[Federal Register Volume 63, Number 14 (Thursday, January 22, 1998)]
[Rules and Regulations]
[Pages 3247-3251]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1430]



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 Rules and Regulations
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  Federal Register / Vol. 63, No. 14 / Thursday, January 22, 1998 / 
Rules and Regulations  

[[Page 3247]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 905 and 944

[Docket No. FV98-905-2 IFR]


Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida 
and Imported Grapefruit; Relaxation of the Minimum Size Requirement for 
Red Seedless Grapefruit

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This interim final rule makes changes in the regulations under 
the Florida citrus marketing order and the grapefruit import 
regulations. This rule relaxes the minimum size requirement for red 
seedless grapefruit and for red seedless grapefruit imported into the 
United States from size 48 (3\9/16\ inches diameter) to size 56 (3\5/
16\ inches diameter). The Citrus Administrative Committee (Committee), 
the agency that locally administers the marketing order for oranges, 
grapefruit, tangerines, and tangelos grown in Florida, unanimously 
recommended this change. This change allows handlers and importers to 
ship size 56 red seedless grapefruit through November 8, 1998.

DATES: Effective January 23, 1998, through November 8, 1998; comments 
received by March 23, 1998 will be considered prior to issuance of a 
final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent in triplicate to the Docket 
Clerk, Fruit and Vegetable Division, AMS, USDA, Room 2525-S, P.O. Box 
96456, Washington, D.C. 20090-6456; Fax: (202) 205-6632. All comments 
should reference the docket number and the date and page number of this 
issue of the Federal Register and will be available for public 
inspection in the office of the Docket Clerk during regular business 
hours.

FOR FURTHER INFORMATION CONTACT: William G. Pimental, Southeast 
Marketing Field Office, F&V, AMS, USDA, P.O. Box 2276, Winter Haven, 
Florida 33883; telephone: (941) 299-4770, Fax: (941) 299-5169; or Anne 
M. Dec, Marketing Order Administration Branch, F&V, AMS, USDA, room 
2522-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202) 
720-2491, Fax: (202) 720-5698. Small businesses may request information 
on compliance with this regulation by contacting Jay Guerber, Marketing 
Order Administration Branch, F&V, AMS, USDA, room 2525-S, P.O. Box 
96456, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 
720-5698.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 84 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 marketing 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 rule is also issued under section 8e of the Act, which 
provides that whenever specified commodities, including grapefruit, are 
regulated under a Federal marketing order, imports of these commodities 
into the United States are prohibited unless they meet the same or 
comparable grade, size, quality, or maturity requirements as those in 
effect for the domestically produced commodities.
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, 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 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 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.
    The order for Florida citrus provides for the establishment of 
minimum grade and size requirements with the concurrence of the 
Secretary. The grade and size requirements are designated to provide 
fresh markets with 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 growers, handlers, and consumers, and is 
designed to increase returns to Florida citrus growers. The current 
minimum grade standard for red seedless grapefruit is U.S. No. 1. The 
minimum size requirement for domestic shipments is size 56 (at least 
3\5/16\ inches in diameter) through November 8, 1997, and size 48 (3\9/
16\ inches in diameter) thereafter. The current minimum size for export 
shipments is size 56 throughout the year.
    This interim final rule invites comments on a change to the order's 
rules and regulations relaxing the minimum size requirement for 
domestic shipments of red seedless grapefruit. This action allows for 
the continued shipment of size 56 grapefruit. This rule relaxes the 
minimum size from size 48 (3\9/16\ inches diameter) to size 56 (3 \5/
16\ inches diameter) through November 8, 1998. Absent this change, the 
minimum size would be size 48 (3\9/16\ inches diameter). The Committee 
met on October 14 and December 16, 1997, and unanimously recommended 
this action.

