Federal Register, Volume 63 Issue 197 (Tuesday, October 13, 1998)

[Federal Register Volume 63, Number 197 (Tuesday, October 13, 1998)]
[Rules and Regulations]
[Pages 54556-54559]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-27518]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. FV98-966-2 IFR]


Tomatoes Grown in Florida; Partial Exemption From the Handling 
Regulation for Producer Field-Packed Tomatoes

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: This rule changes the handling requirements currently 
prescribed under the Florida tomato marketing order. The marketing 
order regulates the handling of tomatoes grown in Florida and is 
administered locally by the Florida Tomato Committee (committee). This 
rule exempts shipments of producer field-packed tomatoes from the 
container net weight requirements and the requirement that all tomatoes 
must be packed at registered handler facilities. This rule will allow 
the industry to pack a higher colored, riper tomato to meet the demand 
of the expanding market for vine-ripe tomatoes. This will facilitate 
the movement of Florida tomatoes and should improve returns to 
producers.

DATES: Effective October 10, 1998; comments received by December 14, 
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 to the Docket Clerk, Fruit 
and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456, 
Washington, DC 20090-6456; Fax: (202) 205-6632; or E-mail: 
[email protected]. All comments should reference the docket 
number and the date and page number of this issue of the Federal 
Register and will be made available for public inspection in the Office 
of the Docket Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Christian D. Nissen, Southeast 
Marketing Field Office, F&V, AMS, USDA, P.O. Box 2276, Winter Haven, 
Florida 33883-2276; telephone: (941) 299-4770, Fax: (941) 299-5169; or 
George Kelhart, Technical Advisor, Marketing Order Administration 
Branch, F&V, AMS, USDA, room 2522-S, P.O. Box 96456, Washington, DC 
20090-6456; telephone: (202) 690-3919, Fax: (202) 205-6632. Small 
businesses may request information on compliance with this regulation 
by contacting Jay Guerber, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, 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. 125 and Order No. 966 (7 CFR part 966), both as amended, 
regulating the handling of tomatoes 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 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.
    Under the order, tomatoes produced in the production area and 
shipped to fresh market channels outside the regulated area are 
required to meet grade, size, inspection, and container requirements. 
These requirements apply during the period October 10 through June 15 
each year. Current requirements include a minimum grade of U.S. No. 2 
and a minimum size of 2\9/32\ inches in diameter. Current pack and 
container requirements outline the types of information that needs to 
appear on a container, weight restrictions the packed containers must 
meet, and that the containers must be packed at a registered handler's 
facility.
    Section 966.52 of the Florida tomato marketing order provides 
authority for the modification, suspension, and termination of 
regulations. It includes the authority to establish and modify pack and 
container requirements for tomatoes grown in the defined production 
area and handled under the order.
    Section 966.323 specifies the handling regulations issued under the 
order. Section 966.323(a)(3)(i) requires that certain types of tomatoes 
packed by registered handlers be packed in containers of 10, 20, and 25 
pounds designated net weights. The net weight can not be less than the 
designated weight or exceed the designated weight by more than two 
pounds. Section 966.323(a)(3)(ii) currently requires that certain types 
of tomatoes be packed by registered handlers in containers that are 
marked with the designated net weight and with the name and address of 
the registered handler, and that such containers must be packed at the 
registered handler's facilities.
    This rule changes the handling regulations under the order. This 
rule defines producer field-packed tomatoes and will allow handlers to 
ship field-packed tomatoes exempt from the net weight requirements. 
This rule also exempts producer field-packed tomatoes from the 
requirement that all tomatoes be packed at a registered handler's 
facility. These tomatoes will still be subject to all other provisions 
of the handling regulation, including established grade, size, pack and 
inspection requirements. These tomatoes also would continue to be 
subject to assessments. The committee met September 11, 1998, and 
unanimously recommended this change.
    In its discussion of this rule, the committee recognized that the 
market for red, ripe tomatoes or vine-ripes is continuing to grow. 
Place packed vine-ripe tomatoes are shipped from many foreign and 
domestic growing areas, and currently maintain a strong and growing

