[Federal Register Volume 61, Number 252 (Tuesday, December 31, 1996)]
[Rules and Regulations]
[Pages 69011-69016]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-33268]


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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

7 CFR Part 905

[Docket No. FV96-905-2FR]


Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida; 
Procedures to Limit the Volume of Small Florida Red Seedless Grapefruit

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule adds a section to the rules and regulations 
currently prescribed under the marketing order for oranges, grapefruit, 
tangerines, and tangelos grown in Florida. The marketing order is 
administered locally by the Citrus Administrative Committee 
(committee). This rule establishes procedures for limiting the volume 
of small red seedless grapefruit entering the fresh market during the 
first 11 weeks of each season. The committee believes these procedures 
could be used, when necessary, to help stabilize the market and improve 
grower returns.

EFFECTIVE DATE: January 30, 1997.

FOR FURTHER INFORMATION CONTACT: William G. Pimental, Southeast 
Marketing Field Office, AMS, USDA, P.O. Box 2276, Winter Haven, Florida 
33883-2276; telephone: (941) 299-4770, Fax: (941) 299-5169; or Caroline 
Thorpe, Marketing Order Administration Branch, Fruit and Vegetable 
Division, AMS, USDA, P.O. Box 96456, Room 2522-S, Washington, D.C. 
20090-6456; telephone: (202) 720-8139, Fax: (202) 720-5698. Small 
businesses may request information on compliance with this regulation 
by contacting: Jay Guerber, Marketing Order Administration Branch, 
Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456, room 2523-S, 
Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 720-
5698.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing 
Agreement and Marketing Order No. 905 (7 CFR Part 905), as amended, 
regulating the handling of oranges, grapefruit, tangerines, and 
tangelos grown in Florida, hereinafter referred to as the ``order.'' 
The 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 final 
rule in conformance with Executive Order 12866.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have retroactive 
effect. This final 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 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 request 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 to review the Secretary's 
ruling on the petition, provided an action is filed not later than 20 
days after date of the entry of the ruling.
    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has 
considered the economic impact of this final rule 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 approximately 100 handlers subject to regulation under 
the marketing order and approximately 11,000 producers of citrus in the 
regulated area. Small agricultural service firms, which include 
handlers, have been defined by the Small Business Administration (13 
CFR

[[Page 69012]]

