[Federal Register Volume 69, Number 43 (Thursday, March 4, 2004)]
[Rules and Regulations]
[Pages 10135-10137]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-4860]



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  Federal Register / Vol. 69, No. 43 / Thursday, March 4, 2004 / Rules 
and Regulations  

[[Page 10135]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 906

[Docket No. FV04-906-1 FIR]


Oranges and Grapefruit Grown in Lower Rio Grande Valley in Texas; 
Increased Assessment Rate

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule which increased the 
assessment rate established for the Texas Valley Citrus Committee 
(Committee) for the 2003-04 and subsequent fiscal periods from $0.11 to 
$0.14 per 7/10-bushel carton or equivalent of oranges and grapefruit 
handled. The Committee locally administers the marketing order which 
regulates the handling of oranges and grapefruit grown in the Lower Rio 
Grande Valley in Texas. Authorization to assess orange and grapefruit 
handlers enables the Committee to incur expenses that are reasonable 
and necessary to administer the program. The fiscal period began August 
1 and ends July 31. The assessment rate will remain in effect 
indefinitely unless modified, suspended, or terminated.

EFFECTIVE DATE: April 5, 2004.

FOR FURTHER INFORMATION CONTACT: Belinda G. Garza, Regional Manager, 
McAllen Marketing Field Office, Marketing Order Administration Branch, 
Fruit and Vegetable Programs, AMS, USDA, 1313 E. Hackberry, McAllen, TX 
78501; telephone: (956) 682-2833, Fax: (956) 682-5942; 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 and Order No. 906, as amended (7 CFR part 906), regulating 
the handling of oranges and grapefruit grown in the Lower Rio Grande 
Valley in Texas, 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.''
    USDA is issuing this rule in conformance with Executive Order 
12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under the marketing order now in effect, orange and 
grapefruit handlers in the Lower Rio Grande Valley in Texas are subject 
to assessments. Funds to administer the order are derived from such 
assessments. It is intended that the assessment rate as issued herein 
will be applicable to all assessable oranges and grapefruit beginning 
August 1, 2003, and continue until amended, suspended, or terminated. 
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. Such 
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.
    This rule continues to increase the assessment rate established for 
the Committee for the 2003-04 and subsequent fiscal periods from $0.11 
to $0.14 per 7/10-bushel carton or equivalent of oranges and grapefruit 
handled.
    The Texas orange and grapefruit marketing order provides authority 
for the Committee, with the approval of USDA, to formulate an annual 
budget of expenses and collect assessments from handlers to administer 
the program. The members of the Committee are producers and handlers of 
Texas oranges and grapefruit. They are familiar with the Committee's 
needs and with the costs for goods and services in their local area and 
are thus in a position to formulate an appropriate budget and 
assessment rate. The assessment rate is formulated and discussed in a 
public meeting. Thus, all directly affected persons have an opportunity 
to participate and provide input.
    For the 2002-03 and subsequent fiscal periods, the Committee 
recommended, and USDA approved, an assessment rate that would continue 
in effect from fiscal period to fiscal period unless modified, 
suspended, or terminated by USDA upon recommendation and information 
submitted by the Committee or other information available to USDA.
    The Committee met on May 29, 2003, and unanimously recommended 
2003-04 expenses of $1,222,506 for management, administration, 
compliance, a Mexican Fruit Fly program, and advertising and promotion. 
The Committee recommended that the assessment rate of $0.11 per 7/10-
bushel carton continue for the 2003-04 fiscal period. The quantity of 
assessable citrus was estimated at 10 million 7/10-bushel cartons or 
equivalents.
    The Committee met again on October 8, 2003, and unanimously 
recommended revised 2003-04 expenditures of $1,322,506 and an 
assessment rate of $0.14 per 7/10-bushel carton or equivalent of 
oranges and grapefruit. In comparison, last year's budgeted 
expenditures were $1,226,022. The assessment rate of $0.14 is $0.03

