[Federal Register Volume 59, Number 218 (Monday, November 14, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-28084]


[[Page Unknown]]

[Federal Register: November 14, 1994]


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DEPARTMENT OF AGRICULTURE
7 CFR Part 906

[Docket No. FV94-906-3-FR]

 

Oranges and Grapefruit Grown in the Lower Rio Grande Valley in 
Texas; Higher Quality and Reduced Size Requirements for Texas 
Grapefruit

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule increases the minimum quality requirements for 
Texas grapefruit to Texas Choice, from the current minimum grade 
requirement of U.S. No. 2. This rule also temporarily relaxes the 
minimum size requirements for certain Texas grapefruit for the 
remainder of the 1994-95 season. This rule is designed to help the 
Texas citrus industry successfully market the 1994-95 season grapefruit 
crop.

EFFECTIVE DATE: This final rule becomes effective November 14, 1994.

FOR FURTHER INFORMATION CONTACT: Charles L. Rush, Marketing Order 
Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O. 
Box 96456, Room 2523-S, Washington, DC 20090-6456; telephone: 202-720-
5127; or Belinda G. Garza, McAllen Marketing Field Office, USDA/AMS, 
1313 East Hackberry, McAllen, Texas 78501; telephone: 210-682-2833.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing 
Agreement and Marketing Order No. 906 [7 CFR Part 906] regulating the 
handling of oranges and grapefruit grown in the Lower Rio Grande Valley 
in Texas, hereinafter referred to as the order. This order is effective 
under the Agricultural Marketing Agreement Act of 1937, as amended [7 
U.S.C 601-674], hereinafter referred to as the Act.
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This final rule has been reviewed under Executive Order 12778, 
Civil Justice Reform. This rule is not intended to have retroactive 
effect. This rule will not preempt any State or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 8c(15)(A) of the 
Act, any handler subject to an order may file with the Secretary a 
petition stating that the order, any provision of the order, or any 
obligation imposed in connection with the order is not in accordance 
with law and requesting a modification of the order or to be exempted 
therefrom. A handler is afforded the opportunity for a hearing on the 
petition. After the hearing, the Secretary would rule on the petition. 
The Act provides that the district court of the United States in any 
district in which the handler is an inhabitant, or has his or her 
principal place of business, has jurisdiction in equity to review the 
Secretary's ruling on the petition, provided a bill in equity is filed 
not later than 20 days after the date of the entry of the ruling.
    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA), the Administrator of the Agricultural Marketing 
Service (AMS) has considered the economic impact of this action on 
small entities.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and rules issued thereunder, are unique in that 
they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are about 15 citrus handlers subject to regulation under the 
order covering oranges and grapefruit grown in Texas, and about 750 
producers of these citrus fruits in Texas. Small agricultural service 
firms, which include grapefruit handlers, have been defined by the 
Small Business Administration [13 CFR 121.601] as those having annual 
receipts less than $5,000,000, and small agricultural producers are 
defined as those whose annual receipts are less than $500,000. A 
majority of these handlers and producers may be classified as small 
entities.
    The Texas Valley Citrus Committee (committee) met on June 30, 1994, 
and recommended the regulatory changes for Texas grapefruit. The 
committee meets prior to and during each season to review the handling 
regulations effective on a continuous basis for each citrus fruit 
regulated under the order. Committee meetings are open to the public, 
and interested persons may express their views at these meetings. The 
Department reviews committee recommendations and information, as well 
as information from other sources, and determines whether modification, 
suspension, or termination of the handling regulations would tend to 
effectuate the declared policy of the Act.
    Minimum grade and size requirements for fresh grapefruit grown in 
Texas are in effect under Sec. 906.365 [7 CFR 906.365]. This rule 
amends Sec. 906.365 by revising paragraph (a)(3) to delete authority 
for shipping U.S. No. 2 grade grapefruit and by revising paragraph 
(a)(4) to permit shipment of grapefruit measuring at least 3\5/16\ 
inches in diameter (pack size 112) for the remainder of the 1994-95 
season ending July 31, 1995, provided such grapefruit grade at least 
U.S. No. 1.

