[Federal Register Volume 66, Number 184 (Friday, September 21, 2001)]
[Rules and Regulations]
[Pages 48529-48532]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-23648]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. FV01-966-1 FR]


Tomatoes Grown in Florida; Changes to the Handling Regulation for 
Producer Field-Packed Tomatoes

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule changes the requirements currently prescribed for 
producer field-packed tomatoes under the Florida tomato marketing order 
(order). The order regulates the handling of tomatoes grown in Florida, 
and is administered locally by the Florida Tomato Committee 
(Committee). This rule removes the net weight and weight labeling 
exemptions for producer field-packed tomatoes. Producer field-packed 
tomatoes compete directly with packinghouse tomatoes that must meet the 
net weight requirement. This change requires all tomatoes, regardless 
of where they are packed, to meet the same net weight requirements so 
that these requirements are the same for producer field-packed tomatoes 
and packinghouse tomatoes.

EFFECTIVE DATE: This final rule becomes effective September 24, 2001.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Southeast Marketing 
Field Office, Marketing Order Administration Branch, Fruit and

[[Page 48530]]

Vegetable Programs, AMS, USDA, PO 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, PO 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, PO 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 final rule is issued under Marketing 
Agreement No. 125 and Order No. 966, both as amended (7 CFR part 966), 
regulating the handling of tomatoes 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.''
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have retroactive 
effect. This 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.
    This final rule removes the net weight exemption currently 
prescribed for producer field-packed tomatoes under the Florida tomato 
marketing order. The Committee recommended this change at its meeting 
on February 27, 2001, with a vote of eight in favor and two opposed.
    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 need to 
appear on a container, weight restrictions, and where the containers 
must be packed.
    Section 966.52 of the Florida tomato marketing order provides 
authority for the issuance of regulations. This includes 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 contains the handling regulations issued under the 
order. Section 966.323(a)(3)(i) requires that tomatoes packed by 
registered handlers be packed in containers of 10, 20, and 25 pounds 
designated net weights. The net weight of a container's contents cannot 
be less than the designated net weight or exceed the designated net 
weight by more than two pounds. Section 966.323(a)(3)(ii) requires that 
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.
    Section 966.323(d)(1) contains exemptions to the regulations. The 
section currently exempts producer field-packed tomatoes from the 
container net weight requirements and the requirement that each 
container or lid be marked to indicate the designated net weight. It 
also exempts producer field-packed tomatoes from the requirement that 
all containers must be packed at a registered handler's facilities. 
However, field-packed tomatoes still must meet the other requirements 
of the marketing order, including established grade, size, container, 
pack, and inspection requirements.
    This rule removes the net weight and weight labeling exemptions for 
producer field-packed tomatoes. This change requires all tomatoes, 
unless specifically granted an exemption, to meet the same net weight 
requirements regardless of where they are packed.
    Producer field-packed tomatoes are 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 
transported to a registered handler's facilities for final preparation 
for market and for inspection.
    Producer field-packed tomatoes are picked by hand and place packed 
in containers in layers. When place packing a container of tomatoes, 
the fill is determined by the size of the tomato, dimensions of the 
container, and the way the tomatoes are positioned in the box. Each 
layer is tightly packed by rotating the tomatoes and by the size 
selection of the tomatoes. Each 25-pound container usually has three to 
four layers of tomatoes.
    Most tomatoes from Florida are packed and shipped at the mature 
green stage. Shipments of mature green tomatoes represented 
approximately 83.7 percent of total fresh shipments during the 1999-
2000 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 
packinghouse where they are run across sizing equipment, and then are 
packed in volume fill containers by size and weight. At the mature 
green stage, the tomatoes are firm and are able to withstand the 
packing process. This is an efficient process that facilitates packing 
in volume.
    However, when packing a producer field-packed 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 tolerate the rigors of 
the mechanized handling process. This packing process bruises and 
damages more mature tomatoes, increasing the volume of culls and 
tomatoes that fail inspection.
    When the net weight exemption for producer field-packed tomatoes 
was established October 10, 1998 (63 FR 54556), the Committee thought 
that meeting the net weight requirement would be difficult without the 
precision of the mechanical process available at the packinghouse. 
Therefore, the Committee recommended establishing the net weight 
exemption to facilitate

