[Federal Register Volume 60, Number 125 (Thursday, June 29, 1995)]
[Rules and Regulations]
[Pages 33677-33679]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-15858]



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 Rules and Regulations
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  Federal Register / Vol. 60, No. 125 / Thursday, June 29, 1995 / Rules 
and Regulations  


[[Page 33677]]


DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 906 and 944

[Docket No. FV-95-906-1FR]


Oranges Grown in the Lower Rio Grande Valley in Texas and 
Imported Oranges; Suspension of Regulations for Domestic and Imported 
Oranges

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule; suspension.

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SUMMARY: This rule suspends the handling regulations for oranges grown 
in the Lower Rio Grande Valley in Texas and the orange import 
regulations for the period July 1 through August 31 indefinitely. 
Currently, the effective period for both domestic and imported oranges 
is January 1 through December 31 of each year. The purpose of the 
suspension is to remove unnecessary handling regulations applicable to 
shipments of Texas oranges for the two month period July and August. 
The suspension of regulations applicable to imported oranges is 
necessary under section 8e of the amended Agricultural Marketing 
Agreement Act of 1937.

EFFECTIVE DATE: July 1, 1995.

FOR FURTHER INFORMATION CONTACT:

Charles L. Rush, Marketing Specialist, Marketing Order Administration 
Branch, Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456, room 
2523-S, Washington, DC 20090-6456; telephone: 202-690-3670;

or

Belinda G. Garza, McAllen Marketing Field Office, USDA/AMS, 1313 East 
Hackberry, McAllen, TX 78501; telephone: 210-682-2833.

SUPPLEMENTARY INFORMATION: This suspension is issued under Marketing 
Agreement and 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''. The agreement and order are 
effective under the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
    This suspension is also issued pursuant to section 8e of the Act, 
which requires the Secretary of Agriculture to issue grade, size, 
quality, or maturity requirements for certain listed commodities 
imported into the United States that are the same as, or comparable to, 
those imposed upon the domestic commodities under Federal marketing 
orders.
    The Department of Agriculture (Department) is issuing this 
suspension in conformance with Executive Order 12866.
    This suspension has been reviewed under Executive Order 12778, 
Civil Justice Reform. This suspension is not intended to have 
retroactive effect. This action would not preempt any State or local 
laws, regulations, or policies, unless they present an irreconcilable 
conflict with this suspension.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(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.
    There are no administrative procedures which must be exhausted 
prior to any judicial challenge to the provisions of import regulations 
issued under section 8e of the Act.
    Pursuant to 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. Import regulations issued under 
the Act are based on domestic grade, size, quality or maturity 
regulations established under Federal marketing orders.

    There are approximately 15 handlers of oranges and grapefruit 
regulated under the marketing order each season and approximately 750 
orange and grapefruit producers in South Texas. In addition, there are 
approximately 20 importers of oranges subject to the requirements of 
the orange import requirements. Small agricultural service firms, which 
include handlers and importers, have been defined by the Small Business 
Administration (13 CFR Sec. 121.601) as those having annual receipts of 
less than $5,000,000, and small agricultural producers are defined as 
those whose annual receipts are less than $500,000. The majority of 
these handlers, producers, and importers may be classified as small 
entities.

    Oranges grown in the Lower Rio Grande Valley in Texas are subject 
to a minimum grade requirement of U.S. No. 2 and a minimum size 
requirement of 2\6/16\ inches in diameter. These requirements are in 
effect throughout the year on a continuous basis. The grade and size 
requirements for oranges grown in the Lower Rio Grande Valley in Texas 
are found in Sec. 906.365 (7 CFR part 906) under the order. In 
addition, there are container and pack requirements found in 
Sec. 906.340.

    The Texas Valley Citrus Committee (Committee), the agency 
responsible for local administration of the order, meets prior to and 
during each season to review the handling regulations effective on a 
continuous basis for oranges regulated under the order. Committee 
meetings are open to the public, and interested persons may express 
their views at these meetings. 