[[Page 54557]]

market share. Committee members stated that the popularity of the red, 
ripe tomato is evident in the increasing popularity of greenhouse and 
hydroponic tomatoes. These tomatoes tend to be marketed at a red, 
mature stage. Customer studies have shown that consumers prefer 
tomatoes that are of high color, and that are mature and ready to eat. 
According to a committee study, retailers believe that the vine-ripe 
tomato is the tomato of the future. The committee stated that this is 
the fastest growing market segment.
    Currently, the majority of Florida tomatoes are shipped at the 
mature green stage. Vine-ripe tomatoes represent only about 12 percent 
of total fresh shipments (6,501,630 of 47,633,160 25-pound containers 
shipped during the 1997-98 season). In an effort to put the industry in 
a more advantageous position to take advantage of this growing market, 
and to improve returns to producers, the committee recommended changes 
to the order's rules and regulations. These changes were recommended to 
help facilitate the movement of more vine-ripe tomatoes from Florida. 
To accomplish this, the committee recommended changes to the 
regulations to define a producer field-packed tomato and provide 
exemptions for such tomatoes to facilitate their movement. Producer 
field-packed tomatoes are defined as tomatoes which at the time of 
inspection are No. 3 color or higher (according to color classification 
requirements in the U.S. tomato standards), that are picked and place 
packed in new containers in the field by a producer as defined in 
Sec. 966.150 of the rules and regulations. The tomatoes are then 
transferred to the registered handler's facilities for final 
preparation for market and for inspection.
    Most tomatoes from Florida are packed and shipped at the mature 
green stage. Shipments of mature green tomatoes represented 
approximately 88 percent of total fresh shipments during the 1997-98 
season. Tomatoes are picked and packed at the mature green stage to 
facilitate handling. The vast majority of mature green tomatoes are 
packed using a mechanized process. The tomatoes are brought to the 
packing house where they are washed, run across sizing equipment, and 
then are packed in volume fill containers. At the mature green stage, 
the tomatoes are firm and are able to handle the packing process. This 
is an efficient process that facilitates packing in volume.
    However, when trying to pack a tomato that is more ripe and mature, 
the process used to pack mature greens is not as effective. This is 
because as the tomato begins to ripen it begins to soften. Tomatoes of 
No. 3 color and above cannot handle the rigors of the mechanized 
handling process. This packing process bruises and damages more mature 
tomatoes, increasing the volume of culls and those that fail inspection 
for grade.
    To provide a better way to handle mature tomatoes, and to provide 
for a greater volume of such tomatoes from Florida, the committee 
recommended developing a producer field-packed tomato. To facilitate 
the handling of this tomato the committee recommended that it be exempt 
from two parts of the handling regulations. This rule exempts producer 
field-packed tomatoes from the requirement that tomatoes be packed at a 
registered handler's facility, and the designated net weight 
requirements.
    Section 966.323 (a)(3)(ii) specifies in part that all tomatoes are 
to be packed at a registered handler's facilities. This rule exempts 
producer field-packed tomatoes from this requirement. By providing this 
exemption, the number of times the tomato is handled is reduced. Mature 
green tomatoes can withstand the multiple handling involved in its 
process, a more mature tomato cannot. Under this exemption, the 
producer field-packed tomato would only be handled once, when it was 