[[Page 48531]]

the packing of field-packed tomatoes. However, after several years of 
experience, those packing producer field-packed tomatoes have enhanced 
their skill for packing tomatoes in the field. Many now pack to meet 
the net weight requirement even though the exemption is available.
    Field-packed tomatoes are sized as either 5X6 or 6X6 and larger 
with no upper limit on either size. This differs from the size 
requirements for tomatoes packed at a packinghouse. Packinghouse 
tomatoes must meet a minimum and a maximum size requirement on tomatoes 
designated at 6X6. Because there is no upper limit on either the 5X6 or 
6X6 sized field-packed tomatoes, handlers have more flexibility to add 
and remove tomatoes of different sizes in order to meet a specified 
weight requirement without compromising their ability to meet the size 
requirement. Handlers can replace larger tomatoes with smaller ones and 
vice versa in order to adjust box weight to meet the net weight 
requirements. In its discussion, the Committee stated that most 
handlers of producer field-packed tomatoes are voluntarily meeting the 
25-pound net weight requirements.
    It also found that some handlers have started using the net weight 
exemption as a marketing tool. The Committee stated that producer 
field-packed tomatoes packed in containers designed to hold a 25-pound 
designated net weight were being presented for sale with weights of 28 
to 32 pounds. The net weight requirement only allows packinghouses to 
put between 25 and 27 pounds of tomatoes to a box. Some handlers of 
producer field-packed tomatoes are adding additional tomatoes to the 
containers to create a marketing advantage over those handlers required 
to meet the net weight requirements. Buyers prefer the additional 
weight in containers of field-packed tomatoes to packinghouse tomatoes 
because they are getting more tomatoes for their money.
    In its discussions, Committee members stated that over packing 
containers is a poor marketing practice. Selling a container of 
tomatoes that weighs more than 25 pounds at the price for a 25-pound 
container has a price depressing effect on the market, and reduces 
returns to growers. It was also noted that the marketing order was put 
in place to create an orderly market for all tomatoes grown in Florida 
because the market at that time was in such disarray. The net weight 
was established to provide an industry standard and give buyers and 
sellers a uniform point of comparison. With the volume of producer 
field-packed tomatoes increasing, several Committee members stated that 
continuing with the net weight exemption for field-packed tomatoes was 
taking a step backwards in terms of orderly marketing.
    In addition, there was also concern regarding the possibility that 
damaged tomatoes could reach the market. Committee members stated that 
when a 25-pound box of tomatoes is filled to exceed a 27-pound net 
weight, there is an increased chance that tomatoes will be crushed when 
placing the lid on the container. Overfilling could also result in 
fruit being damaged during shipment.
    The market for red, vine-ripe tomatoes has grown over the past few 
years. The Committee now estimates that between five and fifteen 
percent of the total daily fresh tomato shipments from Florida are 
producer field-packed tomatoes. This is a one to two percent increase 
from last season. Retailers consider the fast growing market for red, 
vine-ripe tomatoes to be the way of the future and the Committee 
estimates that the volume of producer field-packed tomatoes will 
continue to grow in order to supply this market. Therefore, the 
Committee wants to continue to develop this market by providing a 
uniform, quality product.
    To accomplish these goals, this rule removes the exemption from the 
net weight requirement for producer field-packed tomatoes, and requires 
producer field-packed tomatoes to meet the same net weight and weight 
labeling requirements as those packed in a packinghouse.
    The two Committee members who opposed the recommendation agreed 
that a problem exists with the net weight exemption for producer field-
packed tomatoes. However, they were not sure that the action 
recommended was the best solution to the problem and wanted more time 
to consider the issue. Therefore, they voted against the proposal.
    Section 8e 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 pack and container requirements on 
imports, when such requirements are in effect under a domestic 
marketing order. Therefore, no change is necessary in the tomato import 
regulation as a result of this action.
    This change will not affect the exemption for single layer and two-
layer place packed tomatoes. They will continue to be exempt from the 
net weight requirements under the order. Therefore, producer field-
packed tomatoes place packed in single or two layer packs will continue 
to be exempt from the net weight requirements.

Final 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 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.
    There are approximately 82 handlers of Florida tomatoes who are 
subject to regulation under the marketing order and approximately 100 
tomato producers in the regulated area. 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 $750,000. Since the proposed rule was published, the 
benchmark for small producers was increased from $500,000.
    Based on the industry and Committee data, the average annual price 
for fresh Florida tomatoes during the 2000-01 season was $9.16 per 25-
pound carton or equivalent, and total fresh shipments for the 2000-01 
season were 53,649,508 25-pound equivalent cartons of tomatoes. Based 
on this information, the majority of handlers would be classified as 
small entities as defined by the SBA. The majority of producers of 
Florida tomatoes may also be classified as small entities.
    This final rule revises the handling requirements currently 
prescribed for producer field-packed tomatoes under Sec. 966.323 of the 
order. Currently, producer field-packed tomatoes are exempt from the 
net weight requirements under the order. The net weight requirement 
only allows packinghouses to put between 25 and 27 pounds of tomatoes 
into a box designed to hold 25 pounds. Some handlers of producer field-
packed tomatoes are adding additional tomatoes to their containers to 
the detriment of handlers required to meet the net weight requirements. 
This rule removes the exemption from the net weight