[[Page 33678]]
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.
    The Committee met on March 9, 1995, and recommended by a 14 to 1 
vote to relax the effective dates of the regulatory period for oranges 
from continuous to July 15 through August 31, 1995, for one year. 
Committee members limited the relaxation to one year because of 
concerns about imported oranges being in commercial channels after 
August 31, and the need to study the impact of such a change. The 
Committee acknowledged that the Texas orange requirements only need to 
be in effect when there are shipments of Texas oranges.
    The Committee member who voted in opposition to the recommended 
change expressed concern about the potential impact imported oranges 
could have on the marketing of Texas oranges if substandard imports are 
in commercial channels when the Texas orange shipping season begins. 
However, with this rule the quality and size regulations for both Texas 
and imported oranges will be effective when the Texas shipping season 
begins and all fruit handled during the Texas shipping season will be 
subject to these requirements.
    According to the Committee, Texas orange shipments typically begin 
in mid to late September and end in mid to late June. The Texas citrus 
industry has been in a vigorous recovery since the freeze of 1989. 
Prior to the freeze, shipments of oranges during the 1986/87 season 
totaled 1,334,548 cartons, shipments for the 1987/88 season totaled 
2,240,181 cartons, and shipments for the 1988/89 season totaled 
1,220,101 cartons. The 1989/90 shipping season ended in early January 
1990 due to the harsh freeze. There was no commercial production or 
shipments of oranges during the 1990/91 season due to the December 1989 
freeze. Orange shipments were minimal during the 1991/92 season as the 
recovery from the freeze of 1989 was still underway. Shipments for the 
1992/93 season totaled approximately 688,000 cartons and shipments in 
the 1993/94 season approximated 833,000 cartons. The Committee expects 
the 1994/95 season to be an excellent year for orange production and 
sales. A review of 1986/87 to 1993/94 Texas orange shipment data 
revealed that the industry's shipping season consistently runs from 
September through the following June. This pattern was consistent in 
both pre-freeze and post-freeze seasons.
    The Department reviewed the Committee's recommendation and 
determined that the quality and size requirements for Texas oranges 
should be suspended for the period July 1 through August 31, when there 
are no Texas orange shipments. The regulatory period would begin in 
September and end in June. There have been production changes over the 
last five to six seasons. However, as mentioned above, the change in 
production is a result of the freeze of 1989. The change in production 
has not resulted in a change in the industry's shipping pattern. The 
industry's shipping pattern consistently begins in September and ends 
in June. Although shipping patterns have not changed to date, in the 
future there may be changes in production. An annual evaluation will be 
conducted to determine the impact of the suspension on the Texas orange 
industry. If it is determined that the suspension has been deleterious 
to the Texas orange industry, necessary modifications will be made.
    Minimum grade and size requirements for fresh oranges grown in 
Texas are in effect under Sec. 906.365 (7 CFR 906.365). This action 
suspends the provisions of Sec. 906.365 that apply to oranges during 
the months of July and August.
    Since the grade and size requirements for Texas oranges will be 
effective during the entire Texas shipping season, this change should 
not have an adverse impact on the Texas orange industry.
    Section 8e of the Act provides that when certain domestically 
produced commodities, including oranges, are regulated under a Federal 
marketing order, imports of that commodity must meet the same or 
comparable grade, size, quality, and maturity requirements. Section 8e 
further provides that whenever two or more marketing orders regulating 
the same agricultural commodity produced in different areas of the 
United States are concurrently in effect, the imports shall be subject 
to the requirements applicable to the commodity produced in the area 
with which the imported commodity is in most direct competition. The 
Secretary has determined that oranges imported into the United States 
are in most direct competition with oranges grown in Texas regulated 
under M.O. No. 906, and has found that the minimum grade and size 
requirements for imported oranges should be the same as those 
established for oranges under M.O. No. 906.
    Imported oranges are subject to minimum grade and size requirements 
under Sec. 944.312 (7 CFR part 944.312). These requirements are in 
effect on a continuous basis because domestic oranges are subject to 
the minimum grade and size requirements under Marketing Order No. 906 
on a continuous basis. This rule suspends section 944.312(a) for the 
period July 1 through August 31 indefinitely so that it is effective 
September 1 through June 30, the same time period that is effective in 
the Texas orange regulation. According to the Department's Market News 
Branch, U.S. fresh orange imports during the 1993/94 season (beginning 
November 1) totaled 37.2 million pounds, up nearly 60 percent from the 
1992/93 total. The increase is attributable to additional supplies from 
Australia as compared with the prior season. Australia's largest 
shipments arrive in July and August. By comparison, U.S. orange imports 
averaged 48.3 million pounds per season from 1988/89 through 1992/93, 
ranging from a low of nearly 19 million pounds to 137.3 million pounds 
in 1990/91 when domestic supplies were reduced following freeze damage 
to the California crop. In both 1992/93 and 1993/94, Australia was the 
principal source of fresh orange imports. Other sources of orange 
imports were the Dominican Republic, whose largest shipments arrive in 
August and September, Mexico, Israel, and Jamaica. In the 1992/93 
season, Australia accounted for 10.1 million pounds, or 43 percent of 
U.S. fresh orange imports and 20.7 million pounds, or 56 percent of the 
U.S. total in 1993/94. Mexico is an important source of orange imports 
during the fall and winter. Imports from Israel are most active during 
the winter, with imports from other countries widely distributed 
throughout the season.
    This rule relaxes import requirements because the orange import 
regulations will not be in effect during the months of July and August. 
This may result in reduced costs to importers. This action should not 
have an adverse impact on the Texas industry, however, because its 
shipping season does not begin until September. Domestic producers will 
not be significantly impacted, since all oranges in commercial channels 
during the domestic shipping season would be subject to the same 
minimum grade and size requirements.
    The purpose of these changes is to assure that applicable quality 
requirements are in place only during such periods as needed by the 
Texas orange industry to provide a consistent supply of oranges of 
acceptable quality to fresh market outlets.