121.601) as those whose annual receipts are 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 and 
producers of citrus grown in Florida may be classified as small 
entities.
    This final rule adds procedures to the rules and regulations 
sections of the order. It does not establish any volume regulation. Any 
implementation of these procedures concerning regulation will require 
further committee action and additional public rulemaking by the 
Department.
    However, if the procedures in this rule were used and volume 
regulations established, all growers and handlers would be impacted 
equitably. Before any implementation would occur, the committee would 
meet and consider any and all economic data available. The goal of this 
rule is to provide an additional tool, if needed, to help stabilize the 
price of red grapefruit. In the past three seasons, during the period 
covered by this rule, prices of red seedless grapefruit have fallen 
from an average f.o.b. of $7.80 per box to an average f.o.b. of $5.50 
per box. On tree prices for fresh red seedless grapefruit have declined 
steadily from $9.60 per box during the 1989-90 season, to $3.45 per box 
during the 1994-95 season. In many cases, prices during the past two 
seasons have provided returns less than production costs. This price 
reduction is forcing many small producers out of business. A stabilized 
price that returns a fair market value would be beneficial to both 
small and large producers and handlers.
    Therefore, based on this information, the AMS has determined that 
this action will not have a significant economic impact on a 
substantial number of small entities.
    The order provides for the establishment of grade and size 
requirements for Florida citrus. These grade and size requirements are 
designed to provide fresh markets with citrus fruit of acceptable 
quality and size, thereby maintaining consumer confidence for fresh 
Florida citrus. This helps create buyer confidence and contributes to 
stable marketing conditions. This is in the interest of producers, 
handlers, and consumers, and is designed to increase returns to Florida 
citrus producers. The current minimum grade standard for red seedless 
grapefruit is U.S. No. 1, and the minimum size requirement is size 56 
(at least 3\5/16\ inches in diameter).
    This rule establishes procedures for limiting the volume of small 
red seedless grapefruit entering the fresh market during the first 11 
weeks of each season. The red seedless grapefruit season runs from mid-
September to May. This rule provides an additional tool under the order 
to help stabilize the market and improve returns to growers. These 
changes were recommended by the committee at its meeting on May 24, 
1996, by a 10 to 4 vote.
    Section 905.52 of the Florida citrus marketing order provides 
authority to limit shipments of any grade or size, or both, of any 
variety of Florida citrus. Such limitations may restrict the shipment 
of a portion of a specified grade or size of a variety. Under such a 
limitation, the quantity of such grade or size that may be shipped by a 
handler during a particular week shall be established as a percentage 
of the total shipments of such variety by such handler in a prior 
period, established by the committee and approved by the Secretary, in 
which the handler shipped such variety. This rule adds Sec. 905.153 to 
the rules and regulations, establishing a specified prior period and 
other procedures necessary to limit the volume of small red seedless 
grapefruit, sizes 48 and 56, entering the fresh market during the first 
11 weeks of the season.
    Currently, there are no limitations on the amount of size 48 and 
size 56 red seedless grapefruit that can be shipped to market. This 
rule in itself does not limit shipments, but outlines procedures to do 
so if needed. Implementation of these procedures to limit shipments 
would require further rulemaking.
    The committee recommended this rule to address problems currently 
facing the industry. For the past few seasons, returns on red seedless 
grapefruit have been at all time lows, often not returning the cost of 
production. Fifty-nine percent of red seedless grapefruit is shipped to 
fresh market channels. There is a processing outlet for grapefruit not 
sold into the fresh market. The vast majority of processing is 
squeezing the grapefruit for juice. Because of the properties of the 
juice of red seedless grapefruit, including problems with color, the 
processing outlet is limited, and not currently profitable.
    Several areas of new plantings in the southern growing region are 
just beginning to bear fruit. Young trees normally produce mostly small 
fruit when they first come into production. Florida producers and 
handlers realize that these new acres will add to the abundance of 
small sizes of red seedless grapefruit.
    The committee believes that to stabilize the market and improve 
returns to producers, demand for fresh red seedless grapefruit must be 
stabilized and increased. One problem contributing to the current state 
of the market is the excessive number of small sized grapefruit shipped 
early in the marketing season. While there is a market for early 
grapefruit, the shipment of large quantities of small red seedless 
grapefruit in a short period, oversupplies the fresh market for these 
sizes and negatively impacts the market for all sizes.
    The committee believes that the overshipment of smaller sized red 
seedless grapefruit early in the season has contributed to below 
production cost returns for producers. Based on statistical information 
from past seasons, there is an indication that once shipments of sizes 
48 and 56 reach levels above 250,000 cartons a week, prices decline on 
those and most other sizes of red seedless grapefruit. Thus, even 
though later in the season the crop has sized to naturally limit the 
amount of smaller sizes available for shipment, the price structure in 
the market has already been negatively affected.
    For the majority of the season, larger sizes return better prices 
than smaller sizes. If these small grapefruit were allowed to remain on 
the tree to increase in size and maturity, they could provide greater 
returns to producers. Delaying the harvest of small sizes may also 
extend the season, thereby increasing the total volume of fresh 
shipments and improving producer returns. Without volume regulation, 
the industry has been unable to limit the shipments of small sizes. The 
committee believes that if shipments of small sizes could be maintained 
at around 250,000 cartons a week, prices should stabilize and demand 
for larger, more profitable sizes should increase.
    Similar procedures to this rule are already in place for Dancy 
tangerines under Sec. 905.152. While the committee has not utilized 
these procedures for several years, they were successfully implemented 
for several seasons.
    Under these procedures, the authority to limit the shipment of 
sizes 48 and 56 red seedless grapefruit will only be available for the 
11-week period from the third Monday in September (week #1) through the 
first Sunday in December (week #11), hereinafter called the regulatory 
period. The committee recommended these weeks for regulation because 
the majority of small sizes are shipped during this period. By the end 
of the regulatory period, fruit has begun to size naturally, and there 
are fewer small sizes available.

