[Federal Register Volume 68, Number 174 (Tuesday, September 9, 2003)]
[Rules and Regulations]
[Pages 53021-53024]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-22948]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 905 and 944

[Docket No. FV03-905-2 IFR]


Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida 
and Imported Grapefruit; Removing All Seeded Grapefruit Regulations, 
Relaxation of Grade Requirements for Valencia and Other Late Type 
Oranges, and Removing Quality and Size Regulations on Imported Seeded 
Grapefruit

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule removes the regulations for seeded grapefruit under 
the Florida citrus marketing order and for seeded grapefruit imported 
into the United States. The order regulates the handling of oranges, 
grapefruit, tangerines, and tangelos grown in Florida (order) and is 
administered locally by the Citrus Administration Committee 
(committee). The change in the import regulation is required under 
section 8e of the Agricultural Marketing Agreement Act of 1937. 
Production of seeded grapefruit in Florida has declined to the point 
that removing seeded grapefruit from order requirements will have no 
significant impact on the grapefruit market. This rule also relaxes 
minimum grade requirements for domestic shipments of fresh Valencia and 
other late type oranges the last few weeks of the season. The volume 
remaining at the end of the season is small and has difficulty meeting 
grade requirements. This rule will help maximize shipments and returns 
for fresh Valencia and other late type oranges.

DATES: September 10, 2003; comments received by November 10, 2003 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, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; 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 made 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: William Pimental, Southeast Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA, 799 Overlook Drive, Suite A, Winter 
Haven, FL 33884; telephone: (863) 324-3375, Fax: (863) 325-8793; or 
George Kelhart, Technical Advisor, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; 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, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-
2491, Fax: (202) 720-8938, or E-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 84 and Marketing Order No. 905, both as amended (7 CFR 
part 905), regulating the handling of oranges, grapefruit, tangerines, 
and tangelos 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 (USDA) 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 USDA 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 USDA 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 USDA'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 removes the regulations for seeded grapefruit under the 
order for Florida citrus. Thus, handlers of seeded grapefruit are no 
longer subject to minimum grade, size, assessment, and reporting 
requirements under the order. Production has declined to the point that 
removing seeded grapefruit from order requirements will have no 
significant impact on the grapefruit market. This rule also relaxes the 
minimum grade requirements for domestic shipments of fresh Valencia and 
other late type oranges the last few weeks of the season. For the 
purposes of this interim final rule, the term ``domestic shipments'' 
includes shipments between the production area and any point outside 
thereof in the 48 contiguous States and the District of Columbia of the 
United States. The volume of fruit remaining at the end of the season 
is small and has difficultly meeting grade requirements. This rule will 
help the industry maximize fresh shipments and returns for Valencia and

[[Page 53022]]

