[Federal Register Volume 64, Number 98 (Friday, May 21, 1999)]
[Proposed Rules]
[Pages 27711-27717]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-12885]
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Proposed Rules
Federal Register
________________________________________________________________________
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. 64, No. 98 / Friday, May 21, 1999 / Proposed
Rules
[[Page 27711]]
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DEPARTMENT OF AGRICULTURE
Animal and Plant Health Inspection Service
9 CFR Part 94
[Docket No. 98-034-1]
RIN 0579-AA96
Importation of Poultry Meat and Other Poultry Products From
Sinaloa and Sonora, Mexico
AGENCY: Animal and Plant Health Inspection Service, USDA.
ACTION: Proposed rule.
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SUMMARY: We are proposing to amend the regulations concerning the
importation of animal products to relieve certain restrictions on the
importation of poultry meat and other poultry products from the Mexican
States of Sinaloa and Sonora. Currently, because of the existence of
exotic Newcastle disease in Mexico, poultry meat and other poultry
products from Sinaloa and Sonora must be cooked, sealed, and packaged,
to certain specifications, to be eligible for importation into the
United States. This proposal would establish new, less restrictive
conditions for the importation of poultry meat and other poultry
products from Sinaloa and Sonora into the United States. This action is
based on a risk assessment indicating that such importations would
present a negligible risk of introducing exotic Newcastle disease into
the United States.
DATES: Consideration will be given only to comments received on or
before July 20, 1999.
ADDRESSES: Please send an original and three copies of your comments to
Docket No. 98-034-1, 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. 98-034-1. 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. Michael David, Senior Staff
Veterinarian, National Center for Import and Export, VS, APHIS, 4700
River Road, Unit 39, Riverdale, MD 20737, (301) 734-5034.
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.
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.
[[Page 27712]]
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 part 94 pertain to, among other things, the
importation of meat and other animal products into the United States.
Currently, Sec. 94.6 governs the importation of carcasses, or parts or
products of carcasses, of poultry, game birds, or other birds, from
regions where exotic Newcastle disease (END) is considered to exist.
Specifically, the regulations allow carcasses, or parts or products of
carcasses of poultry, to be imported from regions where END is
considered to exist for consumption if: (1) The poultry is packed in
hermetically sealed containers and cooked by a commercial method after
such packing to produce articles that are shelf stable without
refrigeration, (2) the poultry is thoroughly cooked and appears to have
a thoroughly cooked appearance throughout upon APHIS inspection at the
port of arrival, or, (3) the poultry is imported under permit after
APHIS determines the importation as such will not constitute a risk of
introducing or disseminating END into the United States.
We are proposing to establish a new Sec. 94.22, as discussed later
in this document, to allow the importation of poultry meat and other
poultry products from the States of Sinaloa and Sonora, Mexico, under
conditions less restrictive than provided in Sec. 94.6.
Our Proposal
In June 1994, the Government of Mexico officially requested that
the United States recognize the Mexican States of Sinaloa and Sonora as
free of END. In February 1997, a team of APHIS veterinarians conducted
a site visit to verify that Sinaloa and Sonora were free of END 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 poultry industries of Sinaloa and Sonora and Mexican agricultural
officials were exclusively interested in the exportation of poultry
meat and other poultry products and not live poultry to the United
States.
Based on the information presented to APHIS by the Government of
Mexico and our site visit to Sinaloa and Sonora, 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 Sinaloa and
Sonora, a collaborative relationship exists between the poultry
producer associations and State and Federal animal health officials.
The success of the END eradication program in Sinaloa and Sonora 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
Sinaloa, Sonora, and Mexico appear to be adequate to restrict movements
of poultry and poultry products into Sinaloa and Sonora from any
regions of Mexico where END may exist.
2. Prior to Mexico's declaration of Sinaloa and Sonora as free of
END in May 1993, Sinaloa and Sonora State officials conducted
serological surveys of all their commercial and backyard poultry flocks
to verify the State's END-free status. These surveys were repeated
again in 1997 and 1998. Sinaloa and Sonora have maintained active
surveillance on commercial poultry populations since 1993, with 100
percent of commercial populations under active surveillance in 1997.