[[Page 69013]]

    The committee may recommend that only a certain percentage of size 
48 (3\9/16\ minimum diameter in inches) and size 56 (3\5/16\ minimum 
diameter in inches) red seedless grapefruit be made available for 
shipment into fresh market channels for any week or weeks during the 
regulatory period. Should the committee decide to recommend the 
limitation of shipments of sizes 48 and 56 red seedless grapefruit, 
they would meet and recommend to the Secretary a percentage on which to 
base the amount of sizes 48 and 56 that could be shipped during a 
particular week or weeks during the regulatory period. The committee 
realizes that markets for these sizes do exist. Therefore, the 
percentage set could not be less than 25 percent of the calculated 
shipment base. These procedures are designed not to eliminate shipments 
of sizes 48 and 56, but to keep them from saturating the entire market.
    Section 905.52 provides that whenever any size limitation restricts 
the shipment of a portion of a specified size, the quantity of such 
size that may be shipped by a handler during a particular week shall be 
established as a percentage of the total shipments of such variety by 
such handler in such prior period as established by the committee and 
approved by the Secretary.
    This final rule establishes the prior period as an average week 
within the immediately preceding five seasons. An average week would be 
calculated as follows. The total red seedless grapefruit shipments by a 
handler during the 33-week period beginning the third Monday in 
September and ending the first Sunday in May during the past five 
seasons would be added and divided by five to establish an average 
season. This average season is then divided by the 33 weeks in a season 
to derive the average week. This week is the basis for each shipper for 
each of the 11 weeks contained in the regulation period.
    To illustrate, suppose Handler A shipped a total of 50,000 cartons, 
65,000 cartons, 45,000 cartons, 80,000 cartons, and 25,000 cartons of 
red seedless grapefruit in the last five seasons, respectively. Adding 
these season totals and dividing by five yields an average season of 
53,000 cartons. The average season would then be divided by 33 weeks to 
yield an average week, in this case, 1,606 cartons. This would be 
Handler A's base.
    The committee chose to use the past five seasons for the average 
season to provide the most accurate picture of an average season. The 
use of an average week helps adjust for variations in growing 
conditions that may affect when fruit matures in different seasons and 
growing areas. The committee believes that this definition of prior 
period provides each handler with an equitable base from which to 
establish shipments.
    The average week for handlers with less than five previous seasons 
of shipments is to be calculated by averaging the total shipments for 
the seasons they did ship red seedless grapefruit during the 
immediately preceding five years and dividing that average by 33. New 
handlers with no record of shipments would have no prior period on 
which to base their average week. Therefore, if a volume regulation was 
established before such handlers have shipped any red seedless 
grapefruit, the new handlers could ship small sizes as a percentage of 
their total shipments equal to the percentage applied to other 
handlers' base. Once new handlers have established shipments, the 
average week would be calculated as an average of the weeks they have 
shipped during the current season.
    To use these new procedures, the committee would meet and recommend 
a base percentage of sizes 48 and 56 that could enter the fresh market 
in any week or weeks from the first Monday in September through the 
first Sunday in December. If approved by the Secretary, this percentage 
would be applied to each handler's average week of fresh shipments to 
determine the amount (allocation) of sizes 48 and 56 red grapefruit 
each handler could ship. Each regulation period would begin Monday at 
12:00 a.m. and end at 11:59 p.m. the following Sunday, since most 
handlers keep records based on Monday being the beginning of the work 
week.
    When a size limitation is recommended to restrict the shipment 
during a particular week, the committee would compute each handler's 
allotment by multiplying the handler's average week by the percentage 
established by regulation for that week. Such set percentage could vary 
from week to week, but could not be less than 25 percent. The committee 
would notify each handler prior to the particular week of the quantity 
of sizes 48 and 56 red seedless grapefruit such handler could handle 
during a particular week.
    To provide handlers with some flexibility, these procedures provide 
allowances for overshipments, loans, and transfers of allotment. These 
allowances should allow handlers the opportunity each week to supply 
their markets while limiting the impact of small sizes.
    During any regulation week for which the Secretary has fixed the 
percentage of sizes 48 and 56 red seedless grapefruit, any person who 
has received an allotment could handle, in addition to their weekly 
allotment, an amount of size 48 and 56 red seedless grapefruit not to 
exceed 10 percent of that week's allotment. The quantity of 
overshipments would be deducted from the handler's allotment for the 
following week. Overshipments would not be allowed during week 11 
because there would be no allotments the following week from which to 
deduct the overshipments.
    If handlers fail to use their entire allotments in a given week, 
the amounts undershipped would not be carried forward to the following 
week. However, a handler to whom an allotment has been issued could 
lend or transfer all or part of such allotment (excluding the 
overshipment allowance) to another handler. In the event of a loan of 
allotment, each party would, prior to the completion of the loan 
agreement, notify the committee of the proposed loan and date of 
repayment. If a transfer of allotment is desired, each party would 
promptly notify the committee so that proper adjustments of the records 
could be made. In each case, the committee would confirm in writing all 
such transactions prior to the following week. The committee could also 
act on behalf of handlers wanting to arrange allotment loans or 
participate in the transfer of allotment. Repayment of an allotment 
loan would be at the discretion of the handlers party to the loan.
    In considering these procedures, the committee discussed several 
possible alternatives. One alternative considered was an amendment to 
the marketing order. The amendment would have changed the language 
regarding the ``prior period'' in section 905.52. However, this 
alternative was rejected because of the time required to amend the 
order.
    The committee also discussed limiting or eliminating only shipments 
of size 56 grapefruit. However, the committee found that it is 
important to include both sizes 48 and 56 for this regulation to be 
effective. Also, the committee did not want to eliminate a size 
entirely. They realize there is a market for small sizes and wish to 
allow handlers to take advantage of this market without negatively 
affecting the market for other sizes.
    Other concerns were raised during discussion of these procedures. 
One committee member questioned whether these procedures would allow 
him to continue to increase his business. It was explained that this 
action would only put tools in place to allow the limitation

