[Federal Register Volume 66, Number 151 (Monday, August 6, 2001)]
[Proposed Rules]
[Pages 40923-40926]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19594]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 66, No. 151 / Monday, August 6, 2001 / 
Proposed Rules  

[[Page 40923]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 911 and 944

[Docket No. FV01-911-2 PR]


Limes Grown in Florida and Imported Limes; Suspension of 
Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule; suspension.

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SUMMARY: This rule would suspend regulations for one year for limes 
grown in Florida and for limes imported into the United States that are 
shipped to the fresh market. This rule would suspend grade, size, 
quality, maturity, pack, inspection, assessment collection, reporting, 
and other requirements currently prescribed under the Florida lime 
marketing order (order). The order is administered locally by the 
Florida Lime Administrative Committee (Committee). This suspension 
would give the industry time to evaluate citrus canker eradication 
efforts and the market effects of suspending regulations for one year. 
This change would reduce costs and help the industry recover from the 
effects of citrus canker. The suspension of the grade, size, quality, 
maturity, and inspection requirements specified in the import 
regulation is required under section 8e of the Agricultural Marketing 
Agreement Act of 1937.

DATES: Comments must be received by September 5, 2001.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, room 2525-S, P.O. Box 96456, Washington, DC 20090-6456; Fax: 
(202) 720-8938, 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 available for public 
inspection in the office of the Docket Clerk during regular business 
hours, or can be viewed at: http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Marketing Specialist, 
Southeast Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 2276, Winter 
Haven, Florida 33883; telephone: (863) 299-4770, Fax: (863) 299-5169; 
or George Kelhart, Technical Advisor, 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) 
720-8938.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 
2525-S, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: 
(202) 720-8938, or E-mail: [email protected].

SUPPLEMENTARY INFORMATION: This proposed rule is issued under Marketing 
Agreement No. 126 and Order No. 911, both as amended (7 CFR part 911), 
regulating the handling of limes 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 proposed rule is also issued under section 8e of the Act, 
which provides that whenever certain specified commodities, including 
limes, 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 proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This action is not intended to have retroactive 
effect. This proposed rule would 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.
    This rule invites comments on a suspension of regulations currently 
prescribed under the Florida lime marketing order. This rule would 
suspend grade, size, quality, pack, inspection, assessment collection, 
and other requirements for one year. This suspension would give the 
industry time to evaluate citrus canker eradication efforts and assess 
the market effects of no regulation on the industry after the one-year 
suspension. This change would also reduce costs and help the industry 
recover from the effects of citrus canker.
    Section 911.48 of the order authorizes the issuance of regulations 
for grade, size, quality, and pack for limes grown in the production 
area. Section 911.49 authorizes the modification, suspension, or 
termination of regulations issued under Sec. 911.48. Section 911.51 
provides that whenever limes are regulated pursuant to Sec. 911.48, 
such limes must be inspected by the Federal-State Inspection Service, 
and certified as meeting the applicable requirements of such 
regulations. The cost of inspection and certification is borne by 
handlers.
    Under the order, fresh market shipments of Florida limes are 
required

[[Page 40924]]