other late type oranges. These actions were unanimously recommended by 
the committee at its meeting on July 1, 2003.
    Sections 905.51 and 905.52 of the order authorize the committee to 
recommend minimum grade and size regulation to USDA. The grade and size 
requirements are designed to provide fresh markets with citrus fruit of 
acceptable quality and size. 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.
    Section 905.306 of the order's rules and regulations specifies the 
minimum grade and size requirements for different varieties of fresh 
Florida citrus. 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). Currently, the minimum grade for domestic 
seeded grapefruit is a U.S. No. 1 as specified in the U.S. Standard for 
Grades of Florida Grapefruit (7 CFR 51.750 through 51.784), with a 
minimum size of 3\12/16\ inches in diameter for domestic shipments, and 
3\9/16\ inches for export shipments. The minimum grade for domestic 
Valencia and other late type oranges is a U.S. No. 1 as specified in 
the U.S. Standard for Grades of Florida Oranges and Tangelos (7 CFR 
51.1140 through 51.1179), with a minimum size of 2\8/16\ inches in 
diameter for both domestic and export shipments.
    Under Sec. Sec.  905.51 and 905.52 of the order, the committee has 
authority to recommend to USDA the varieties of citrus to be regulated. 
This rule modifies Sec.  905.306 by removing seeded grapefruit from the 
list of entries in Table I of paragraph (a), and in Table II of 
paragraph (b). The removal of seeded grapefruit from these tables has 
the effect of removing the grade and size requirements for seeded 
grapefruit under the order. Also, assessment and reporting requirements 
would no longer apply to seeded grapefruit. In addition, this rule 
further amends Table I of Sec.  905.306 by reducing the minimum grade 
requirements for domestic shipments of fresh Valencia and other late 
type oranges from U.S. No. 1 to U.S. No. 2 external grade from June 15 
to July 31, each season.
    In making its recommendation, the committee recognized that seeded 
grapefruit is no longer significant in terms of shipments and market 
share. During the 2002-03 season, only 150 cartons of seeded grapefruit 
were shipped to the fresh market. This is down from 4,705 cartons 
shipped in the 1998-99 season. Currently, shipments of seeded 
grapefruit represent less than .0005 percent of fresh shipments of 
Florida grapefruit. Seeded grapefruit production has declined as new 
seedless varieties have been developed and planted. Consequently, the 
committee determined that removing seeded grapefruit varieties from the 
order regulations will not have a negative impact on the grapefruit 
market.
    In addition, this rule also relaxes the minimum grade requirements 
for domestic shipments of fresh Valencia and other late oranges. The 
committee recommended reducing the minimum grade requirements for 
Valencia and other late type oranges from a U.S. No. 1 to a U.S. No. 2 
external grade with a U.S. No. 1 internal grade from June 15, 2004, to 
July 31, 2004, and during the same period of each season thereafter. 
Valencia and late type oranges have difficulty meeting grade 
requirements late in the season. This is usually due to regreening, 
which is considered a defect under the U.S. Standard for Grades of 
Oranges.
    At the end of the season growers still have a limited volume of 
unharvested Valencia and late type oranges. The volume of fruit 
remaining after June 15 is small, averaging less than 5 percent of the 
crop over the last 5 years. The committee believes that permitting the 
shipment of a U.S. No. 2 external grade during the specified time would 
help the industry maximize fresh shipments and returns for Valencia and 
other late type oranges. Consequently, the committee recommended that 
during the period June 15 to July 31 the grade standard be lowered to 
U.S. No. 2 external grade with U.S. No. 1 internal grade for Valencia 
and other late type oranges shipped to domestic markets.
    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 removes the minimum size and grade requirements for seeded 
grapefruit 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). The minimum grade and size requirements are specified in a 
table in paragraph (a) of Sec.  944.106. This rule removes the minimum 
grade and size requirements for imported seeded grapefruit to reflect 
the change being made under the order for seeded grapefruit grown in 
Florida.
    Section 8e import requirements for oranges are based on the 
marketing order for South Texas oranges and as such will not be 
impacted by this relaxation.

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 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 75 grapefruit and Valencia and other late 
type orange handlers subject to regulation under the order, 
approximately 11,000 producers of Florida citrus in the regulated area, 
and approximately 10 grapefruit importers. 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.
    Based on industry and Committee data, the average annual f.o.b. 
price for fresh Florida grapefruit during the 2002-03 season was 
approximately $7.24 per \4/5\ bushel carton, and total fresh shipments 
for the 2002-03 season are estimated at 28.3 million cartons of 
grapefruit. The average annual f.o.b. price for fresh Florida Valencia 
and other late type oranges during the 2002-03 season was approximately 
$6.99 per carton, and total fresh shipments are estimated at 3,669,000 
cartons. Approximately 25 percent of all handlers handled 75 percent of 
Florida's grapefruit and Valencia and other late type orange shipments. 
Using the average f.o.b. prices, at least 75 percent of the grapefruit 
and Valencia and other late type orange handlers could be considered 
small businesses under SBA's definition. Therefore, the majority of 
Florida grapefruit and Valencia and other late type orange handlers may 
be classified as small entities. In addition, based on information from 
the Foreign Agricultural Service, USDA, the dollar

[[Page 53023]]