[[Page 69014]]

of just a certain percentage of the smaller sized red seedless 
grapefruit. A handler would not in any way be limited from shipping any 
amount of larger sizes. Another concern raised was the impact these 
procedures would have on harvesting. It was explained again that this 
rule would just establish procedures. However, if implemented, it would 
require more selective picking of only the sizes desired, something 
that many producers are doing already.
    After a lengthy discussion, the committee decided that it needs to 
have available a tool to regulate shipments of small sized red seedless 
grapefruit early in each marketing season. The committee voted to 
recommend the establishment of these procedures to provide them with 
that tool.
    The committee reports that it expects that more red seedless 
grapefruit will be produced in Florida during the 1996-97 season than 
last season. The committee also expects that supplies of fresh Florida 
red seedless grapefruit will be adequate to meet consumer demand during 
the entire 1996-97 season.
    This rule does not affect the order provision that handlers may 
ship up to 15 standard packed cartons (12 bushels) of fruit per day 
exempt from grade and size requirements. Fruit shipped in gift packages 
that are individually addressed and not for resale, and fruit shipped 
for animal feed are also exempt from grade and size requirements under 
specific conditions. Also, fruit shipped to commercial processors for 
conversion into canned or frozen products or into a beverage base are 
not subject to the handling requirements under the order.
    Section 8(e) of the Act requires that whenever grade, size, quality 
or maturity requirements are in effect for certain commodities under a 
domestic marketing order, including grapefruit, imports of that 
commodity must meet the same or comparable requirements. This rule does 
not change the minimum grade and size requirements under the order. 
Therefore, no change is necessary in the grapefruit import regulations 
as a result of this action.
    The proposed rule concerning this action was published in the 
August 28, 1996, Federal Register (61 FR 44187), with a 30-day comment 
period ending September 27, 1996. Twenty four comments were received, 
thirteen in favor and seven in opposition to the proposed rule. The 
thirteen comments in favor were from handlers and growers. In addition, 
four comments were received from handlers and growers after the closing 
date for comments. These comments were in favor of the proposed rule 
and raised no new issues for those received prior to the close of the 
comment period.
    In his comment, the manager of the committee stated that the 
committee went to great lengths to ensure that the entire Florida 
citrus industry was included in the development of the proposed rule. 
At all times the interests of consumers of fresh Florida grapefruit 
were foremost.
    Ten commenters supporting this action mentioned that past history 
has shown that the overshipment of small sizes early in the season has 
resulted in reduced prices. They believe the provisions of this rule 
should be sufficient to address this problem. One commenter stated that 
this rule, if instituted, would allow the committee to bring the early 
volume of small size red grapefruit more closely in line with the 
normal industry shipments occurring later in the season. Historically, 
it is in the early weeks of a season when shipments of these small size 
red grapefruit have substantially exceeded 25 percent of total 
shipments, resulting in market gluts and the collapse of prices.
    Ten commenters stated that regulation to control small sizes in the 
early season would have a stabilizing effect on the market. Several 
stated that the rule would provide a mechanism to improve orderly 