to be inspected and are subject to grade, size, quality, pack, and 
container requirements. Section 911.344 Grade and Size Requirements [7 
CFR part 911.344] states that no handler shall handle any variety of 
limes grown in the production area unless such limes of the group known 
as seeded or true limes meet the requirements specified for U.S. No. 2 
grade, except as to color. Further, if such limes do not meet these 
requirements, they may be handled within the production area if they 
meet the minimum juice content requirement of it least 42 percent by 
volume and if handled in containers other than those specified in 
Sec. 911.329. Such limes of the group known as seedless, large-fruited, 
or Persian limes must meet the requirements of Secs. 911.311 and 
911.329 and grade at least a U.S. Combination, Mix Color. They also 
must be at least two inches in diameter from January 1 through May 31, 
and at least 1\7/8\ inches in diameter from June 1 through December 31. 
Further, they must contain not less than 42 percent juice content by 
volume. Section 911.344 also includes some container specifications and 
inspection requirements.
    The order's pack and container requirements are specified in 
Secs. 911.311 and 911.329. These sections state, in part, that limes 
must be packed in containers of 5.5, 8, 10, 20, and 38 pounds 
designated net weight. Each container of limes in each lot must be 
marked or stamped on the outside end in letters at least \1/4\ inch in 
height to show the United States grade and either the average juice 
content of the limes or the phrase ``average juice content forty-two 
percent (42%) or more.'' The containers must also be marked with a 
Federal-State Inspection Service lot stamp number showing that the 
limes have been inspected and with a stamp indicating size. Related 
provisions appear in the regulations at Sec. 911.110 Exemption 
certificates; Sec. 911.120 Handler registration; Sec. 911.130 Limes not 
subject to regulation; and Sec. 911.131 Limes for processing.
    At its April 18, 2001, meeting, in a vote of six in favor and one 
opposed the Committee recommended suspending the grade, size, quality, 
pack, inspection, assessment collection, and other requirements for one 
year. The Committee met again on May 16, 2001, to review the 
recommendation made at the earlier meeting and to clarify its original 
motion. The Committee requested that this rule be in place for one year 
beginning with the effective date of this rule.
    The objective of the handling and inspection requirements is to 
ensure that only limes of acceptable quality enter fresh market 
channels, thereby ensuring consumer satisfaction, increasing sales, and 
improving returns to producers. While the industry continues to believe 
that quality is an important factor in maintaining sales, the Committee 
believes the costs associated with the order may exceed the benefits 
derived at this time, especially in view of the reduction in production 
due to citrus canker.
    The Committee is concerned, however, that the elimination of 
current requirements could possibly result in lower quality limes being 
shipped to fresh markets and that markets will be hurt by poor quality. 
For this reason, the Committee recommended that the suspension of 
requirements be effective for one-year only. This would enable the 
Committee to study the impacts of canker and the suspension and 
consider appropriate actions for ensuing seasons.
    This rule would enable handlers to ship limes without regard to the 
minimum grade, size, quality, pack, and inspection requirements for one 
year. This would allow handlers to decrease costs by eliminating the 
costs associated with inspection and assessments. This rule does not 
restrict handlers from seeking inspection on a voluntary basis.
    This rule would suspend Secs. 911.110, 911.120, 911.130, 911.131, 
911.311, 911.329, and 911.344 of the rules and regulations in effect 
under the order. Section 911.110 provides for hardship exemptions from 
inspection. Section 911.120 provides for the registration of handlers, 
Sec. 911.130 specifies minimum quantity and gift exemptions, and 
defines commercial processing. Section 911.131 provides requirements 
for limes for processing.
    This rule would also suspend Sec. 911.234 requiring that an 
assessment rate of $0.16 per 55 pound bushel equivalent of limes be 
collected from Florida lime handlers. Authorization to assess lime 
handlers enables the Committee to incur expenses that are necessary to 
administer the marketing order. With the suspension of handling, 
inspection, and assessment requirements, a limited Committee budget 
would be needed for program administration. For the period of the 
suspension, the Committee would meet and recommend a reduced budget. 
The Committee would have about $26,000 in operating reserves to cover 
approved Committee expenses.
    In 1995, citrus canker was detected near the Miami International 
Airport. Citrus canker spread throughout South Florida and by March 
2000, almost 1,500 acres of lime groves had tested positive for citrus 
canker. Prior to the outbreak of citrus canker, there were 
approximately 3,200 acres of commercial lime groves in Dade County. 
Estimates now place the Florida lime industry at somewhere between 600 
and 1,000 acres of production. During the 1999-2000 season fresh lime 
production was 774,111 bushels. This past season, production fell to 
344,032 bushels. Production in 2000-2001 is estimated to be 300,000 
bushels.
    Citrus canker is a highly infectious disease that attacks citrus 
trees. Canker attacks the tree and the fruit and may produce a variety 
of effects, including defoliation, severely blemished fruit, reduced 
fruit quality, and premature fruit drop. The only known method of 
eradicating citrus canker is to bulldoze and burn infected and exposed 
trees. Trees surrounding infected trees must also be bulldozed and 
burned. At the beginning of the eradication program, trees within a 125 
feet radius of an infected tree were destroyed. However, after research 
was conducted, it was determined that all trees within a 1,900 feet 
radius had to be destroyed. The removal of these additional trees has 
quickened the reduction of lime acreage in South Florida.
    Many lime growers have lost all of their production to canker. By 
regulation, until citrus canker is eradicated, lime growers are not 
permitted to replant. The production area is also under a quarantine 
that makes it difficult to sell harvested fruit. Lost income from 
reduced volume and the cost of maintaining groves with reduced monetary 
returns have hurt the industry. Because of this and the substantially 
reduced crop, the Committee believes that regulation should be 
suspended.
    By suspending regulation, the industry would have an opportunity to 
evaluate how the citrus canker eradication efforts are progressing. The 
industry would also have an opportunity to assess the market impact of 
having no regulation. Also, under a suspension, inspection fees and 
program assessment costs would be eliminated. This would be a savings 
for both growers and handlers. The savings would help offset some of 
effects of citrus canker.
    The Committee member who opposed the recommendation believes that 
there are enough limes remaining to warrant regulation. Without 
regulation, the member believes that poor quality lime shipments would 
negatively impact better quality shipments. He also stated that he 
believes imported limes will flood the market and destroy the market 
for domestically produced limes. As mentioned earlier, the Committee 
has similar concerns, but believes that a