picked and packed in the field. It will not be subjected to the rigors 
of a mechanical process. Under this process, the tomatoes will be 
sized, cleaned, and packed by hand. This process of picking and packing 
in the field will make it substantially easier to pack a tomato of 
higher color and maturity. As per the requirement for all packed 
tomatoes for shipment outside the regulated area, new boxes must be 
used. The tomatoes are delivered to a registered handler for final 
preparation for market. The tomatoes will be inspected for grade, size, 
and proper pack after delivery to the registered handler.
    This rule also exempts producer field-packed tomatoes from the net 
weight requirements specified in the rules and regulations. Section 
966.323(a)(3)(i) currently requires that certain types of tomatoes 
packed by registered handlers be packed in containers of 10, 20, and 25 
pounds designated net weights. The net weight can not be less than the 
designated weight or exceed the designated weight by more than two 
pounds.
    By definition, producer field-packed tomatoes will be place packed 
in the field. Place packing a container requires a fixed number of 
tomatoes to fill the container. In place packing, the tomatoes are 
packed in layers, with the fill determined by the size of the tomato, 
dimensions of the container, and the way the tomatoes are positioned in 
the box. To facilitate this type of pack, most handlers use plastic 
cells, cardboard partitions, or trays to position the tomatoes. The 
majority of place packed tomatoes are sold by count per container 
rather than by weight.
    Most tomatoes shipped in Florida are shipped at the mature green 
stage, and are packed in volume fill containers. When volume fill 
containers are packed, the tomatoes are placed by hand or machine into 
the container until the required net weight is reached. Mature green 
tomatoes are not as susceptible to bruising and other damage during 
packing and transport as are producer field-packed tomatoes. If volume 
fill was used to pack producer field-packed tomatoes, serious product 
bruising would result which would detract from the appearance and 
marketability of these tomatoes.
    However, place packing does not lend itself well to meeting a 
required net weight. The tomatoes have to be properly sized and placed 
to fit snugly in the container. During the harvesting season, the 
weight of equal size tomatoes may vary dramatically. When tomatoes are 
place packed, the handler cannot add extra tomatoes when the container 
weight is light. Because the tomatoes are packed in layers, when a 
layer is complete there are no spaces for additional tomatoes. 
Similarly, when the tomatoes are heavy, the handler cannot remove a 
tomato to meet a weight requirement. Buyers expect a full pack with no 
spaces, and a missing tomato could result in a loose pack which could 
allow shifting or bruising during transport and would be a marketing 
problem. To overcome this problem, the committee recommended that 
shipments of producer field-packed tomatoes as defined herein, be 
exempt from the container net weight requirements of the rules and 
regulations.
    The committee is focusing on ways to continue to be competitive, 
develop new markets, and increase grower returns. The committee 
believes this change will provide the industry with more flexibility 
and additional marketing opportunities.
    The committee believes that producer field-packed tomatoes will 
increase the volume of vine-ripe tomatoes available from Florida. This 
has been a market that has been expanding and not traditionally served 
by much volume from the Florida tomato industry. The committee also 
believes that this change will allow producers to harvest tomatoes that 
might otherwise have been left in the field. There is also an