marketing of small size red grapefruit during the early season without 
causing hardships for any growers or handlers.
    Nine of the commenters in favor of the regulation mentioned the 
provision that limits the percentage set to a minimum of 25 percent. 
Many of these believe that this will prevent excessive limitation, 
while allowing handlers to service their customers. Several also said 
that the 25 percent lower limit assures a good flow to market of these 
small size red grapefruit. Implementing these procedures could hold 
shipments of small sizes closer to the percentage shipped during the 
latter part of the season.
    In five of the comments supporting the regulation, the regulatory 
period of eleven weeks was referenced. The commenters believe that the 
period of regulation contemplated is when the industry has repeatedly 
experienced overshipment of small sizes. After the first week in 
December, the movement of smaller fruit becomes more stable, reducing 
the need for regulation.
    In regards to allotment, eight of the comments cited and supported 
the flexibility the provisions afford handlers to acquire additional 
allotment when needed. In their comments, they recognized the 
overshipment provisions, the ability to transfer allotment, and 
allotment loans, indicating that handlers should be able to find 
adequate allotment to meet market demand.
    Seven comments in opposition to the proposed rule were received. 
One of the opposing comments stated that grapefruit should be marketed 
when ripe. Although grapefruit is a perishable commodity, mature red 
grapefruit can be stored on the tree and picked as needed to provide 
the market with a more even distribution of supplies during the season. 
This on-tree storage feature is particularly valuable early in the 
season when a large portion of the crop is often mature but small in 
size. By leaving the fruit on the tree, it can continue to grow to a 
larger size, and larger sizes usually yield a higher price, thereby 
increasing returns to growers.
    Another of the opposing comments stated that early picking and 
shipping help avoid losses from weather related problems (frost). A 
freeze is a possibility in any season. Industry practices and grove 
location have combined to work to minimize freeze damage and to extend 
the grapefruit marketing season. The provisions of this rule would not 
prevent handlers from marketing fruit early. Implementing these 
procedures would only restrict the movement of small red grapefruit. It 
is the glut of small red grapefruit that damages the market for all 
sizes. Based on its analysis, the Economic Analysis Branch, of the 
Fruit and Vegetable Division, of the AMS, (EAB) has determined that 
during each of the last three seasons, the on-tree equivalent price for 
sizes 48 and 56 red Florida grapefruit has dropped below $1.00 per 
carton. These low prices also pulled the prices for larger sizes down. 
With on-tree prices dropping below cost of production, the impact on 
the industry may be similar to the effects of the freeze.
    One opposing comment stated that under this regulation, returns to 
the packinghouse and grower would be lower, the season would be 
shortened, and that farm laborers would be dismissed earlier. The 
committee believes using these procedures could increase returns to 
growers while providing consumers an adequate supply of the commodity 
in the marketplace. Implementing these procedures could actually 
lengthen the season. If the grapefruit remain on the tree longer, they 
will increase in size and be of greater value later in the season. An 
extended season would also benefit laborers who would be needed for a 
longer period of time. The aim of this rule is to establish procedures 
that may be used to provide steady supplies at reasonable and stable 
prices, thereby