[[Page 40925]]

one-year suspension of regulations is necessary to help reduce costs 
for those producers and packers who still have limes to market. The 
suspension would provide time to assess canker eradication efforts, 
evaluate the effects on the market of having no regulations for one 
year, and offer the industry some needed cost relief from assessments 
and inspection fees. For these reasons, the Committee voted to 
recommend that grade, size, quality, maturity, pack, inspection, 
assessment collection, and other requirements be suspended for one 
year.
    Suspension of all of the specified requirements is expected to 
reduce the reporting burden on small or large Florida lime handlers by 
about 22 hours, and should further reduce industry expenses. During the 
suspension period, handlers would not have to file the following forms 
with the Committee: Application for Registered Handler (16.5 burden 
hours; Application for Registered Processor (10 minutes; Application 
for Lime Grade Label (5.5 burden hours).
    Section 8e of the Act provides that when certain domestically 
produced commodities, including limes, 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 would suspend regulations for domestically produced limes, a 
corresponding change to the import regulations must also be provided.
    Minimum grade, size, maturity, and quality requirements for limes 
imported into the United States are currently in effect under 
Sec. 944.209 (7 CFR 944.209). This proposal would suspend Sec. 944.209 
requiring that limes imported into the United States be inspected for 
grade, size, maturity, and quality. As this rule would suspend import 
requirements for one year, it could also result in reduced costs for 
importers.
    Mexico is the largest exporter of limes to the United States. In 
calendar year 2000, Mexico exported approximately 9,630,909 bushels of 
limes to the United States, while all other import sources shipped a 
combined total of approximately 98,182 bushels during the same time 
period. Other sources of lime imports to the United States include 
Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, 
Honduras, and Venezuela. Mexico's highest volume occurs in the months 
of June through September.