[[Page 54558]]

indication that handlers will be willing to pay a higher price for 
producer field-packed tomatoes. The committee believes that the higher 
prices combined with additional tomato sales should increase returns to 
producers.
    There are other changes made by this rule. Currently, yellow meated 
tomatoes, specialty packed red ripe tomatoes, single layer and two 
layer place packed tomatoes, and now producer field-packed tomatoes as 
well, are exempt from the container net weight requirement in 
Sec. 966.323(a)(3)(i). In its discussion, the committee said that 
Sec. 966.323(a)(3)(ii) states that each container or lid shall be 
marked to indicate the designated net weight. They said that in the 
past, there had been some confusion as to how this applies to those 
tomatoes exempt from net weight. The committee voted unanimously to 
exempt those tomatoes exempt from net weight from the requirement that 
net weight appear on the container or lid to rectify this problem. This 
rule makes this change. Finally, the first sentence of 
Sec. 966.323(d)(1) is changed to delete unnecessary language.
    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 tomatoes, imports of that commodity 
must meet the same or comparable requirements. However, the Act does 
not authorize the imposition of container requirements on imports, when 
such requirements are in effect under a domestic marketing order. 
Therefore, no change is necessary in the tomato import regulations as a 
result of this action.
    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 the 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 65 handlers of Florida tomatoes who are 
subject to regulation under the order and approximately 75 tomato 
producers in the regulated area. Small agricultural service firms, 
which includes handlers, have been defined by the Small Business 
Administration (SBA) as those having annual receipts of less than 
$5,000,000, and small agricultural producers are defined as those 
having annual receipts of less than $500,000 (13 CFR 121.601).
    Based on the industry and committee data for the 1997-98 season, 
the average annual f.o.b. price for fresh Florida tomatoes during the 
1997-98 season was around $9.11 per 25 pound equivalent, and total 
fresh shipments for the 1997-98 season are estimated at 47.6 million 25 
pound equivalent cartons of tomatoes. Committee data indicates that 
approximately 20 percent of the Florida handlers handle 80 percent of 
the total volume shipped outside the regulated area. Based on this 
information, the shipment information for the 1997-98 season, and the 
1997-98 season average price, the majority of handlers would be 
classified as small entities as defined by the SBA. The majority of 
producers of Florida tomatoes also may be classified as small entities.
    Under Sec. 966.52 of the Florida tomato marketing order, the 
committee, among other things, has authority to establish and modify 
pack and container requirements for tomatoes grown in the defined 
production area and handled under the order. This rule defines a 
producer field-packed tomato and provides exemptions for such tomato 
from the net weight requirements and the requirements that tomatoes be 
packed at a registered handler's facilities. This rule will allow for 
the place packing of ripe tomatoes in the field. Vine ripe tomatoes 
represent only about 12 percent of total fresh shipments (6,501,630 of 
47,633,160 25-pound containers shipped during the 1997-98 season).
    The committee recommended this change to improve the marketing of 
Florida tomatoes and follow the trend of increased demand for red, 
mature tomatoes. This trend is in response to a strong consumer demand 
for such tomatoes. This rule will allow the industry to pack a higher 
colored, riper tomato to meet the demand of the expanding market for 
these vine-ripe tomatoes. This will facilitate the movement of Florida 
tomatoes and should improve returns to producers.
    Producer field-packed tomatoes are defined as tomatoes which at the 
time of inspection are No. 3 color or higher (according to color 
classification requirements in the U.S. tomato standards), that are 
picked and place packed in new containers in the field by a producer as 
defined in Sec. 966.150 of the rules and regulations. The tomatoes are 
then transferred to the registered handler's facilities for final 
preparation for market and for inspection.
    This rule will have a positive impact on affected entities. The 
changes were recommended to provide additional flexibility in the 
packing of tomatoes of higher color and maturity.
    Providing an exemption for producer field-packed tomatoes from the 
requirement that tomatoes be packed at a registered handler's 
facilities, reduces the number of times the tomato is handled. It also 
facilitates the packing of producer field-packed tomatoes free from the 
mechanized process of grading and sizing used for mature green 
tomatoes. Tomatoes of No. 3 color and above cannot handle the rigors of 
the mechanized handling process. This packing process bruises and 
damages more mature tomatoes, increasing the volume of culls and those 
that fail inspection for grade. By providing this exemption, the 
producer field-packed tomato would only be handled once, when it was 
picked and packed in the field. This will make it substantially easier 
to pack a tomato of higher color and maturity.
    The exemption from the net weight requirements will allow the 
producer field-packed tomatoes to be place packed. It is very difficult 
to pack to a specified weight when place packing containers. Place 
packing a container requires a fixed number of tomatoes to fill the 
container. In place packing, the tomatoes are packed in layers, with 
the fill determined by the size of the tomato, dimensions of the 
container, and the way the tomatoes are positioned in the box. The 
majority of place packed tomatoes are sold by count per container 
rather than by weight. However, the place pack method of packaging does 
not lend itself well when packing to meet a required net weight.
    During the harvesting season, the weight of equal size tomatoes may 
vary dramatically. If the producer field-packed tomatoes are light in 
weight, handlers cannot add extra tomatoes to meet net weight because 
the pack is full, or if the tomatoes are heavier than normal, removing 
a tomato to meet net weight would mean leaving an empty space. Buyers 
expect a full pack with no spaces, and a missing tomato could result in 
a loose pack which could allow shifting or bruising during transport 
and would be a marketing problem. To overcome this problem, the 
committee recommended that shipments of producer field-packed tomatoes 
as defined herein, be exempt from the container net weight requirements 
of the rules and regulations.
    In an effort to put the industry in a more advantageous position to 
take