[[Page 33679]]

    A proposed rule concerning this suspension was issued on April 18, 
1995, and published in the Federal Register on April 24, 1995 (60 FR 
60059). That rule provided a 20-day comment period which ended May 15, 
1995. Six comments were received, four in support and two opposed to 
the proposed rule.
    Comments received in favor of suspending the regulations for 
domestic and imported oranges as proposed were submitted by Mr. David 
M. Cain of the Citrus Board of South Australia (Citrus Board), Mr. N. 
Perry Hansen of Waverly Growers Cooperative, and Mr. Gregory P. Nelson 
on behalf of DNE World Fruit Sales and Bernard Egan & Company.
    Mr. Cain states that the Citrus Board speaks on behalf of almost 
900 South Australian citrus growers. It is his contention that the 
suspension of the regulation during the months of July and August, when 
under current arrangements, South Australian oranges arrive in the 
United States, will remove an unnecessary obstacle to their 
importation. He points out that there are no maximum decay level 
restrictions imposed on imports of U.S. oranges into Australia. Mr. 
Hansen supports the suspension, as proposed.
    Mr. Nelson stated that, as president of a major exporter of Florida 
citrus and a major grower of Florida citrus, it is important that all 
import requirements in the United States be reasonable and fair. He 
further stated that he expects no adverse consequences on the domestic 
industry as a result of implementation of the proposed suspension.
    Comments in opposition to the suspension of the orange regulations 
were submitted by Mr. Dwayne Bair, Chairman of the Texas Valley Citrus 
Commitee and Mr. Bobby F. McKown, Executive Vice President/CEO of 
Florida Citrus Mutual.
    Mr. Bair states that the proposal is contrary to the Committee's 
recommendation which was to relax the Texas orange regulations for a 
single season rather than suspending them indefinitely as proposed. The 
Committee recommended relaxing the effective dates of the regulatory 
period for Texas oranges from July 15 through August 31, 1995, for one 
year only. As explained earlier in this rule, past and present 
production and shipping trends support suspending the orange 
regulations during the period July 1 through August 31 indefinitely. 
Also as previously stated an annual evaluation will be conducted to 
determine the impact of this suspension on the Texas orange industry.
    Mr. McKown believes that any reduction in the grade, size, quality, 
or maturity requirements for fresh oranges, could pose long-term 
adverse consumer perceptions of the quality of fresh oranges offered 
for sale in the United States by Florida citrus growers. He further 
postulates that the suspension of the regulations will further depress 
returns to Florida citrus growers.
    The Department currently has no information to support Mr. McKown's 
contention that the suspension will depress returns to Florida citrus 
growers. A review of the impact of the suspension will be conducted 
annually. If it is determined that the domestic industry has been 
negatively impacted, appropriate modifications will be proposed to the 
suspension.
    This suspension reflects the Department's appraisal of the need to 
revise the dates of the regulatory period for imported oranges, as 
hereinafter set forth, to effectuate the declared policy of the Act.
    After thoroughly analyzing the comments received and other 
available information the Department has concluded that its decision to 
suspend the orange regulations during the above mentioned period is 
appropriate.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this final rule.
    Based on the above, the Administrator of the AMS has determined 
that this 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 suspension, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because this suspension should be in 
effect on July 1, 1995. Also, a 20-day comment period was provided for 
in the proposed rule.

List of Subjects

7 CFR Part 906

    Oranges, Marketing agreements, Reporting and recordkeeping 
requirements.

7 CFR Part 944

    Avocados, Food grades and standards, Grapes, Imports, Kiwifruit, 
Limes, Olives, Oranges.

    For the reasons set forth in the preamble, 7 CFR parts 906 and 944 
are amended as follows:

PART 906--ORANGES GROWN IN THE LOWER RIO GRANDE VALLEY IN TEXAS

    1. The authority citation for both 7 CFR parts 906 and 944 
continues to read as follows:

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

    2. In Sec. 906.365, a new paragraph (a)(7) is added, to read as 
follows:


Sec. 906.365  Texas Orange and Grapefruit Regulation 34.

    (a) * * *
    (7) Beginning in 1995, this paragraph (a) is suspended each year 
from July 1 through August 31 of each year.
* * * * *

PART 944--FRUITS; IMPORT REGULATIONS

    3. In Sec. 944.312, paragraph (a) is amended, by adding a sentence 
at the end of the paragraph to read as follows:


Sec. 944.312  Orange import regulation.

    (a) * * * Effective July 1 through August 31 of each year this 
paragraph is suspended.
* * * * *
    Dated: June 22, 1995.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 95-15858 Filed 6-26-95; 5:08 pm]
BILLING CODE 3410-02-P