All samples taken from commercial poultry populations since 1993 have
tested negative for END. Small, private ``backyard'' poultry
populations have been systematically sampled for END since 1997. All
``backyard'' flock samples taken since that time have also tested
negative for END.
3. Samples from commercial farms in Sinaloa and Sonora and backyard
flocks in Sinaloa are monitored for diseases at a Federally approved
laboratory in Ciudad Obregon, Sonora. Samples from backyard flocks in
Sinaloa are monitored at the central diagnostic laboratory outside
Mexico City. Both laboratories have the capability to detect Newcastle
disease either seriologically or by virus isolation.
4. The last case of END in Sinaloa or Sonora was reported in 1989,
and Mexico declared both States free of the disease in 1993. The States
of Chihuahua, Durango, and Baja California, which border Sinaloa and
Sonora, have been recognized by Mexico as free of END. The State of
Nayarit, which borders Sinaloa to the south, is the only State that
borders Sinaloa that has not been recognized by Mexico as free of END.
However, the last outbreak of END in Nayarit was reported in 1989.
5. Before 1992, Mexico's END eradication program was primarily
focused on movement control. Surveillance and testing were passive,
with samples submitted from reported suspect cases. The program was
strengthened in 1992, when poultry producers enrolled their flocks in a
national END certification program. During the last 3 years, the
eradication program has been further strengthened by the participation
of additional States, and by the initiation of active surveillance in
the declared free States. States that move into the ``eradication''
phase of the campaign (no cases of END for at least 12 months) must
establish an emergency response team.
6. Sinaloa and Sonora use the same vaccination method practiced in
the United States: only lentogenic (low path) strains of Newcastle
disease are used.
7. Sonora is bounded on the west by the Gulf of California, on the
east by the Sierra Madre mountain ranges and the State of Chihuahua, on
the north by the United States and the Mexican State of Baja
California, and on the south by the State of Sinaloa. Baja California,
Chihuahua, and Sinaloa have each been declared free of END by the
Government of Mexico and have active disease surveillance and animal
control programs as described above.
Sinaloa is bounded on the west by the Gulf of California, on the
east by the States of Chihuahua and Durango and the Sierra Madre
mountain ranges, on the north by the State of Sonora, and on the south
by the State of Nayarit. Both Durango and Chihuahua have been
recognized by the Government of Mexico as free of END. Nayarit has not
been officially recognized as free from END, but has not had an
outbreak of END since 1989.
8. The only adjacent area of higher risk for Sinaloa is the State
of Nayarit. Man-made controls are in place along the Sinaloa-Nayarit
border, and were judged to be adequate by the site-visit
[[Page 27713]]
team to prevent the reintroduction of END into Sinaloa or Sonora.
9. Sinaloa and Sonora strictly control the inter- and intrastate
movement of livestock, poultry, and livestock and poultry products into
and through each State. Trade and travel through the maritime ports and
international airports are strictly monitored, as is vehicular movement
within each State. Commercial vehicles with agricultural cargo must
present proper sanitary documentation for the cargo or entry is denied.
In addition, all vehicles entering Sinaloa and Sonora from Nayarit are
inspected. Poultry products produced in States of lower health status
than that of Sinaloa and Sonora may be imported only if the products
meet time and temperature processing requirements and originate from a
slaughter plant approved and inspected by a full-time salaried
veterinarian of the Government of Mexico.
10. Commercial poultry production in Sinaloa is concentrated among
a handful of producers on about 65 premises, who collectively own about
3 million laying hens and 28 million broiler chickens. One company
alone owns 90 percent of the State's broiler chickens, and this
company, along with two others, owns 50 percent of Sinaloa's laying
hens. Broiler chickens in Sinaloa are vaccinated against Newcastle
disease when they are 12 days old and are housed in highly integrated
operations similar to those found in the United States. Such fully
integrated operations in Sinaloa implement excellent biosecurity
measures at all levels of production.
Commercially produced broilers in Sinaloa are processed in the only
Federally approved inspection plant in the State, which processes an
average of 120,000 birds per day. The integrated company that owns and
operates the plant does not process birds from any other source.
