E6-17776. Change in Disease Status of Namibia With Regard to Foot-and-Mouth Disease and Rinderpest

AGENCY:

Animal and Plant Health Inspection Service, USDA.

ACTION:

Final rule.

SUMMARY:

We are amending the regulations to add Namibia, except the portion of the country north of the Veterinary Cordon Fence (VCF), to the list of regions that are considered free of foot-and-mouth disease (FMD), and to add the entire country to the list of regions that are considered free of rinderpest. We are taking this action because we have determined that the region in Namibia south of the VCF is now free of FMD and the entire country is free of rinderpest. We are also adding Namibia, except the region north of the VCF, to the list of FMD- and rinderpest-free regions that are subject to certain import restrictions on meat and other animal products because of their proximity to or trading relationships with rinderpest- or FMD-affected regions. This action relieves certain restrictions due to FMD and rinderpest on the importation into the United States of certain live animals and animal products from all regions of Namibia except the region north of the VCF. However, because we consider Namibia to be affected with African swine fever, classical swine fever, and swine vesicular disease, the importation of live swine and pork and pork products will continue to be restricted. In addition, because we consider Namibia to be affected with other animal diseases that are exotic to the United States, the importation of live ruminants and germplasm will also continue to be restricted. These actions will update the disease status of Namibia with regard to FMD and rinderpest while continuing to protect the United States from an introduction of those diseases by providing additional requirements for any meat and meat products imported into the United States from Namibia.

DATES:

Effective Date: November 24, 2006.

FOR FURTHER INFORMATION CONTACT:

Mr. Javier Vargas, Animal Scientist, Regionalization Evaluation Services Staff, National Center for Import and Export, VS, APHIS, 4700 River Road, Unit 38, Riverdale, MD 20737-1231; [phone].

SUPPLEMENTARY INFORMATION:

Background

The regulations in 9 CFR part 94 (referred to below as the regulations) govern the importation of certain animals and animal products into the United States in order to prevent the introduction of various diseases, including rinderpest, foot-and-mouth disease (FMD), African swine fever, classical swine fever, and swine vesicular disease. These are dangerous and destructive communicable diseases of ruminants and swine. Section 94.1 of the regulations lists regions of the world that are declared free of rinderpest or free of both rinderpest and FMD. Rinderpest or FMD exists in all other parts of the world not listed. Section 94.11 of the regulations lists regions of the world that have been determined to be free of rinderpest and FMD, but that are subject to certain restrictions because of their proximity to or trading relationships with rinderpest- or FMD-affected regions.

On June 15, 2006, we published in the Federal Register (71 FR 34537-34549, Docket No. APHIS-2006-0037) a proposal ^[1] to amend the regulations by recognizing the entire country of Namibia as rinderpest-free and all of Namibia except the region north of the Veterinary Cordon Fence (VCF) as free of FMD. We also proposed to add Namibia, except the region north of the VCF, to the list of FMD- and rinderpest-free regions that are subject to certain import restrictions on meat and other animal products because of their proximity to or trading relationships with rinderpest- or FMD-affected regions. In our proposal, we noted that, because we consider Namibia to be affected with African swine fever, classical swine fever, and swine vesicular disease, the importation of live swine and pork and pork products would continue to be restricted. In addition, because we consider Namibia to be affected with other animal diseases that are exotic to the United States, the importation of live ruminants and germplasm would also continue to be restricted.

We solicited comments concerning our proposal for 60 days ending August 14, 2006. We did not receive any comments. Therefore, for the reasons given in the proposed rule, we are adopting the proposed rule as a final rule, without change.

Executive Order 12866 and Regulatory Flexibility Act

This rule has been reviewed under Executive Order 12866. For this action, the Office of Management and Budget has waived its review under Executive Order 12866.

We are amending the regulations in § 94.1 to list Namibia as a region free of rinderpest and the region of Namibia south of the VCF as a region free of FMD. However, since Namibia borders on and trades with regions that the United States does not recognize as free of FMD and because its importation standards are less stringent than those of the United States, we are also listing the region of Namibia south of the VCF in § 94.11 as a region subject to the additional certification requirements of that section.

It should be noted that Namibia is not currently eligible to export ruminant meat products to the United States under the regulations of the United States Department of Agriculture's Food Safety Inspection Service (FSIS); there would, therefore, be no economic effects on U.S. entities until establishments in Namibia were approved to export ruminant meat and other products to the United States. The following analysis examines the potential economic impacts of the changes in the regulations that could occur if establishments in Namibia were approved to export under the FSIS regulations.

Namibia produces and internationally trades in beef, sheep, goat, and game meat. Namibia produced 134 million pounds of beef in 2004 and exported an average of 59.2 million pounds of beef and veal per year between 1994 and 2003. The country has established trading relationships with the Republic of South Africa and several western European countries. Namibia also produced 29.6 million pounds of mutton, lamb, and goat meat in 2003 and exported an average of 5.73 million pounds per year between 1994 and 2003, with most exports going to the Republic of South Africa. Namibia produced 8.8 million pounds of game meat in 2003.