[[Page 48532]]

requirement for producer field-packed tomatoes and requires all 
tomatoes, regardless of where they are packed, to meet the same net 
weight requirements. Authority for this action is provided in 
Sec. 966.52 of the order.
    There could be some additional costs associated with this rule. 
Removing the net weight exemption will require those packing producer 
field-packed tomatoes to take the steps necessary to ensure that the 
tomatoes meet the net weight requirement. This could result in 
additional costs from the purchase of equipment to weigh the boxes and 
additional labor needed. However, many of those packing producer field-
packed tomatoes have already incurred these costs and are meeting the 
net weight requirements voluntarily.
    Currently, boxes containing between 28 and 32 pounds of field-
packed tomatoes may be sold for the same price as a box containing 25 
to 27 pounds of tomatoes. This reduces total pack out, depresses price, 
and reduces returns to the grower. In addition, these tomatoes are 
being sold into what retailers consider to be the fastest growing 
segment of the tomato market. Over packing boxes increases the 
probability that some tomatoes will be damaged. Shipping damaged 
tomatoes could have a negative impact on the market and the ability of 
Florida tomato handlers in meeting that market's needs. This rule will 
help counter that possibility.
    This rule was recommended to benefit the Florida tomato industry. 
The costs or benefits of this rule will not be disproportionately 
greater or less for small handlers or producers than for larger 
entities.
    The Committee discussed alternatives to this change, including 
making no change to the regulation. However, Committee members agreed 
that action needed to be taken, so this alternative was rejected. 
Another alternative considered was to change the size of the box for 
field-packed tomatoes. Some members of the Committee stated that this 
would not solve the problem, only add another box size, noting that 
handlers are already selling a 25-pound container of producer field-
packed tomatoes that weighs more than 25 pounds. Changing only the size 
of the container would not prevent handlers from continuing to overfill 
the cartons. Therefore, this alternative was also rejected.
    This final rule removes the exemption from the net weight 
requirement for producer field-packed tomatoes under the Florida tomato 
marketing order.
    This final 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 sector agencies. In addition, the 
Department has not identified any relevant Federal rules that 
duplicate, overlap or conflict with this final 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 on all issues. 
Like all Committee meetings, the February 27, 2001, meeting was a 
public meeting and all entities, both large and small, were able to 
express views on this issue.
    A proposed rule concerning this action was published in the Federal 
Register on August 2, 2001 (66 FR 40158). Copies of the rule were 
mailed or sent via facsimile to all Committee members and tomato 
handlers. Finally, the rule was made available through the Internet by 
the Office of the Federal Register and the Department. A 20-day comment 
period ending August 22, 2001, was provided to allow interested persons 
to respond to the proposal.
    Two comments were received during the comment period in response to 
the proposal. The comments were from two industry groups in support of 
the proposed action. The points made in the comments reflected 
information included in the proposed rule and were thoroughly discussed 
prior to the Committee vote.
    Accordingly, no changes will be made to the rule as proposed, based 
on the comments received.
    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.
    After consideration of all relevant matter presented, including the 
information and recommendation submitted by the Committee, the comments 
received, and other available information, it is hereby found that this 
rule, as hereinafter set forth, will tend to effectuate the declared 
policy of the Act.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because the final rule needs to be 
effective by the start of the 2001-02 season, which begins October 10, 
2001. Further, handlers are aware of this rule, which was recommended 
at a public meeting. Also, a 20-day comment period was provided for in 
the proposed rule, and two comments supporting the action were 
received.

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 the last sentence of 
paragraph (d)(1) to read as follows:


Sec. 966.323  Handling regulation.

* * * * *
    (d) Exemption. (1) * * * Producer field-packed tomatoes must meet 
all of the requirements of this section except for the requirement that 
all containers must be packed at registered handler facilities as 
specified in paragraph (a)(3)(ii) of this section, and the requirement 
that such tomatoes designated as size 6  x  6 must meet the maximum 
diameter requirement specified in paragraph (a)(2)(i) of this section: 
Provided, That 6  x  6 and larger is used to indicate the listed size 
designation on containers.
* * * * *

    Dated: September 17, 2001.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 01-23648 Filed 9-20-01; 8:45 am]
BILLING CODE 3410-02-P