Sinaloa produces sufficient broilers and table eggs to meet its
consumption demands. Surplus meat and eggs (about 70 percent of egg
production and 30 percent of meat production) are exported to other
Mexican States.
Commercial poultry production in Sonora consists of one company,
which maintains only six production farms. Broiler chickens are
processed at an integrated company-owned plant, which processes 10,000
birds per day, and the meat is sold locally or is shipped to cities in
northern Baja California.
Sonora also produces about 15 percent of the national production of
table eggs.
The number of backyard flocks in Sinaloa and Sonora constitutes a
small population, and biosecurity measures at these operations are
virtually nonexistent. However, no auctions for trading backyard
poultry exist in Sinaloa or Sonora, as backyard poultry is maintained
for personal consumption. (Therefore, as described later in this
document, we are proposing to allow the importation of poultry meat and
other poultry products that are derived only from poultry that were
raised in Sinaloa or Sonora and slaughtered in Sinaloa or Sonora at a
federally inspected slaughter plant. The slaughter plant would have to
be operated under the direct supervision of a full-time salaried
veterinarian of the Government of Mexico and approved by USDA's Food
Safety and Inspection Service (FSIS).)
11. State and Federal laws, regulations, policies, and
infrastructure in Sinaloa and Sonora and the rest of Mexico appear to
be adequate to maintain surveillance and control of END and to
eradicate END rapidly in the event of an outbreak in the States of
Sinaloa or Sonora.
These findings are described in further detail in a qualitative
risk assessment that we prepared in accordance with the regionalization
final rule and policy statement discussed previously. Our qualitative
risk assessment concerning the importation of poultry meat and other
poultry products from Federally inspected slaughtering establishments
in Sinaloa and Sonora may be obtained by contacting the person listed
under FOR FURTHER INFORMATION CONTACT. The risk assessment indicated
that the importation of poultry meat and other poultry products from
federally inspected slaughtering establishments in Sinaloa and Sonora,
Mexico, would present a negligible risk of introducing END into the
United States.
Based on the finding of negligible risk, we are proposing to
relieve restrictions on the importation of poultry meat and other
poultry products from Sinaloa and Sonora, Mexico. However, we are
proposing to allow the poultry meat and other poultry products to be
imported only under certain conditions, to help prevent the possibility
that poultry meat and other poultry products from poultry raised in
regions of Mexico other than Sinaloa or Sonora could be exported to the
United States via Sinaloa or Sonora. We want to prevent the following
possibilities: That poultry from regions of Mexico other than Sinaloa
or Sonora could be moved to Sinaloa or Sonora for slaughter,
processing, and export to the United States; that poultry meat or other
poultry products from other regions could be moved to Sinaloa or Sonora
for export to the United States; or that, once leaving Sinaloa or
Sonora, poultry meat or other poultry products from Sinaloa or Sonora
could be commingled with poultry meat or other poultry products from
other regions of Mexico in transit to the United States. We believe
that the proposed import conditions would provide protection against
the occurrence of any of these scenarios. Following the list of import
conditions is our basis for them.
Proposed Conditions
1. The poultry meat or other poultry products must be derived from
poultry that were born and raised in Sinaloa or Sonora and slaughtered
in Sinaloa or Sonora 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 poultry meat and other poultry products to the United States in
accordance with 9 CFR 381.196.
2. If processed in any manner, the poultry meat or other poultry
products must be processed at a Federally inspected processing plant in
Sinaloa or Sonora under the direct supervision of a full-time salaried
veterinarian of the Government of Mexico.
3. The poultry meat or other poultry products may not have been in
contact with poultry from any State in Mexico other than Sinaloa and
Sonora or from any other region not listed in Sec. 94.6 as a region
where END is not known to exist.
4. The foreign meat inspection certificate for the poultry meat or
other poultry products (required by FSIS under 9 CFR 381.197) 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 poultry meat or other poultry products are
going to transit any State in Mexico other than Sinaloa or Sonora or
any other region not listed in Sec. 94.6 as a region where END is not
known to exist en route to the United States, a full-time salaried
veterinarian of the Government of Mexico must apply serially numbered
seals to the containers carrying the poultry meat or other poultry
products at the Federally inspected slaughter or processing plant in
Sinaloa or Sonora, and the seal numbers must be recorded on the foreign
meat inspection certificate.