Revision of Minimum Quality Requirements

    Section 906.365 of the order's rules and regulations currently 
provide that fresh shipments of grapefruit must grade, in descending 
order of quality, U.S. Fancy, U.S. No. 1, U.S. No. 1 Bright, U.S. No. 1 
Bronze, or U.S. No. 2. The requirements for these grades are set forth 
in the U.S. Standards for Grades of Grapefruit (Texas and States other 
than Florida, California and Arizona) [7 CFR 51.620 through 51.653]. In 
addition, there are other qualities of grapefruit packed by the Texas 
citrus industry defined in section 906.137, pertaining to handlers' use 
of identifying marks utilized by the committee in promotional and 
advertising projects. Section 906.137 provides that handlers may use 
the identifying mark ``Texas Fancy'' only with respect to grapefruit 
grading at least U.S. No. 1, but with no more than 40 percent of the 
surface of the fruit, in aggregate, affected by discoloration. This 
quality of fruit is slightly better than that grading U.S. No. 1, but 
slightly less than that grading U.S. Fancy. Section 906.137 further 
provides that handlers may use the identifying mark ``Texas Choice'' 
only with respect to fruit grading at least U.S. No. 2, except that no 
more than 60 percent of the surface of the fruit, in aggregate, may be 
affected by discoloration. ``Texas Choice'' fruit is of a quality 
slightly better than that of a U.S. No. 2 grade, which provides that up 
to two-thirds of the fruit surface may be affected by discoloration.
    This rule amends section 906.365 to provide that the minimum 
quality of grapefruit shipped to fresh market outlets will be ``Texas 
Choice'', thereby eliminating the authority to ship U.S. No. 2 grade 
fruit beginning with 1994-95 season shipments.
    The committee recommended that the minimum quality requirements for 
fresh market shipments of Texas-grown grapefruit be increased, as 
specified. The committee reports that because grapefruit production in 
Texas as well as in other competitive grapefruit growing areas is 
increasing much faster than consumer demand, there is an opportunity to 
increase consumer satisfaction with fresh market grapefruit and a need 
to improve returns to producers. The consumer demand for such 
grapefruit should be strengthened, because consumers prefer the higher 
quality grapefruit which this rule requires be shipped.
    Minimum grade requirements under the order are designed to provide 
fresh markets with fruit of acceptable grade and maturity, thereby 
maintaining consumer confidence in fresh Texas-grown grapefruit. This 
helps create buyer confidence and contributes to stable marketing 
conditions.
    The committee believes elimination of the U.S. No. 2 grade has 
other benefits as well. First, it reduces the number of different packs 
of grapefruit currently being offered by the Texas citrus industry from 
seven to six. This reduction enhances standardization and reduces buyer 
confusion, which should benefit Texas growers and shippers. Second, 
this action makes the Texas grapefruit industry more competitive with 
other growing areas. The Citrus Administrative Committee which 
administers Federal Marketing Order No. 905, covering citrus grown in 
Florida, recently made a similar recommendation to eliminate the 
shipment of U.S. No. 2 grade grapefruit. The Texas industry believes it 
should do the same to remain viable in this highly competitive 
business. Finally, the committee believes that increasing the quality 
of grapefruit offerings from Texas will complement its promotion and 
advertising activities undertaken under authority of the order. These 
activities are designed to create buyer preference for Texas-grown 
grapefruit, and increasing the quality offered for shipment enhances 
these efforts.
    This increase in quality requirements should not have a significant 
impact on available supplies of fresh Texas grapefruit. The committee 
reports that in recent seasons, grapefruit grading U.S. No. 2 have 
comprised less than 1 percent of total fresh shipments. The benefits of 
this rule should therefore outweigh any costs related to increasing the 
minimum quality requirements. Grapefruit not meeting ``Texas Choice'' 
quality requirements could be utilized in exempt outlets, such as 
processing, relief or charity.