Initial Regulatory Flexibility Analysis

    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.
    There are approximately 52 producers of limes in production area 
and approximately 10 handlers subject to regulation under the marketing 
order. Small agricultural service firms are defined by the Small 
Business Administration (13 CFR 121.201) 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.
    The average f.o.b. price for fresh limes during the 2000-01 season 
was around $14.75 per bushel and total shipments were 344,032 bushels 
for the season. Using this price and total volume for the season, all 
lime handlers could be considered small businesses under the SBA 
definition, excluding receipts from other sources. The majority of 
Florida lime producers and handlers may be classified as small 
entities.
    This proposal would suspend grade, size, quality, pack, inspection, 
assessment collection, and other requirements as specified in 
Secs. 911.110, 911.120, 911.130, 911.131, 911.234, 911.311, 911.329, 
and 911.344. Section 944.209 of the import regulations, specifying the 
requirements for limes imported into the United States, would also be 
suspended in its entirety. The suspensions would be in effect for one 
year.
    Citrus canker has reduced Florida lime production from 3,200 acres 
to between 600 and 1,000 acres. The only known method to eradicate 
citrus canker is to bulldoze and burn infected trees and exposed trees. 
This suspension would give the industry time to evaluate citrus canker 
eradication efforts and assess the effects on the market of having no 
regulations for one year. This change would also reduce costs and help 
the industry recover from the effects of citrus canker.
    At the April and May meetings, the Committee discussed the impact 
of this change on handlers and producers in terms of cost. This rule 
would enable handlers to ship limes without regard to the minimum 
grade, size, quality, maturity, pack, and inspection requirements. It 
would decrease handler costs associated with inspection. This action 
would also eliminate the cost of assessments. Currently, handlers are 
required to pay an inspection fee of $0.14 per bushel and an assessment 
rate of $0.16 per bushel handled. Eliminating these costs would result 
in a savings for growers and handlers. Importers would also benefit 
from the reduction in inspection costs. These savings would help offset 
the loss of income from canker, as well as assist in the costs of 
replanting, when replanting is again authorized. The benefits of this 
rule are expected to be available to lime handlers, growers, and 
importers, regardless of their size of operation.
    The Committee discussed alternatives to this change, including not 
suspending regulations at all, as well as terminating the order. 
Terminating the order was deemed too drastic an action at this time. 
However, most of the Committee members believe that suspension is 
necessary because of the substantially reduced crop and to reduce 
inspection and assessment costs. Citrus canker has had a negative 
economic impact on the lime industry and cost savings would be 
beneficial. Suspending regulations also would provide the Committee 
time to evaluate the effects of canker and to consider what actions 
should be taken in the future. The Committee acknowledged that quality 
problems might occur in the absence of regulation, but believed that 
suspension was the best course of action at this time given the 
industry situation. Therefore, the alternatives of termination and 
continuing without change were rejected.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection requirements being suspended by 
this rule were approved previously by the Office of Management and 
Budget (OMB) and assigned OMB No. 0581-0189. Suspension of all of the 
specified requirements is expected to reduce the reporting burden on 
small or large Florida lime handlers by 22 hours, and should further 
reduce industry expenses. During the suspension period, handlers would 
not have to file the following forms with the Committee: Application 
for Registered Handler (16.5 burden hours; Application for Registered 
Processor (10 minutes); Application for Lime Grade Label (5.5 burden 
hours). As with all Federal marketing order programs, reports and forms 
are periodically reviewed to reduce information requirements and

[[Page 40926]]

duplication by industry and public sectors.
    Pursuant to section 8e of the Act, this action would also suspend 
the lime import regulation (7 CFR 944.209). That regulation currently 
specifies grade, size, quality, maturity, inspection, and other 
requirements.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap or conflict with this proposed rule.
    The Committee's meetings were widely publicized throughout the lime 
industry and all interested persons were invited to attend the meetings 
and participate in Committee deliberations on all issues. Like all 
Committee meetings, the April 18, 2001, and the May 16, 2001, meetings 
were public meetings and all entities, both large and small, were able 
to express views on this issue. Interested persons are invited to 
submit information on the regulatory and informational impacts of this 
action on small businesses.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html. Any questions about the compliance 
guide should be sent to Jay Guerber at the previously mentioned address 
in the FOR FURTHER INFORMATION CONTACT section.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this proposed rule.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposal. Thirty days is deemed appropriate because 
this rule would need to be in place as soon as possible since handlers 
are already shipping limes from the 2001-2002 crop. This rule needs to 
be in effect as soon as possible to provide relief to the Florida lime 
industry. Also, the industry has been discussing this issue for some 
time, and the Committee has kept the industry well informed. It has 
also been widely discussed at various industry and Committee meetings. 
Interested persons have had time to determine and express their 
positions. All written comments timely received will be considered 
before a final determination is made on this matter.

List of Subjects

7 CFR Part 911

    Limes, Marketing agreements, Reporting and recordkeeping 
requirements.

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 911 and 944 are 
proposed to be amended as follows:

PART 911--LIMES GROWN IN FLORIDA

    1. The authority citation for 7 CFR parts 911 and 944 continues to 
read as follows:

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

    2. In Part 911, Secs. 911.110, 911.120, 911.130, 911.131, 911.234, 
911.311, 911.329, and 911.344 are suspended in their entirety effective 
[Insert date one day after final rule is published in the Federal 
Register], through [Insert date 365 days after final rule is published 
in the Federal Register].

PART 944--FRUITS; IMPORT REGULATIONS

    3. In Part 944, Sec. 944.209 is suspended in its entirety effective 
[Insert date one day after final rule is published in the Federal 
Register], through [Insert date 365 days after final rule is published 
in the Federal Register].

    Dated: August 1, 2001.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 01-19594 Filed 8-3-01; 8:45 am]
BILLING CODE 3410-02-P