[[Page 27714]]
6. Prior to its arrival in the United States, the shipment of
poultry meat or other poultry products may not have been in any State
in Mexico other than Sinaloa or Sonora or in any other region not
listed in Sec. 94.6 unless the poultry meat or poultry 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 poultry meat or poultry
products were not contaminated during movement to the United States.
Basis for Proposed Conditions
We are proposing to require that the poultry meat and other poultry
products come only from poultry slaughtered at Federally inspected
slaughter plants in Sinaloa and Sonora that are approved to export
poultry meat and other poultry products to the United States in
accordance with 9 CFR 381.196. Such plants only accept poultry for
slaughter if it is raised under adequate biosecurity for commercial
sale. This proposed requirement would serve as an additional safeguard
against the possibility that poultry meat or other poultry products
from poultry raised in backyard farms could be exported to the United
States.
We are proposing that processed poultry meat or other poultry
products from Sinaloa and Sonora come only from Federally inspected
processing plants in Sinaloa and Sonora because those plants must meet
FSIS requirements in order to be approved to export poultry meat or
other poultry products to the United States in accordance with 9 CFR
381.195 through 381.209. Further, those plants are under the direct
supervision of full-time salaried veterinarians of the Government of
Mexico.
The proposed requirement that the poultry meat and other poultry
products may not have been in contact with poultry from any State in
Mexico other than Sinaloa or Sonora, or from regions other than those
listed in 94.6, is intended to ensure that the poultry meat and other
poultry products were not exposed to END.
We are proposing to allow the poultry meat and other poultry
products to transit other regions not listed in Sec. 94.6 en route to
the United States if the poultry meat and other poultry products are
shipped in containers sealed with serially numbered seals at the
Federally inspected slaughtering plant or processing plant in Sinaloa
or Sonora 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 poultry meat and other poultry 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 poultry
meat and other poultry 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. We realize the need to allow some flexibility in shipping and
recognize that valid reasons may exist for the opening of containers
and for the changing of numbers in transit. For example, many flights
from Sinaloa and Sonora to the United States stop in Mexico City, and
the containers may have to be opened for inspection by Mexican customs
officials.
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.
In accordance with 5 U.S.C. 603, we have performed an Initial
Regulatory Flexibility Analysis, which is summarized below, regarding
the impact of this proposed rule on small entities. This analysis also
serves as our cost-benefit analysis under Executive Order 12866. Based
on the information we have, there is no basis to conclude that this
rule will 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, especially in the southwestern
border states, that may incur benefits or costs from the implementation
of this proposed rule.
In accordance with 21 U.S.C. 111, the Secretary of Agriculture is
authorized to promulgate regulations to prevent the introduction or
dissemination of the contagion 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 poultry meat and other poultry
products from the States of Sinaloa and Sonora, Mexico, by establishing
new conditions for the importation of poultry meat and other poultry
products from Sinaloa and Sonora into the United States.
Currently, no poultry slaughter facilities in the States of Sinaloa
or Sonora are approved to export poultry meat or other poultry products
to the United States by the Food Safety and Inspection Service (FSIS)
of the U.S. Department of Agriculture. Poultry processing facilities in
Sinaloa and Sonora will need FSIS approval prior to exporting poultry
to the United States. Further, based on the following analysis, we
anticipate that if and when Mexican facilities receive FSIS approval to
export poultry meat or other poultry products to the United States, the
economic effect of those imports on U.S. producers and processors will
be minimal.
As part of our analysis, we compared the expected benefits of
poultry imports from Sinaloa and Sonora to the expected costs resulting
from a possible disease outbreak. 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 an outbreak of END in the United States. The
hazard of concern regarding these potential imports is exotic Newcastle
disease (END).
The benefits of allowing poultry imports from Sinaloa and Sonora
under less restrictive conditions are calculated as the net change in
consumer and producer surplus that results from the estimated volume of
trade. Assuming that, among other things, poultry meat and other
poultry products from Sinaloa and Sonora would be a perfect substitute
for domestic poultry meat and other poultry products, it is estimated
that the net benefits of the proposed imports would be positive.