Temporary Relaxation of Minimum Size Requirements

    Section 906.365 also establishes minimum size requirements for 
Texas grapefruit. During the period November 16 through January 31 each 
season, grapefruit must be at least pack size 96, except that the 
minimum diameter for the grapefruit in any lot is 3\9/16\ inches. At 
other times, grapefruit that is pack size 112, except that the minimum 
diameter for grapefruit in any lot is 3\5/16\ inches, may be shipped if 
it grades at least U.S. No. 1. This rule provides that pack size 112 
grapefruit may be shipped throughout the remainder of the 1994-95 
season if such grapefruit grade at least U.S. No. 1. This relaxation is 
the same as the relaxation which previously was issued for the period 
beginning October 25, 1993, and ending July 31, 1994.
    This relaxation is expected to help the Texas citrus industry 
successfully market its 1994-95 season grapefruit crop and have a 
positive effect on producer returns. Permitting shipments of pack size 
112 grapefruit grading at least U.S. No. 1 for the remainder of the 
1994-95 season will enable Texas grapefruit handlers to meet market 
needs and compete with similar sized grapefruit expected to be shipped 
from Florida. This rule is based on the current and prospective crop 
and market conditions for Texas grapefruit. Fresh Texas grapefruit 
shipments are expected to begin in October of this season.
    This rule reflects the committee's and the Department's appraisal 
of the need to increase minimum quality and temporarily relax minimum 
size requirements for fresh Texas-grown grapefruit, as specified. The 
Department's view is that this rule will have a beneficial impact on 
Texas producers and handlers of fresh grapefruit, since it enables such 
producers and handlers to make available the quality and sizes of 
grapefruit needed to meet consumer needs consistent with the remainder 
of the 1994-95 season crop and market conditions.
    The proposed rule concerning this action was published in the 
September 1, 1994, Federal Register [59 FR 45241], with a 15-day 
comment period ending September 16, 1994. One comment was received and 
it was in opposition to the proposed rule.
    The comment in opposition to increasing the minimum grade 
requirement for Texas grapefruit was submitted by the United States 
Department of Justice (DOJ). The DOJ contends that this action will 
result in a restriction on grapefruit shipments which will offer no 
long term benefits to consumers or producers. The DOJ also contends 
that the higher minimum grade requirements will artificially restrict 
the supply of fresh grapefruit, causing consumer prices to rise and 
promoting wasteful misallocation of society's resources. Additionally, 
the DOJ contends that the increased grower profits will not be 
sustainable in the long run, because any artificially raised returns to 
producers will provide an incentive for inefficient new grapefruit 
production. The DOJ contends further that this new inefficient 
production will increase producer costs and erode grower profits until 
producer returns revert to the prerestriction level.
    The Department's position is that higher minimum grade requirements 
will have the effect of stabilizing prices for grapefruit by providing 
consistent quality to consumers. In addition, studies have shown that 
consumers prefer high quality fruit. Therefore, a higher grade 
requirement could increase and sustain demand. Consequently, the DOJ 
request that the Secretary reject the committee's recommendation is 
denied.
    Based on the above, the Administrator of the AMS has determined 
that this final rule will not have a significant economic impact on a 
substantial number of small entities.
    After consideration of all relevant matter presented, including the 
information and recommendations submitted by the committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this action until 15 days after publication in the Federal Register 
because: (1) The committee needs to have this amendment in effect as 
soon as possible because Texas grapefruit shipments for the 1994-95 
season have begun; (2) handlers are aware of this action which was 
unanimously recommended by the committee at a public meeting; and (3) 
the proposed rule provided a 15-day comment period and all comments 
timely received were considered prior to finalization of this action.

List of Subjects in 7 CFR Part 906

    Grapefruit, Marketing agreements, Oranges, Reporting and 
recordkeeping requirements.

    For the reasons set forth in the preamble, 7 CFR Part 906 is 
amended as follows:

PART 906--ORANGES AND GRAPEFRUIT GROWN IN LOWER RIO GRANDE VALLEY 
IN TEXAS

    1. The authority citation for 7 CFR Part 906 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

    2. Section 906.365 is amended by revising paragraphs (a)(3) and 
(a)(4) to read as follows:


Sec. 906.365  Texas Orange and Grapefruit Regulation 34.

    (a) * * *
    (3) Such grapefruit grade U.S. Fancy, U.S. No. 1, U.S. No. 1 
Bright, or U.S. No. 1 Bronze, or meet the quality requirements of 
``Texas Fancy'' or ``Texas Choice'' as defined in section 906.137 of 
this part;
    (4) Such grapefruit are at least pack size 96, except that the 
minimum diameter limit for pack size 96 grapefruit in any lot shall be 
3\9/16\ inches: Provided, That any handler may handle grapefruit, 
except during the period November 16 through January 31 each season, 
which are smaller than pack size 96, if such grapefruit grade at least 
U.S. No. 1 and they are at least pack size 112, except that the minimum 
diameter limit for pack size 112 grapefruit in any lot shall be 3\5/16\ 
inches: Provided further, That for the period beginning October 15, 
1994, and ending July 31, 1995, any handler may handle grapefruit if 
such grapefruit grade at least U.S. No. 1 and they are at least pack 
size 112, except that the minimum diameter limit for pack size 112 
grapefruit in any lot shall be 3\5/16\ inches in diameter.
* * * * *
    Dated: November 8, 1994.
Martha B. Ransom,
Acting Deputy Director, Fruit and Vegetable Division.
[FR Doc. 94-28084 Filed 11-9-94; 9:24 am]
BILLING CODE 3410-02-P