[[Page 69015]]

protecting the interests of growers, packers, workers in the industry, 
and consumers of red grapefruit.
    Several opposing comments were received concerning the rule and the 
possible loss of market share, particularly in export markets that 
demand sizes 48 and 56, to other grapefruit growing areas. If the 
provisions of this rule are implemented, handlers will still be able to 
ship a percentage of small size grapefruit to those markets that 
require them and use larger sizes to fill their other markets. The 
provisions established by this rule would prevent market restrictions 
below 25 percent. Based on past seasons, even if percentages were 
established at 25 percent, ample quantities should be available to 
furnish those markets which demand small sizes.
    The purpose of implementing this rule would not be to eliminate 
small size red grapefruit. It is merely to prevent a surplus of small 
size red grapefruit from damaging the overall grapefruit market.
    Another commenter opposing the rule expressed concern that market 
share could be lost to Texas. According to the EAB, limiting shipments 
of small Florida grapefruit would probably not result in a major shift 
to Texas grapefruit because the Texas industry is much smaller and 
would have higher freight costs to some markets supplied by Florida.
    One opposing comment stated that the rule had not been fully 
explained. The committee has had this rule under advisement since it 
received industry requests in December 1995. The committee started 
holding subcommittee meetings in February 1996 and held many informal 
meetings with industry groups to discuss the proposal. On May 16, 1996, 
another subcommittee meeting was held, and people who had demonstrated 
opposition were specifically invited to make comments and get their 
opinions on record. Throughout the process, the proposal was modified 
based on questions and concerns of the industry. These changes were 
shared at industry meetings and through committee mailings.
    On May 23, 1996, the committee met and recommended this regulation 
after much discussion. Several different motions were offered at this 
meeting. Prior to any vote, the motions were carefully restated, so 
that members understood the issue they were voting on. All motions 
advanced were discussed and there was opportunity for questions.
    One commenter opposed the method of calculating allotments. He 
believes that because he has not shipped much fruit early in past 
seasons that his allotment will not reflect his true shipments. The 
committee discussed several methods of measuring a handler's volume to 
determine this base. It was decided that shipments for the five 
previous years from the period from the third Monday in September to 
the first Sunday the following May should be used for calculation 
purposes. This bases allotment on a 33 week period of shipments, not 
just a handler's early shipments. This was done specifically to 
accommodate small shippers or light volume shippers, who may not have 
shipped much grapefruit in the early season. This method of calculation 
provides a fair allocation of allotment.
    This commenter also expressed concern regarding whether his 
allotment would be enough to cover his customer base. The provisions of 
this rule provide flexibility through several different options. 
Handlers have the privilege to transfer, borrow or loan allotment based 
on their needs in a given week. Handlers also have the option of 
overshipping their allotment by 10 percent in a week, as long as the 
overshipment is deducted from the following week's shipments.
    One opposing comment stated that restricting movement of grapefruit 
could do more harm than good and interfere with the orderly marketing 
of this product. These procedures are designed to promote orderly 
marketing. The purpose is to furnish sufficient supplies of red 
grapefruit to fresh markets early in the season, while avoiding the 
possible price-depressing effect of saturating the market with small 
sizes. This is particularly important during the first few months of 
the season when supplies of small sizes are heaviest. The declaration 
of policy in the Act includes a provision concerning establishing and 
maintaining such orderly marketing conditions as will provide, in the 
interest of producers and consumers, an orderly flow of the supply of a 
commodity throughout the normal marketing season to avoid unreasonable 
fluctuations in supplies and prices.
    Utilizing these procedures will contribute to the Act's objectives 
of orderly marketing and improving producers' returns. According to 
EAB, since sizes 48 and 56 red grapefruit are a small part of the total 
supply of Florida red grapefruit, limiting shipments of these sizes 
would have only a moderate effect on the total quantity shipped. It 
may, however, help to prevent the average price for all Florida red 
grapefruit from being reduced to below the cost of production.
    Many opposition comments addressed the proposed rule as if it were 
in place and implemented. As previously stated, this rule merely 
establishes procedures. To implement these procedures, the committee 
would hold public meetings to discuss and recommend a percentage of 
size regulation to the Secretary. Additional rulemaking would be 
required, and there would be additional opportunity to comment.
    After thoroughly analyzing the comments received and other 
available information, the Department has concluded that this final 
rule is appropriate, and that no changes to the rule are being made in 
response to the comments.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection requirements that are contained 
in this rule have been previously approved by the Office of Management 
and Budget (OMB) and have been assigned OMB No. 0581-0094.
    After consideration of all relevant material 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.