[[Page 54559]]

advantage of this growing market, and to improve returns to producers, 
the committee recommended these changes. According to committee funded 
research, retailers consider vine-ripe tomatoes to be the tomato type 
of the future. This has been a market that has been expanding and it is 
a market where the Florida tomato industry has room to grow and expand 
its market share. The committee believes that producer field-packed 
tomato will increase the volume of vine-ripe tomatoes available from 
Florida. The committee also believes that it will allow producers to 
harvest tomatoes that might otherwise have been left in the field. 
There is also an indication that handlers will be willing to pay a 
higher price for producer field-packed tomatoes. The committee believes 
that the higher prices combined with additional tomato sales should 
increase returns to producers.
    There are some additional costs associated with packing in the 
field. Picking, grading, and sizing by hand is more time consuming and 
costly than by machine. However, there are indications that producer 
field-packed tomatoes will command a higher price. Also, the regulated 
industry is not required to use this exemption. Therefore, the 
additional costs are voluntary.
    These changes are intended to provide additional flexibility for 
all those covered under the order. The opportunities and benefits of 
this rule are expected to be equally available to all tomato handlers 
and growers regardless of their size of operation. This action will 
have a beneficial impact on producers and handlers since it will allow 
tomato handlers to make additional supplies of tomatoes available to 
meet consumer needs consistent with crop and market conditions.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large tomato handlers. As with all 
Federal marketing order programs, reports and forms are periodically 
reviewed to reduce information 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.
    Further, the committee's meeting was widely publicized throughout 
the tomato industry and all interested persons were invited to attend 
the meeting and participate in committee deliberations. Like all 
committee meetings, the September 11, 1998, 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.
    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.
    This rule invites comments on a change to the handling requirements 
currently prescribed under the Florida tomato marketing order. Any 
comments received will be considered prior to finalization of this 
rule.
    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 rule until 30 days after publication in the Federal Register 
because: (1) This change is a relaxation of current requirements; (2) 
the Florida tomato season begins October 10; (3) the committee 
unanimously recommended these changes at a public meeting and 
interested parties had an opportunity to provide input; and (4) this 
rule provides a 60-day comment period and any comments received will be 
considered prior to finalization of this rule.

List of Subjects in 7 CFR Part 966

    Marketing agreements, Reporting and recordkeeping requirements, 
Tomatoes.

    For the reasons set forth in the preamble, 7 CFR part 966 is 
amended as follows:

PART 966--TOMATOES GROWN IN FLORIDA

    1. The authority citation for 7 CFR part 966 continues to read as 
follows:

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

    2. Section 966.323 is amended by revising paragraph (d)(1) and the 
first sentence in paragraph (g) to read as follows:


Sec. 966.323  Handling regulations

* * * * *
    (d) Exemption. (1) For types. The following types of tomatoes are 
exempt from these regulations: Elongated types commonly referred to as 
pear shaped or paste tomatoes and including but not limited to San 
Marzano, Red Top, and Roma varieties; cerasiform type tomatoes commonly 
referred to as cherry tomatoes; hydroponic tomatoes; and greenhouse 
tomatoes. Specialty packed red ripe tomatoes, yellow meated tomatoes, 
and single layer and two layer place packed tomatoes are exempt from 
the container net weight requirements specified in paragraph (a)(3)(i) 
of this section, and the requirement that each container or lid shall 
be marked to indicate the designated net weight as specified in 
paragraph (a)(3)(ii) of this section, but must meet the other 
requirements of this section. Producer field-packed tomatoes are also 
exempt from the container net weight requirements specified in 
paragraph (a)(3)(i) of this section, the requirement that each 
container or lid shall be marked to indicate the designated net weight 
as specified in paragraph (a)(3)(ii) of this section, and the 
requirement that all containers must be packed at the registered 
handler's facilities as specified in paragraph (a)(3)(ii) of this 
section, but must meet the other requirements of this section.
* * * * *
    (g) Definitions. Hydroponic tomatoes means tomatoes grown in 
solution without soil; greenhouse tomatoes means tomatoes grown 
indoors; specialty packed red ripe tomatoes means tomatoes which at the 
time of inspection are 5 or 6 
color (according to color classification requirements in the U.S. 
tomato standards) with their calyx ends and stems attached and cell 
packed in a single layer container; and producer field-packed tomatoes 
means tomatoes which at the time of inspection are 
3 color or higher (according to color 
classification requirements in the U.S. tomato standards), that are 
picked and place packed in new containers in the field by a producer as 
defined in Sec. 966.150 and transferred to a registered handler's 
facilities for final preparation for market. * * *

    Dated: October 8, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-27518 Filed 10-9-98; 8:45 am]
BILLING CODE 3410-02-P