[[Page 3248]]

    Section 905.52 of the order, in part, authorizes the Committee to 
recommend minimum grade and size regulations to the Secretary. Section 
905.306 (7 CFR 905.306) specifies minimum grade and size requirements 
for different varieties of fresh Florida grapefruit. Such requirements 
for domestic shipments are specified in Sec. 905.306 in Table I of 
paragraph (a), and for export shipments in Table II of paragraph (b). 
This rule adjusts Table I to reflect the minimum size of 56 through 
November 8, 1998. Minimum grade and size requirements for grapefruit 
imported into the United States are currently in effect under 
Sec. 944.106 (7 CFR 944.106). Export requirements are not changed by 
this rule.
    The Committee originally met to discuss this issue on October 14, 
1997, and recommended releasing size 56 red grapefruit for a limited 
time period this season. They voted to allow handlers to ship size 56 
red seedless grapefruit through January 11, 1998, to give the Committee 
time to determine the market effect of size 56.
    The Committee met again on December 16, 1997, through an emergency 
telephone meeting. The meeting was called to determine whether the 
Committee wanted to release size 56 for the remainder of the season. 
The Committee voted unanimously to extend the release of size 56 
through November 8, 1998.
    While wanting to give handlers the opportunity to continue to 
market size 56, the Committee also wanted the opportunity to review the 
effect of size 56 on the domestic market after the percentage of size 
rule expired November 30, 1997 (62 FR 58633; October 30, 1997). The 
percentage of size rule controlled the volume of sizes 48 and 56 that 
was shipped in a given week, to both domestic and export markets. There 
is a limited market for small sizes. However, the largest part of this 
market is to export markets. The Committee is not sure to what extent 
there is domestic demand for size 56. This minimum size change pertains 
to the domestic market, and does not change the minimum size for export 
shipments which will continue at size 56 throughout the season.
    To determine if there is a domestic market for size 56, and the 
effect of its presence on the market, the Committee recommended, on 
October 14, 1997, allowing shipments of size 56 red seedless grapefruit 
through January 11, 1998. The Committee agreed to revisit the issue to 
evaluate the impact of size 56 on the market after the expiration of 
volume regulation.
    The Committee revisited the issue during the meeting December 16, 
1997, and determined that size 56 should not be released until November 
8, 1998. In making its recommendation, the Committee considered 
estimated supplies and current shipments. The Committee examined the 
size distribution information available for the current season. On 
December 12, 1997, the Florida Agricultural Statistics Service (FASS) 
reduced the marketable crop estimate for red seedless grapefruit by two 
million boxes, or approximately seven percent for the 1997-98 season. 
FASS also reported that red seedless grapefruit size as measured in 
November, was 30.6 percent size 56 and smaller as compared to 35.5 
percent as measured in November last year. This in turn compares to 
only 16.8 percent measuring size 56 or smaller in November of 1995. So, 
even though red seedless grapefruit are running larger than last 
season, there are a fair number of small grapefruit.
    The Committee also reviewed shipment data available through 
November 23 of this season. Thus far, size 56 red seedless grapefruit 
represents only 3.7 percent of total domestic shipments. Comparatively, 
through the same time period, 11 percent of all red seedless grapefruit 
shipments from Florida, domestic and export was size 56. Of the size 56 
red seedless grapefruit shipped, 18 percent went to the domestic 
market, while 82 percent was shipped to the export market.
    In its discussion, the Committee recognized that fruit was 
continuing to size. One member commented that fruit that had measured 
size 56 in October, had sized up one size. This was helping to match 
supplies of size 56 with demand. The Committee did have several 
concerns. One topic that was raised was the currency and economic 
problems currently facing the Pacific Rim countries. These countries 
traditionally have been good markets for size 56 grapefruit. The 
Committee was concerned that current conditions could reduce demand, 
and alternative outlets would need to be available. The Committee 
agreed that it would be advantageous to have the ability to ship size 
56 red seedless grapefruit to the domestic market should problems 
materialize in the export market.
    One Committee member asked whether Texas was planning to market 
size 56 grapefruit this season. The Committee was informed that Texas 
would be selling size 56 for the entire season. The Committee believes 
that some domestic markets may have been developed for size 56 and that 
handlers should continue to supply those markets.
    Based on the available information, the Committee unanimously 
recommended that the minimum size for shipping red seedless grapefruit 
to the domestic market should be size 56 through November 8, 1998.
    This rule will have a beneficial impact on producers and handlers 
since it will permit Florida grapefruit handlers to make available 
those sizes of fruit needed to meet anticipated market demand for the 
1997-98 season. This will provide for the maximization of shipments to 
fresh market channels during this period. Additionally, importers will 
be favorably affected by this change since the relaxation of the 
minimum size regulation will also apply to imported grapefruit.
    Section 8e of the Act provides that when certain domestically 
produced commodities, including grapefruit, are regulated under a 
Federal marketing order, imports of that commodity must meet the same 
or comparable grade, size, quality, and maturity requirements. Since 
this rule relaxes the minimum size requirement under the domestic 
handling regulations, a corresponding change to the import regulations 
is necessary.
    Minimum grade and size requirements for grapefruit imported into 
the United States are currently in effect under Sec. 944.106 [7 CFR 
944.106]. This rule relaxes the minimum size requirements for imported 
red seedless grapefruit to 3\5/16\ inches in diameter (size 56) for the 
remainder of the 1997-1998 season ending on November 8, 1998, to 
reflect the relaxation being made under the order for grapefruit grown 
in Florida.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this action on small entities. Accordingly, AMS has 
prepared this initial regulatory flexibility analysis.
    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 those established under Federal marketing orders.
    There are approximately 80 Florida citrus handlers subject to 
regulation