value of imported grapefruit ranged from $902,000 in 1998 to $2,018,000 
during the 2002 season. Using these numbers, all grapefruit importers 
may be classified as small entities. The majority of Florida grapefruit 
and Valencia and other late type orange producers may also be 
classified as small entities.
    This rule removes seeded grapefruit from regulation under the 
order. Handlers of seeded grapefruit will no longer be required to meet 
the minimum grade and size requirements and will not be subject to 
assessments and reporting requirements. Removing these varieties from 
the minimum grade and size requirements will have no significant impact 
on the grapefruit market. This rule also reduces the minimum grade 
requirements for domestic shipments of fresh Valencia and other late 
type oranges from U.S. No. 1 to U.S. No. 2 external grade from June 15 
to July 31 each season. This rule will help maximize shipments and 
returns for fresh Valencia and other late type oranges.
    Sections 905.51 and 905.52 of the order authorize the committee to 
recommend minimum grade and size regulation to USDA. Section 905.306 of 
the order's rules and regulation specifies the regulation period and 
the minimum grade and size requirements for different varieties of 
fresh Florida citrus. The Committee unanimously recommended this action 
at a meeting on July 1, 2003.
    During the 2002-2003 season, only 150 cartons of seeded grapefruit 
were shipped out of a total of 28.3 million \4/5\ bushel cartons of 
seedless grapefruit. Production of seeded varieties has declined as 
newer seedless varieties have been developed and planted. Current 
market share and shipment levels justify removal of the order 
requirements for seeded grapefruit.
    Valencia and late type oranges have difficulty meeting grade 
requirements late in the season. At the end of the season, growers 
still have a limited volume of unharvested Valencia and late type 
oranges. The volume of fruit remaining after June 15 is small, 
averaging less than 5 percent of the crop over the last 5 years. The 
committee believes permitting the shipment of a U.S. No. 2 external 
grade with a minimum U.S. No. 1 internal grade from June 15 to July 31 
for domestic shipments will help the industry maximize fresh shipments 
and returns for Valencia and other late type oranges.
    This rule is expected to have a positive impact on affected 
entities as it relaxes handling requirements. With this rule removing 
seeded grapefruit from the varieties regulated, handlers will be able 
to market these varieties free from order requirements. In addition, 
the relaxation in grade requirements from June 15 to July 31 each 
season for Valencia and other late type oranges will allow handlers to 
make additional supplies available for the fresh domestic market, thus, 
increasing returns. No additional costs are imposed on growers, 
handlers, and importers with this rule. The benefits derived from this 
change are expected to benefit both large and small entities equally.
    During the period January 1 through December 31, 2002, imports of 
grapefruit totaled 23,246 metric tons (approximately 1,100,000 
cartons). The Bahamas were the principal source, accounting for nearly 
99 percent of the total. Remaining imports were supplied by Israel. 
Most imported grapefruit enters the United States from October through 
May.
    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 requirements for domestic seeded grapefruit 
shipments, this change must also be applicable to imported grapefruit. 
This rule removes the import requirements for seeded grapefruit. This 
regulation will benefit importers to the same extent that it benefits 
Florida grapefruit producers and handlers.
    One alternative to this action was to make no changes to the 
order's handling regulations. However, the committee believes seeded 
grapefruit varieties have no significant impact on the grapefruit 
market and that action should be taken to remove them from the handling 
regulations. In addition, the committee believes making additional 
supplies of oranges available late in the season may increase returns. 
Therefore, the alternative of making no changes was rejected.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large citrus 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, USDA 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 citrus industry and all interested persons were invited to attend 
the meeting and participate in Committee deliberations. Like all 
Committee meetings, the July 1, 2003, 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.
    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.
    This rule invites comments on the removal of seeded grapefruit from 
requirements currently prescribed under the marketing order for Florida 
citrus and the grapefruit import regulation. This rule also invites 
comments on the relaxation of minimum grade requirements for fresh 
Valencia and other late type oranges. Any comments received will be 
considered prior to finalization of this rule.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that 
this interim final rule, as hereinafter set forth, will tend to 
effectuate the declared policy of the Act.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance 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) Handlers will begin shipments of seeded grapefruit in mid-
September 2003 and the removal of regulations should be effective by 
that time; (2) the committee recommended these changes at a public 
meeting and interested parties had an opportunity to provide input; and 
(3) this rule provides a 60-day comment period and any comments 
received will be considered prior to finalization of this rule.

List of Subjects

7 CFR Part 905

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

[[Page 53024]]

7 CFR Part 944

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

0
For the reasons set forth in the preamble, 7 CFR parts 905 and 944 are 
amended as follows:
0
1. The authority citation for 7 CFR parts 905 and 944 continues to read 
as follows:

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

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

0
2. Section 905.306 is amended by:
0
a. In paragraph (a), by removing under the heading ``Grapefruit'', 
entries for ``Seeded, except red'' and ``Seeded, red'' from Table I and 
under the heaading ``Oranges'' revising the entry for ``Valencia and 
other late type'';
0
b. In paragraph (b), by removing under the heading ``Grapefruit'' 
entries for ``Seeded, except red'' and ``Seeded, red'' from Table II.
    The revisions to Table I read as follows:


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

    (a) * * *

                                                     Table I
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                                                                                                       Minimum
               Variety                       Regulation period                Minimum grade           diameter
                                                                                                      (inches)
----------------------------------------------------------------------------------------------------------------
(1)                                    (2)..........................  (3).........................           (4)
--------------------------------------
 
                                                  * * * * * * *
Valencia and other late type.........  August 1 June 14.............  U.S. No. 1, U.S. No. 2,            2\8/16\
                                                                       External.
                                       June 15 July 31..............  U.S. No. 1, Internal........       2\8/16\
 
                                                  * * * * * * *

* * * * *

PART 944--FRUITS; IMPORT REGULATIONS

0
3. In Sec.  944.106(a), the entry for ``Seeded'' is removed from the 
table.

    Dated: September 4, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-22948 Filed 9-4-03; 3:16 pm]
BILLING CODE 3410-02-P