Namibia's agricultural trade with the United States is small. In 2003, Namibia exported agricultural products worth a total $199,000, of which $21,000 was for hides and skins, and imported $5.443 million worth of agricultural products, of which $40,000 was for beef and veal. (Sources: FAO, FAOSTAT, 2004; UN/FAO, FAOSTAT Data, 2004; Hilda Hampweya, April 2005, personal communication, Namibia Division of Trade and Statistics.)

Possible economic effects of imports from Namibia would differ for beef and for sheep and goat meat imports. For beef imports, approximately 22 million pounds of beef could be imported annually from Namibia as a result of this rule (again, assuming FSIS approval) based on data collected from the Central Bureau of Statistics-Trade Statistics Division of Namibia. Based on 10-year average U.S. domestic supply, an import of about 22 million pounds of beef would result in a price decrease of less than $0.002 per pound at the wholesale level. If 50 percent of Namibia's 10-year average beef exports (29.6 million pounds) were diverted to the U.S. market, the result would be a price decline of only $0.0024 per pound (table 1).

As for sheep and goats, the estimated potential exports to the United States of these meats are about 15.43 million pounds per year according to data collected from the Central Bureau of Statistics-Trade Statistics Division of Namibia. If this supply were realized, U.S. sheep and goat meat prices could decline and sheep producers could be negatively affected, as the above figure represents about 4.35 percent of U.S. domestic supply. This could result in a price decline of $0.07 per pound (table 1). However, it is questionable whether Namibia would have the capacity to export this amount and maintain its trade with its established South African and European markets. Although several markets in the European Union are accessible to Namibia, the Republic of South Africa continues to be its major trading partner. Namibia exported 15.66 million pounds of sheep and goat meat to all countries in 2003, so to meet this goal of 15.43 million pounds exported to the United States, nearly all of the current exports would have to be diverted. Between 1994 and 2003, Namibian exports of sheep and goats have fluctuated, with a negative export growth rate in every year except for four: 1995, 1998, 1999, and 2001. The impact is not as large when based on the 10-year average quantity exported of 5.73 million pounds. Assuming this level of export to the United States, the estimated decline in price is between $0.02 and $0.03 per pound.

Table 1.—The Impact of the Importation of Beef, Sheep, and Goat Meat From Namibia to the United States

Percentage diverted to U.S. market 1	Beef				Sheep and goat meat
	Million pounds	Change in price (%)	Decline in price (cents/pound)	Domestic producer loss (millions of $)	Million pounds	Change in price (%)	Decline in price (cents/pound)	Domestic producer loss (millions of $)
10	5.92	−0.0291	−0.0483	−11.902	0.573	−0.231	−0.261	−0.435
20	11.84	−0.0582	−0.0966	−23.795	1.146	−0.461	−0.521	−0.871
40	23.68	−0.1164	−0.1932	−47.586	2.293	−0.922	−1.042	−1.742
50	29.6	−0.1454	−0.2414	−59.479	2.865	−1.153	−1.303	−2.177
Designated	2 22.05	−0.1083	−0.1799	−44.309	2 15.43	−6.209	−7.016	−11.725
1 The percentages are based on the 10-year average exports: 59.2 million pounds for beef and 5.73 million pounds for sheep and goat meat.
2 Denotes the estimated amount indicated by Namibian agricultural specialists and the industry as being available for export to the United States.

The impacts depicted in table 1 are further considered in terms of effects for large and small entities in table 2 (beef producers) and table 3 (sheep and goat producers). In each case, impacts at various import levels are apportioned between large and small establishments by inventory share, according to the 2002 Census of Agriculture. Average effects per establishment are calculated based on numbers of large and small establishments with reported sales (2002 Census of Agriculture). As shown in table 2, if Namibia were to divert to the United States 22.05 million pounds of beef exports per year, as projected by that country's agricultural specialists, the average annual decline in revenue for U.S. small entities would be about $28. Similarly, if 15.43 million pounds of sheep and goat meat exports per year were diverted to the United States, as projected by Namibia, the average annual decline in revenue for U.S. small entities would be about $108.

Table 2.—Potential Effects for Large and Small Beef Cattle Producers

Percentage diverted to the U.S. market 1	U.S. producer revenue loss (millions of $)	Large 2		Small 2
		Revenue loss (millions of $)	Average revenue loss ($)	Revenue loss (millions of $)	Average revenue loss ($)
10	−11.902	−5.571	−860	−6.331	−8
20	−23.795	−11.138	−1,719	−12.657	−15
40	−47.586	−22.275	−3,437	−25.311	−30
50	−59.479	−27.642	−4,265	−31.637	−38
Designated	−44.309	−20.741	−3,200	−23.568	−28
1 The percentages are based on the 10-year average exports: 59.2 million pounds for beef and 5.73 million pounds for sheep and goat meat.
2 Revenue losses to large and small establishments are distributed according to inventory share (46.81 percent for large and 53.19 percent for small establishments). Averaged revenue losses are calculated by dividing by the number of establishments (845,490 and 6,481 for small and large establishments, respectively).