Allowing importations of poultry meat and other poultry products from
Sinaloa and Sonora would cause U.S. farm gate prices to decrease
marginally, benefiting U.S. consumers.
Our economic analysis examines the potential economic effects of
such imports under low- (100 metric tons per year), medium- (1,000
metric tons per year), and high- (5,000 metric tons per year) volume
scenarios. We chose these levels because 5,000 metric tons is the
highest volume of poultry meat Mexico has ever exported to the world.
Further,
[[Page 27715]]
recently, there have been years when Mexico has exported no poultry
meat. Therefore, we used the above import level scenarios based on
Mexico's poultry export history,
For the low-volume scenario, consumer surplus is estimated to
increase by $67,172 (1996 dollars) and producer surplus would decrease
by $67,166, resulting in a net annual benefit of $6. The price of
poultry would fall by $0.006 per metric ton. The medium-volume scenario
shows an increase in consumer surplus of $671,734, a decrease in
producer surplus of $671,645, and a net benefit of $89. The price of
poultry would decrease by $0.063 per metric ton. Under the high-volume
scenario, consumer surplus would rise by $3,358,942, and producer
surplus would fall by $3,357,902, for a net benefit of $1,040. Poultry
prices would decrease by $0.30 per metric ton. It is apparent that
expected impacts are very small for each of the scenarios.
The United States' Poultry Market
Since the mid-1960s, there have been dramatic changes in the market
structure, production technology and retail marketing of broiler
products. Production efficiency has been increased by continuing
improvements in genetics, nutrition, housing, equipment, disease
control, and management. Improved production efficiency is demonstrated
in the reduction of feed and time required for producing a broiler
chicken. Growing a 4.5 lb. broiler in 1940 required 14 weeks and 4 lb.
of feed per pound of live bird. Today, the same size bird can be
produced in 6.5 weeks with less than 2 lb. of feed per pound of bird.
Managerial decisionmaking has shifted from single proprietorship
farming operations to vertically integrated poultry producing-
processing-marketing firms, in which production and marketing decisions
are centralized in a single entity that is either owned directly or
controlled through contracts.
Improvement in poultry house technology enables producers to raise
chickens in large confinement units throughout the year, resulting in
increased production efficiency and consequent reductions in production
cost. By 1995, almost all (99 percent) broilers were produced by
vertically integrated companies. In 1978, in the United States, the
four largest broiler companies controlled 21.4 percent of national
production, and the eight largest broiler companies controlled 36.1
percent. By 1992 the four largest companies produced approximately 41
percent of national production, while the eight largest companies
produced about 56 percent.
The potential economic effects of the proposed importation of
poultry meat and other poultry products from the Mexican States of
Sinaloa and Sonora on national, regional, and local poultry producers
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 poultry meat and other poultry products from Sinaloa and Sonora
would enter U.S. marketing and distribution channels and where they
would ultimately be consumed, it is likely that they would be shipped
by truck through Nogales, AZ. Other U.S. States in the region that
could receive poultry from Sinaloa and Sonora are California, New
Mexico, and Texas. It is unclear whether poultry from Sinaloa and
Sonora would be consumed only in these four States. If poultry from
Sinaloa and Sonora were purchased by a local retail chain or
wholesaler, it would likely be consumed regionally. If it were
purchased by a national wholesaler, it could be consumed anywhere in
the United States. The effect on small producers would be more
pronounced if Sinaloa and Sonora imports affected only California,
Arizona, New Mexico, and Texas producers. For the purpose of this
analysis, we examined both the possibility that poultry meat and other
poultry products from Sinaloa and Sonora would be consumed locally in
these four southwestern States, and also the possibility that they
would enter national distribution channels.
The Small Business Administration (SBA) defines small poultry farms
(Standard Industrial Code 0251) as those earning less than $500,000 in
annual sales, except for sales of chicken eggs. Industry experts
suggest that only those poultry operations producing in excess of
270,000 broiler chickens would earn $500,000 or more in sales annually.