[[Page 3249]]

under the marketing order, about 11,000 Florida citrus producers, and 
about 25 grapefruit importers. Small agricultural service firms, which 
include grapefruit handlers and importers, have been defined by the 
Small Business Administration (13 CFR 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.
    Based on the Florida Agricultural Statistics Service and Committee 
data for the 1995-96 season, the average annual f.o.b. price for fresh 
Florida red grapefruit during the 1995-96 season was $5.00 per \4/5\ 
bushel cartons for all grapefruit shipments, and the total shipments 
for the 1995-96 season were 23 million cartons of grapefruit. 
Approximately 20 percent of all handlers handled 60 percent of Florida 
grapefruit shipments. In addition, many of these handlers ship other 
citrus fruit and products which are not included in Committee data but 
would contribute further to handler receipts. Using the average f.o.b. 
price, about 80 percent of grapefruit handlers could be considered 
small businesses under the SBA definition and about 20 percent of the 
handlers could be considered large businesses. The majority of 
handlers, growers, and importers may be classified as small entities.
    Florida shipped approximately 44,224,000 cartons of grapefruit to 
the fresh market during the 1996-97 season. Of these cartons, about 
25,586,000 were exported. In the past three seasons, domestic shipments 
of Florida grapefruit averaged about 18,798,000 cartons. During the 
period 1991 through 1996, imports have averaged 734,800 cartons a 
season. Imports account for less than five percent of domestic 
shipments.
    Section 905.52 of the order, in part, authorizes the Committee to 
recommend minimum grade and size regulations to the Secretary. Section 
905.306 (7 CFR 905.306) specifies minimum grade and size requirements 
for different varieties of fresh Florida grapefruit. This rule relaxes 
the minimum size requirement for domestic shipments of red seedless 
grapefruit from size 48 (3\9/16\ inches diameter) to size 56 (3\5/16\ 
inches diameter) through November 8, 1998. No change is being made in 
the minimum size requirement for export shipments of size 56. Absent 
this rule, the minimum size requirement for domestic shipments would be 
size 48. The motion to allow shipments of size 56 red seedless 
grapefruit through November 8, 1998, was passed by the Committee 
unanimously.
    The Committee originally met to discuss this issue on October 14, 
1997, and recommended releasing size 56 red grapefruit for a limited 
time period this season. They voted to allow handlers to ship size 56 
red seedless grapefruit through January 11, 1998, to give the Committee 
time to determine the market effect of size 56.
    The Committee met again on December 16, 1997, through an emergency 
telephone meeting. The meeting was called to determine whether the 
Committee wanted to release size 56 for the remainder of the season. 
The Committee voted unanimously to extend the release of size 56 
through November 8, 1998.
    In its discussion, the Committee recognized that fruit was 
continuing to size. One member commented that fruit that had measured 
size 56 in October, had sized up one size. This was helping to match 
supplies of size 56 with demand. The Committee did have several 
concerns. One topic that was raised was the currency and economic 
problems currently facing the Pacific Rim countries. These countries 
traditionally have been good markets for size 56 grapefruit. The 
Committee was concerned that current conditions could reduce demand, 
and alternative outlets would need to be available. The Committee 
agreed that it would be advantageous to have the ability to ship size 