[[Page 10136]]

higher than the rate previously in effect. The Committee recommended 
the $0.14 assessment rate to cover the increased costs associated with 
implementing a more comprehensive Mexican Fruit Fly program, and a 
significant decrease in the assessable production estimate for the 
2003-04 marketing season. At this meeting, the estimate of assessable 
citrus was reduced to 9 million 7/10-bushel cartons or equivalents.
    The major expenditures recommended by the Committee for the 2003-04 
fiscal period include $800,000 for advertising, $279,000 for the 
Mexican Fruit Fly program, $119,929 for management and administration 
of the marketing order program, and $72,777 for compliance. Budgeted 
expenses for these items in 2002-03 were $810,500, $179,000, $107,845, 
and $74,777, respectively.
    As mentioned earlier, the Committee's fiscal period begins August 
1. There are no citrus shipments out of the production area during the 
months of August, September, and part of October. Some shippers begin 
shipping during the latter part of October, but shipments are light 
until late November when heavier shipments begin. On October 31, 2003, 
the Committee's reserve totaled $16,230. The Committee needed to make 
significant advertising and promotion expenditures (about $60,000) 
during November.
    The Committee believed that assessment billings at the lower $0.11 
per 7/10-bushel carton rate would not be sufficient to cover all of its 
expenses. Assessing at the higher $0.14 rate sooner would enable the 
Committee to maintain its reserves at a satisfactory level and ensure 
that all of its obligations are met.
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of Texas oranges 
and grapefruit. Texas orange and grapefruit shipments for the fiscal 
period are estimated at 9 million 7/10-bushel cartons or equivalents, 
which should provide $1,260,000 in assessment income. Income derived 
from handler assessments, along with interest income and funds from the 
Committee's authorized reserve, will be adequate to cover budgeted 
expenses. Funds in the reserve (currently $23,000) will be kept within 
the maximum of one fiscal period's expenses permitted by the order 
(Sec.  906.35).
    The assessment rate established in this rule will continue in 
effect indefinitely unless modified, suspended, or terminated by USDA 
upon recommendation and information submitted by the Committee or other 
available information.
    Although this assessment rate is effective for an indefinite 
period, the Committee will continue to meet prior to or during each 
fiscal period to recommend a budget of expenses and consider 
recommendations for modification of the assessment rate. The dates and 
times of Committee meetings are available from the Committee or USDA. 
Committee meetings are open to the public and interested persons may 
express their views at these meetings. USDA will evaluate Committee 
recommendations and other available information to determine whether 
modification of the assessment rate is needed. Further rulemaking will 
be undertaken as necessary. The Committee's 2003-04 budget and those 
for subsequent fiscal periods will be reviewed and, as appropriate, 
approved by USDA.