List of Subjects in 7 CFR Part 905

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

    For the reasons set forth in the preamble, 7 CFR part 905 is 
amended as follows:

PART 905--ORANGES, GRAPEFRUIT, TANGERINES, AND TANGELOS GROWN IN 
FLORIDA

    1. The authority citation for 7 CFR Part 905 continues to read as 
follows:

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

    2. A new Sec. 905.153 is added to read as follows: Sec. 905.153 
Procedure for determining handlers' permitted quantities of red 
seedless grapefruit when a portion of sizes 48 and 56 of such variety 
is restricted.
    (a) For the purposes of this section, the prior period specified in 
Sec. 905.52 is hereby established as an average week within the 
immediately preceding five seasons. Each handler's average week shall 
be computed by adding the total volume of red seedless grapefruit 
handled in the immediately preceding five seasons and dividing the 
total by 165. The average week for handlers with less than five 
previous seasons of

[[Page 69016]]

shipments shall be calculated by adding the total volume of shipments 
for the seasons they did ship red seedless grapefruit, divide by the 
number of seasons, divide further by 33. New handlers with no record of 
shipments could ship size 48 and 56 red seedless grapefruit as a 
percentage of total shipments equal to the percentage applied to other 
handlers' average week; once such handlers have recorded shipments, 
their average week shall be calculated as an average of total shipments 
for the weeks they have shipped red seedless grapefruit during the 
current season. When used in the regulation of red seedless grapefruit, 
the term season means the weeks beginning the third Monday in September 
and ending the first Sunday in the following May. The term regulation 
period means the 11 weeks beginning the third Monday in September and 
ending the first Sunday in December of the current season.
    (b) When a size limitation restricts the shipment of a portion of 
sizes 48 and 56 red seedless grapefruit during a particular week as 
provided in Sec. 905.52, the committee shall compute the quantity of 
sizes 48 and 56 red seedless grapefruit that may be shipped by each 
handler by multiplying the handler's calculated average week shipments 
of such grapefruit by the percentage established by regulation for red 
seedless grapefruit for that week.
    (c) The committee shall notify each handler of the quantity of size 
48 and 56 red seedless grapefruit such handler may handle during a 
particular week.
    (d) During any regulation week for which the Secretary has fixed 
the percentage of sizes 48 and 56 red seedless grapefruit, any person 
who has received an allotment may handle, in addition to their total 
allotment available, an amount of size 48 and 56 red seedless 
grapefruit up to 10 percent greater than their allotment. The quantity 
of the overshipment shall be deducted from the handler's allotment for 
the following week. Overshipments will not be allowed during week 11. 
If the handler fails to use his or her entire allotment, the under 
shipment is not carried forward to the following week.
    (e) Any handler may transfer or loan any or all of their shipping 
allotment (excluding the overshipment allowance) of size 48 and 56 red 
seedless grapefruit to any other handler. Each handler party to such 
transfer or loan shall promptly notify the committee so the proper 
adjustment of records may be made. In each case, the committee shall 
confirm in writing all such transactions, prior to the following week, 
to the handlers involved. The committee may act on behalf of handlers 
wanting to arrange allotment loans or participate in the transfer of 
allotments.

    Dated: December 24, 1996.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 96-33268 Filed 12-30-96; 8:45 am]
BILLING CODE 3410-02-P