56 red seedless grapefruit to the domestic market should problems 
materialize in the export market.
    One Committee member asked whether Texas was planning to market 
size 56 grapefruit this season. The Committee was informed that Texas 
would be selling size 56 for the entire season. The Committee believes 
that some domestic markets may have been developed for size 56 and that 
handlers should continue to supply those markets.
    During the discussion of this rule, the Committee considered the 
costs and benefits of this action. Several members stated that with the 
volume of grapefruit available, the stagnant demand, and concerns 
regarding the Asian export markets, it was important to take advantage 
of any market available. There was also discussion that Texas was 
planning to ship size 56 this season. Some members stated that if they 
eliminated size 56, they would be losing markets. Members agreed that 
maximizing fresh shipments helps grower returns. The Committee has 
released size 56 for the past seven seasons. There should be no 
production adjustment costs associated with this rule.
    This rule is expected to have a positive impact on growers and 
handlers, as it will permit the shipment of smaller sized red seedless 
grapefruit to the domestic market, allowing the industry to meet 
anticipated demand through November 8, 1998. This will provide for the 
maximization of shipments to fresh market channels during this period.
    This regulation lowers the minimum size to size 56. This minimum 
applies to all handlers of red seedless grapefruit. The costs or 
benefits of this rule are not expected to be disproportionately more or 
less for small handlers or growers than for larger entities.
    In 1996, imports of grapefruit totaled 15,000 tons (approximately 
705,880 cartons). The Bahamas were the principal source, accounting for 
95 percent of the total. Remaining imports were supplied by the 
Dominican Republic and Israel. Imported grapefruit enters the United 
States from October through May. Imports account for less than five 
percent of domestic shipments.
    Section 8e of the Act provides that when certain domestically 
produced commodities, including grapefruit, are regulated under a 
Federal marketing order, imports of that commodity must meet the same 
or comparable grade, size, quality and maturity requirements. Because 
this rule changes the minimum size for domestic red seedless grapefruit 
shipments, this change will also be applicable to imported grapefruit. 
This rule relaxes the minimum size to size 56. This regulation will 
benefit importers to the same extent that it benefits Florida 
grapefruit producers and handlers because it allows shipments of size 
56 red seedless grapefruit into U.S. markets through November 8, 1998.
    The Committee discussed alternatives to this action. One 
alternative discussed was the elimination of size 56 grapefruit all 
together. Several members expressed concern that a viable market has 
been developed for a portion of the size 56 grapefruit crop. Not 
allowing handlers to supply this market could result in throwing 
business and money away. Other members pointed out that it could be 
detrimental to supply this market for smaller sizes if that market is 
not profitable and the result is depressed prices for all sizes of 
grapefruit.
    In addition, the Committee recognized that through November, 
regulation was in place to control the amount of size 56 red seedless 
grapefruit entering the market. Under the percentage of size rule, the 
quantity of sizes 48 and/or 56 red seedless grapefruit that may be 
shipped by a handler during a particular

