Mexico, under the conditions specified in this 
proposed rule would not present a significant risk of introducing or 
disseminating hog cholera disease agents into the United States and 
would not have a significant impact on the quality of the human 
environment. Based on the finding of no significant impact, the 
Administrator of the Animal and Plant Health Inspection Service has 
determined that an environmental impact statement need not be prepared.
    The environmental assessment and finding of no significant impact 
were prepared in accordance with: (1) The National Environmental Policy 
Act of 1969, as amended (NEPA) (42 U.S.C. 4321 et seq.), (2) 
regulations of the Council on Environmental Quality for implementing 
the procedural provisions of NEPA (40 CFR parts 1500-1508), (3) USDA 
regulations implementing NEPA (7 CFR part 1b), and (4) APHIS' NEPA 
Implementing Procedures (7 CFR part 372).
    Copies of the environmental assessment and finding of no 
significant impact are available for public inspection 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 copies are requested to 
call ahead on (202) 690-2817 to facilitate entry into the reading room. 
In addition, copies may be obtained by writing to the individual listed 
under FOR FURTHER INFORMATION CONTACT.

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. 97-079-1. 
Please send a copy of your comments to: (1) Docket No. 97-079-1, 
Regulatory Analysis and Development, PPD, APHIS, suite 3C03, 4700 River 
Road Unit 118, Riverdale, MD 20737-1238, and (2) Clearance Officer, 
OCIO, USDA,

[[Page 8761]]

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 regulations to relieve certain 
restrictions on the importation of pork and pork products from Yucatan 
by establishing new conditions for the importation of fresh and 
processed pork and pork products from Yucatan into the United States 
and would also provide for the movement of pork and pork products from 
Yucatan through areas where hog cholera may exist while in transit to 
the United States. This proposed rule would also amend the regulations 
that provide for the importation of fresh pork from Sonora to allow the 
importation of pork products from Sonora and to modify the import 
conditions for Sonoran pork and pork products so that those conditions 
parallel the import conditions proposed for pork and pork products from 
Yucatan. These proposed amendments would provide for the importation of 
pork products from Sonora and for the in-transit movement of Sonoran 
pork and pork products through areas where hog cholera may exist and 
would make it clear that pork and pork products from Sonora must be 
derived from swine slaughtered at federally inspected slaughter plants.
    Implementing this proposed rule would necessitate the use of two 
paperwork collection activities, i.e., the completion of a foreign meat 
inspection certificate and the placing of seals on shipping containers.
    We are asking OMB to approve our use of these information 
collections in connection with our program to import pork and pork 
products from the Mexican States of Yucatan and Sonora.
    We are soliciting comments from the public (as well as affected 
agencies) concerning this proposed information collection activity. 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 proposed 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 proposed 
collection of information is estimated to average 0.575 hours per 
response.
    Respondents: Full-time, salaried veterinarians of the Government of 
Mexico.
    Estimated annual number of respondents: 10.
    Estimated annual number of responses per respondent: 4.
    Estimated annual number of responses: 40.
    Estimated total annual burden on respondent: 23.
    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 in 9 CFR Part 94

    Animal diseases, Imports, Livestock, Meat and meat products, Milk, 
Poultry and poultry products, Reporting and recordkeeping requirements.

    Accordingly, we propose to amend 9 CFR part 94 as follows:

PART 94--RINDERPEST, FOOT-AND-MOUTH DISEASE, FOWL PEST (FOWL 
PLAGUE), EXOTIC NEWCASTLE DISEASE, AFRICAN SWINE FEVER, HOG 
CHOLERA, AND BOVINE SPONGIFORM ENCEPHALOPATHY: PROHIBITED AND 
RESTRICTED IMPORTATIONS

    1. The authority citation for part 94 would continue to read as 
follows:

    Authority: 7 U.S.C. 147a, 150ee, 161, 162, and 450; 19 U.S.C. 
1306; 21 U.S.C. 111, 114a, 134a, 134b, 134c, 134f, 136, and 136a; 31 
U.S.C. 9701; 42 U.S.C. 4331 and 4332; 7 CFR 2.22, 2.80, and 
371.2(d).

    2. Section 94.20 would be revised to read as follows:


Sec. 94.20  Importation of pork and pork products from Sonora and 
Yucatan, Mexico.

    Notwithstanding any other provisions of this part, pork and pork 
products from the States of Sonora and Yucatan, Mexico, may be imported 
into the United States under the following conditions:
    (a) The pork or pork product is from swine that were born and 
raised in Sonora or Yucatan and slaughtered in Sonora or Yucatan at a 
federally inspected slaughter plant that is under the direct 
supervision of a full-time salaried veterinarian of the Government of 
Mexico and that is approved to export pork products to the United 
States in accordance with Sec. 327.2 of this title.
    (b) If processed, the pork or pork product was processed in either 
Sonora or Yucatan in a federally inspected processing plant that is 
under the direct supervision of a full-time salaried veterinarian of 
the Government of Mexico.
    (c) The pork or pork product has not been in contact with pork or 
pork products from any State in Mexico other than Sonora or Yucatan or 
from any other region not listed in Sec. 94.9(a) as a region where hog 
cholera is not known to exist.
    (d) The foreign meat inspection certificate accompanying the pork 
or pork product (required by Sec. 327.4 of this title) includes a 
statement certifying that the requirements in paragraphs (a), (b) (if 
applicable), and (c) of this section have been met and, if applicable, 
a list of the numbers of the seals required by paragraph (e)(1) of this 
section.
    (e) The shipment of pork or pork products has not been in any State 
in Mexico other than Sonora or Yucatan or in any other region not 
listed in Sec. 94.9(a) as a region where hog cholera is not known to 
exist en route to the United States, unless:
    (1) The pork or pork product arrives at the U.S. port of entry in 
shipping containers bearing intact, serially numbered seals that were 
applied at the federally inspected slaughter or processing plant in 
either Sonora or Yucatan by a full-time salaried veterinarian of the 
Government of Mexico, and the seal numbers correspond with the seal 
numbers listed on the foreign meat inspection certificate; or
    (2) The pork or pork product arrives at the U.S. port of entry in 
shipping containers bearing seals that have different numbers than the 
seal numbers on the foreign meat inspection certificate, but, upon 
inspection of the hold, compartment, or container and all accompanying 
documentation, an APHIS representative is satisfied that the pork or 
pork product containers were opened and resealed en route by an 
appropriate official of the Government of Mexico and the pork or pork 
product was not contaminated or exposed to contamination during 
movement from Sonora or Yucatan to the United States.

    Done in Washington, DC, this 18th day of February 1999.
Joan M. Arnoldi,
Acting Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 99-4417 Filed 2-22-99; 8:45 am]
BILLING CODE 3410-34-P