[Federal Register Volume 63, Number 75 (Monday, April 20, 1998)]
[Rules and Regulations]
[Pages 19379-19382]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-10259]



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  Federal Register / Vol. 63, No. 75 / Monday, April 20, 1998 / Rules 
and Regulations  

[[Page 19379]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 905 and 944

[Docket No. FV98-905-2 FIR]


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: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting as a 
final rule, without change, the provisions of an interim final rule 
changing the regulations under the Florida citrus marketing order and 
the grapefruit import regulations. This rule relaxes the minimum size 
requirement for Florida 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.

EFFECTIVE DATE: May 20, 1998.

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) 205-6632. 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) 
205-6632.

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 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 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, 1998, and size 48 (3\9/
16\ inches in diameter) thereafter. The current minimum size for export 
shipments is size 56 throughout the year.
    This rule continues in effect a change to the order's rules and 
regulations relaxing the minimum size requirement for domestic and 
import 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.
    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

[[Page 19380]]

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 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) through 
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 final 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 under the marketing order, about 11,000 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

[[Page 19381]]

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 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, as noted in the initial regulatory flexibility 
analysis, the

[[Page 19382]]

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 were invited to 
submit information on the regulatory and informational impacts of this 
action on small businesses.
    An interim final rule concerning this action was published in the 
Federal Register on January 22, 1998. Copies of the rule were mailed by 
the Committee staff to all Committee members and grapefruit handlers. 
In addition, the rule was made available through the Internet by the 
Office of the Federal Register. That rule provided for a 60-day comment 
period which ended March 23, 1998. No comments were received.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this final rule.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that 
finalizing the interim final rule, without change, as published in the 
Federal Register (63 FR 3247, January 22, 1998) will tend to effectuate 
the declared policy of the Act.

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.

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

PART 944--FRUITS; IMPORT REGULATIONS

    Accordingly, the interim final rule amending 7 CFR parts 905 and 
944 which was published at 63 FR 3247 on January 22, 1998, is adopted 
as a final rule without change.

    Dated: April 14, 1998.
Sharon Bomer Lauritsen,
Acting Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-10259 Filed 4-17-98; 8:45 am]
BILLING CODE 3410-02-P