[[Page 3250]]

week is calculated using a recommended percentage. This percentage of 
size rule was in effect through November 30, 1997. The Committee agreed 
that, for the remainder of the 1997-1998 season, no further restriction 
on size 56 was necessary. A motion to eliminate size 56 was rejected.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large red seedless grapefruit handlers 
or importers. As with all Federal marketing order programs, reports and 
forms are periodically reviewed to reduce information collection 
requirements and duplication by industry and public sectors.
    In addition, the Department has not identified any relevant Federal 
rules that duplicate, overlap or conflict with this rule. However, red 
seedless grapefruit must meet the requirements as specified in the U.S. 
Standards for Grades of Florida Grapefruit (7 CFR 51.760 through 
51.784) issued under the Agricultural Marketing Act of 1946 (7 U.S.C. 
1621 through 1627).
    Further, the Committee's October meeting was widely publicized 
throughout the citrus industry and all interested persons were invited 
to attend the meeting and participate in Committee deliberations. Like 
all Committee meetings, the October 14, 1997, meeting was a public 
meeting and all entities, both large and small, were able to express 
their views on this issue. Finally, interested persons are invited to 
submit information on the regulatory and informational impacts of this 
action on small businesses.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this interim final 
rule.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that 
this interim final 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 30 days after publication in the 
Federal Register because: (1) This rule relaxes the minimum size 
requirement currently in effect for red seedless grapefruit grown in 
Florida and red seedless grapefruit imported into the United States; 
(2) Florida grapefruit handlers are aware of this action which was 
unanimously recommended by the Committee, and they will need no 
additional time to comply with the relaxed size requirement; (3) 
shipments of the 1997-98 season Florida red seedless grapefruit crop 
are underway; and (4) this rule provides a 60-day comment period, and 
any comments received will be considered prior to any finalization of 
this interim final rule.

List of Subjects

7 CFR Part 905

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

7 CFR Part 944

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

    For the reasons set forth above, 7 CFR parts 905 and 944 are 
amended as follows:
    1. The authority citation for 7 CFR parts 905 and 944 continues to 
read as follows:

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

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

    2. Section 905.306 is amended by adding entries in Table 1 of 
paragraph (a) for ``seedless, red grapefruit'' to read as follows:


Sec. 905.306  Orange, Grapefruit, Tangerine, and Tangelo Regulation.

    (a) * * *

                                                     Table I                                                    
----------------------------------------------------------------------------------------------------------------
                                                                                                       Minimum  
                                                                                                       diameter 
               Variety (1)                    Regulation period (2)          Minimum grade (3)         (inches) 
                                                                                                         (4)    
----------------------------------------------------------------------------------------------------------------
GRAPEFRUIT                                                                                                      
                                                                                                                
*                  *                  *                  *                  *                  *                
                                                        *                                                       
Seedless, red:                                                                                                  
                                           1/23/98-11/8/98............  U.S. No. 1.................     3-\5/16\
                                           On and after 11/9/98.......  U.S. No. 1.................     3-\9/16\
                                                                                                                
*                  *                  *                  *                  *                  *                
                                                        *                                                       
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* * * * *

PART 944--FRUITS; IMPORT REGULATIONS

    4. Section 944.106 is amended by adding entries in the table in 
paragraph (a) for ``seedless red grapefruit'' to read as follows:


Sec. 944.106  Grapefruit import regulation.

    (a) * * *

----------------------------------------------------------------------------------------------------------------
                                                                                                       Minimum  
                                                                                                       diameter 
      Grapefruit classification  (1)          Regulation period  (2)         Minimum grade  (3)        (inches) 
                                                                                                         (4)    
----------------------------------------------------------------------------------------------------------------
                                                                                                                
*                  *                  *                  *                  *                  *                
                                                        *                                                       
Seedless, red:                                                                                                  
                                           1/23/98-11/8/98............  U.S. No. 1.................      3\5/16\
                                           On and after 11/9/98.......  U.S. No. 1.................      3\9/16\

[[Page 3251]]

                                                                                                                
                                                                                                                
*                  *                  *                  *                  *                  *                
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* * * * *
    Dated: January 15, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-1430 Filed 1-21-98; 8:45 am]
BILLING CODE 3410-02-P