According to the SBA definition, at least 99 percent of poultry
farms in Arizona, New Mexico, and Texas and 97 percent of poultry farms
in California are small entities. There were 1,425 small poultry farms
in the four states in 1992, and only 7 farms with estimated annual
revenues greater than $500,000. For the United States as a whole, in
1992, there were an estimated 11,626 small poultry farms, and 14 large
poultry farms. Although some structural changes may have occurred among
broiler producers since the 1992 Census of Agriculture, it can be
assumed that poultry farms remain predominantly small entities.
According to the 1992 Census of Agriculture, in 1992, California's
average sales by small broiler farms ($97,540) were higher than the
national average ($85,883), while sales in Texas were lower ($73,429).
There are no comparable data for Arizona's and New Mexico's broiler
farmers.
Whether we consider the United States as a whole or only selected
southwestern States, the overwhelming majority of poultry farms are
small entities. It is reasonable to conclude that, if U.S. poultry
producers are affected by this proposed rule, a substantial number
would be small entities.
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.1
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\1\ Verkuil, Duke Law Journal, 1982.
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We used estimated changes in producer surplus together with the
1992 Census of Agriculture data on poultry inventories and poultry
sales to develop very rough estimates of the economic impact of the
proposed rule on small poultry farmers across the United States and in
selected southwestern States. To do this, we assumed that losses in
producer surplus are shared equally among all poultry farms in the
geographic area under consideration (either the entire United States or
selected southwestern States). We then compared per farm changes in
producer surplus with small farms' annual sales to determine whether
the economic effects approached the 5-10 percent threshold.
If poultry meat and other poultry products from Sinaloa and Sonora
entered national distribution channels and, therefore, economic effects
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.
poultry farm would range from $2 to $103 per year, and these amounts
are substantially less than 1 percent of the typical small poultry
farmer's annual sales in every scenario.
If, under the high-volume scenario, the maximum 5,000 metric tons
were imported annually from Sinaloa and Sonora and consumed locally in
Arizona, California, New Mexico, and Texas, there likely would not be a
[[Page 27716]]
significant economic impact on small entities no matter which level
(low, medium, or high volume) of imports is assumed. Producer surplus
losses per poultry farm in the selected southwestern States would range
from $10 to $488 per year, and these amounts are less than 1 percent of
the typical small California or Texas poultry farmer's annual sales in
every scenario. Since we have no data available on sales in Arizona and
New Mexico, we cannot determine the effect of this proposal on
producers in those States.
A substantial number (99 percent) of U.S. broiler farms meet the
SBA size criteria for designation as small entities. However, the
proposed rule is not likely to have a significant economic impact on
them. Even under the high-volume import assumption, there would not be
a significant economic impact on small U.S. poultry farms, no matter
where the Mexican poultry is imported and consumed. Under the most
extreme assumptions (imports of 5,000 metric tons and limited
geographic area affected), small poultry producers in California and
Texas would experience losses in producer surplus equaling less than 1
percent of annual sales, which does not meet the suggested criteria for
significant economic impact. Further, we expect that this action will
have a similar effect on small poultry producers in Arizona and New
Mexico, though we do not have the data to confirm this.
If this rule is adopted, it is very unlikely that a volume of 5,000
metric tons of poultry meat or other poultry products will be exported
from Sinaloa and Sonora to the United States since Mexico is not a
major exporter of poultry meat or other poultry products. Mexico had
yearly world exports of 5,000 metric tons of poultry meat and poultry
products in 1990, 1991, and 1992. However, in 1993, 1994, 1995, Mexico
exported no poultry meat and other poultry products, and since 1996 has
exported less than 1000 metric tons of poultry meat and other poultry
products annually.
Further, even under the high-volume scenario (5,000 metric tons),
Mexico's exports to the United States represent less than .05 percent
of total U.S. poultry production (over 14 million metric tons in 1997).
Alternatives Considered
In developing this proposed rule, we considered: (1) Making no
changes to the existing regulations governing the importation of
poultry meat and other poultry products from Sinaloa or Sonora, Mexico;
(2) proposing to allow the importation of poultry meat and other
poultry products from Sinaloa and Sonora under conditions different
from those proposed; or (3) proposing to allow the importation of
poultry and poultry products from Sinaloa and Sonora under the
conditions proposed in this document.