Table 3.—Potential Effects for Large and Small Sheep and Goat Producers

Percentage diverted to the U.S. market 1	U.S. producer revenue loss (millions of $)	Large 2		Small 2
		Revenue loss (millions of $)	Average revenue loss ($)	Revenue loss (millions of $)	Average revenue loss ($)
10	−0.435	−0.114	−765	−0.321	−4
20	−0.871	−0.229	−1,537	−0.642	−8
40	−1.742	−0.458	−3,074	−1.284	−16
50	−2.177	−0.573	−3,846	−1.604	−20
Designated	−11.725	−3.084	−20,698	−8.641	−108
1 The percentages are based on the 10-year average exports: 59.2 million pounds for beef and 5.73 million pounds for sheep and goat meat.
2 Revenue losses to large and small establishments are distributed according to inventory share (26.3 percent for large and 73.7 percent for small establishments). Average revenue losses are calculated by dividing by the number of establishments (80,443 and 149 for small and large establishments, respectively).

According to the size standards established by the Small Business Administration (SBA) for livestock and animal specialties, producers of cattle and calves (North American Industry Classification System [NAICS] code 112111), game animals (NAICS 112990), sheep (NAICS 112410), and goats (NAICS 112420) with not more than $750,000 annual sales qualify as small entities. Based on data from the 2002 Census of Agriculture, 851,971 operations in the U.S. raised and sold 73 million cattle and calves in 2002. Small operations (over 99 percent of the farms) had an average of 68 cattle and an average income of $24,067, well below the SBA criterion of $750,000 in annual sales for businesses primarily engaged in cattle farming. Large operations had an annual income of $3,821,440. Similarly, over 99 percent of sheep and goat producers (80,443) are small. Small sheep and lamb producers had an average income of $7,520, while large ones had an average income of $1.042 million.

Meat processing entities (NAICS 311612), and meat and meat product merchant wholesalers (NAICS 424470) may be affected by this rule (Source: U.S. Census Bureau, 2002 Economic Census, Wholesale Trade-Subject Series, August 2006). Under SBA standards, meat processing establishments with no more than 500 employees and meat and meat product wholesalers with no more than 100 employees are considered small. In 2002, there were 1,335 companies in the United States that processed and sold meat. More than 97 percent of these establishments are considered to be small entities and had average sales of $15.4 million, while large meat processors had average sales of $188 million. In 2002, there were 2,535 meat and meat product wholesalers in the United States. (Source: SBA and 2002 Economic Census.) Of these establishments, 2,456 (97 percent) employed not more than 100 employees and are, thus, considered small by SBA standards. Small wholesalers had average sales of $9.3 million, while large entities had average sales of $131 million.^[2]

The only alternative to the rule would involve not changing the current regulations regarding the importation of beef, sheep, and goat meat and game meat from Namibia. This alternative would not be appropriate in light of the findings of our risk analysis and our conclusion that the Namibian government has the laws, policies, and infrastructure to detect, respond to, and eliminate any reoccurrence of FMD. The rule provides the safeguarding measures appropriate to the animal disease risk associated with importation of this type of animal product. The rule also enhances a positive trade environment between Namibia and the United States. We note again that Namibia is not currently eligible to export ruminant meat products to the United States under the FSIS regulations cited earlier in this document; there would, therefore, be no economic effects on U.S. entities until establishments in Namibia were approved to export ruminant meat and other products to the United States.

Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities.

Executive Order 12372

This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.)

Executive Order 12988

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule: (1) Preempts all State and local laws and regulations that are in conflict with this rule; (2) has no retroactive effect; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

Paperwork Reduction Act

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

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 are amending 9 CFR part 94 as follows:

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

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

Authority: 7 U.S.C. 450, 7701-7772, 7781-7786, and 8301-8317; 21 U.S.C. 136 and 136a; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.4.

§ 94.1

[Amended]

2. Section 94.1 is amended as follows:

a. In paragraph (a)(2), by adding the words “Namibia (excluding the region north of the Veterinary Cordon Fence),” after the word “Mexico,”.

b. In paragraph (a)(3), by removing the words “The Republic” and adding the words “Namibia and the Republic” in their place.

§ 94.11

[Amended]

3. In § 94.11, paragraph (a) is amended by adding the words “Namibia (excluding the region north of the Veterinary Cordon Fence),” before the words “The Netherlands”.

Done in Washington, DC, this 18th day of October 2006.

Kevin Shea,

Acting Administrator, Animal and Plant Health Inspection Service.

Footnotes

1.  To view the proposed rule, go to http://www.regulations.gov,, click on the “Advanced Search” tab, and select “Docket Search.” In the Docket ID field, enter APHIS-2006-0037, then click “Submit.” Clicking on the Docket ID link in the search results page will produce a list of all documents in the docket.

2.  U.S. Census Bureau, 2002 Economic Census: Manufacturing-Industries Series, Wholesale Trade-Subject Series and Transportation and Warehousing-Subject Series, Issued December 2005.