We rejected the first alternative because poultry meat and other
poultry products from Sinaloa and Sonora appear to present little risk
of introducing END into the United States, and 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 poultry meat
and other poultry products from Sinaloa and Sonora under conditions
other than those proposed. We believe that using conditions less
stringent than those proposed for the importation of poultry meat and
other poultry products from Sinaloa and Sonora would increase the risk
of the introduction of END into the United States to more than a
negligible level and that using more stringent conditions would be
unnecessarily restrictive. We believe the proposed conditions to be
both effective and necessary in reducing to a negligible level the risk
of the introduction of END through the importation of poultry meat and
other poultry products imported into the United States from Sinaloa and
Sonora, Mexico. Further, we invite public comment on the risk-
mitigating controls and requirements we have proposed in this document.
The proposed changes to the regulations would result in new
information collection or recordkeeping requirements, as described
below under the heading ``Paperwork Reduction Act.''
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 poultry meat and other
poultry products from Sinaloa and Sonora, Mexico, under the conditions
specified in this proposed rule would not present a significant risk of
introducing or disseminating END 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. 98-034-1.
Please send a copy of your comments to: (1) Docket No. 98-034-1,
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 regulations to relieve certain
restrictions on the importation of poultry meat and other poultry
products from Sinaloa and
[[Page 27717]]
Sonora, Mexico, by establishing new conditions for the importation of
fresh and processed poultry and poultry products from Sinaloa and
Sonora into the United States.
Implementing this proposed rule would necessitate the use of two
paperwork collection activities: 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 poultry meat and
other poultry products from the Mexican States of Sinaloa and Sonora.
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 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 0.133 hours per
response.
Respondents: Full-time, salaried veterinarians of the Government of
Mexico.
Estimated annual number of respondents: 4.
Estimated annual number of responses per respondent: 15.
Estimated annual number of responses: 60.
Estimated total annual burden on respondents: 8 hours.
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. A new Sec. 94.22 would be added to read as follows:
Sec. 94.22 Importation of poultry meat and other poultry products from
Sinaloa and Sonora, Mexico.
Notwithstanding any other provisions of this part, poultry meat and
other poultry products from the States of Sinaloa and Sonora, Mexico,
may be imported into the United States under the following conditions:
(a) The poultry meat or other poultry products are derived from
poultry born and raised in Sinaloa or Sonora and slaughtered in Sinaloa
or Sonora 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 poultry meat
and other poultry products to the United States in accordance with 9
CFR 381.196.
(b) If processed, the poultry meat or other poultry products were
processed in either Sinaloa or Sonora, Mexico, 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 poultry meat or other poultry products have not been in
contact with poultry from any State in Mexico other than Sinaloa or
Sonora or with poultry from any other region not listed in Sec. 94.6 as
a region where exotic Newcastle disease is not known to exist.
(d) The foreign meat inspection certificate accompanying the
poultry meat or other poultry products (required by Sec. 381.197 of
this title) includes statements certifying that the requirements in
paragraphs (a), (b), and (c) of this section have been met and, if
applicable, listing the numbers of the seals required by paragraph
(e)(1) of this section.
(e) The shipment of poultry meat or other poultry products has not
been in any State in Mexico other than Sinaloa or Sonora or in any
other region not listed in Sec. 94.6 as a region where exotic Newcastle
disease is not known to exist, unless:
(1) The poultry meat or other poultry products arrive at the U.S.
port of entry in shipping containers bearing intact, serially numbered
seals that were applied at the Federally inspected slaughter plant 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 poultry meat or other poultry products arrive 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 poultry containers were opened and resealed en
route by an appropriate official of the Government of Mexico and the
poultry meat or other poultry products were not contaminated or exposed
to contamination during movement from Sinaloa or Sonora to the United
States.
Done in Washington, DC, this 17th of May 1999.
Craig A. Reed,
Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 99-12885 Filed 5-20-99; 8:45 am]
BILLING CODE 3410-34-P