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 rule 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 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 214 producers of oranges and grapefruit in 
the production area and approximately 16 handlers subject to regulation 
under the marketing order. Small agricultural producers are defined by 
the Small Business Administration (SBA) (13 CFR 121.201) as those 
having annual receipts less than $750,000, and small agricultural 
service firms are defined as those whose annual receipts are less than 
$5,000,000.
    An updated Texas citrus industry profile shows that 6 of the 16 
handlers (38 percent) shipped over 588,235 7/10-bushel carton 
equivalents of oranges and grapefruit. Using an average f.o.b. price of 
$8.50 per 7/10-bushel carton, these handlers could be considered large 
businesses under SBA s definition, and the remaining 10 handlers (62 
percent) could be considered small businesses. Of the approximately 214 
producers within the production area, few have sufficient acreage to 
generate sales in excess of $750,000. Thus, the majority of handlers 
and producers of Texas oranges and grapefruit may be classified as 
small entities.
    This rule continues to increase the assessment rate established for 
the Committee and collected from handlers for the 2003-04 and 
subsequent fiscal periods from $0.11 to $0.14 per 7/10-bushel carton or 
equivalent of oranges and grapefruit.
    The Committee met on May 29, 2003, and unanimously recommended 
2003-04 expenses of $1,222,506 for management, administrative, 
compliance, a Mexican Fruit Fly program, and advertising and promotion. 
The Committee recommended that the assessment rate of $0.11 per 7/10-
bushel carton continue for the 2003-04 fiscal period. The quantity of 
assessable citrus was estimated at 10 million 7/10-bushel cartons or 
equivalents.
    The Committee met again on October 8, 2003, and unanimously 
recommended revised 2003-04 expenditures of $1,322,506 and an 
assessment rate of $0.14 per 7/10-bushel carton or equivalent of 
oranges and grapefruit. In comparison, last year's budgeted 
expenditures were $1,226,022. The assessment rate of $0.14 is $0.03 
higher than the rate previously in effect. The Committee recommended 
the $0.14 assessment rate to cover the increased costs associated with 
the Committee's desire to implement a more comprehensive Mexican Fruit 
Fly program, and a significant decrease in the assessable production 
estimate for the 2003-04 marketing season. At this meeting, the 
estimate of assessable citrus was reduced to 9 million 7/10-bushel 
cartons or equivalents.
    The major expenditures recommended by the Committee for the 2003-04 
fiscal period include $800,000 for advertising, $279,000 for the 
Mexican Fruit Fly program, $119,929 for management and administration 
of the marketing order program, and $72,777 for compliance. Budgeted 
expenses for these items in 2002-03 were $810,500, $179,000, $107,845, 
and $74,777, respectively.
    The Committee's fiscal period begins August 1. There are no citrus 
shipments out of the production area during the months of August, 
September, and part of October. Some shippers begin shipping during the 
latter part of October, but shipments are light until late November 
when heavier shipments begin. On October 31, 2003, the Committee's 
reserve totaled $16,230. The Committee needed to make significant 
advertising and promotion

[[Page 10137]]

expenditures (about $60,000) during November.
    The Committee believed that assessment billings at the lower $0.11 
per 7/10-bushel carton rate would not be sufficient to cover all of its 
expenses. Assessing at the higher $0.14 rate sooner would enable the 
Committee to maintain its reserves at a satisfactory level and ensure 
that all of its obligations are met. Funds in the reserve (currently 
$23,000) will be kept within the maximum of one fiscal period's 
expenses permitted by the order (Sec.  906.35).
    The assessment rate recommended by the Committee was derived by 
dividing anticipated expenses by expected shipments of Texas oranges 
and grapefruit. Texas orange and grapefruit shipments for the fiscal 
period are estimated at 9 million 7/10-bushel cartons or equivalents, 
which should provide $1,260,000 in assessment income. Income derived 
from handler assessments, along with interest income and funds from the 
Committee's authorized reserve, will be adequate to cover budgeted 
expenses.
    In arriving at this budget, the Committee considered information 
from various sources, including the Committee's Executive Committee. 
Alternative expenditure levels were discussed based upon the relative 
need of the Mexican Fruit Fly program to the Texas citrus industry.
    The proposed assessment rate of $0.14 per 7/10-bushel carton of 
assessable oranges and grapefruit was then determined by dividing the 
total recommended budget by the 9 million 7/10-bushel cartons of 
oranges and grapefruit estimated for the 2003-04 fiscal period. The 
$0.14 rate will provide $1,260,00 in assessment income. The additional 
$62,506 to fund the Committee's estimated expenses will come from the 
Committee's reserve and interest income.
    A review of historical information (October 1999 through May 2003) 
and preliminary information pertaining to the upcoming fiscal period 
indicates that the packinghouse door price for the 2003-04 fiscal 
period could range monthly, from $0.26 to $6.41 per 7/10-bushel carton 
of Texas oranges and from $1.30 to $7.30 for Texas grapefruit, 
depending upon the fruit variety, size, and quality. Therefore, the 
estimated assessment revenue for the 2003-04 fiscal period as a 
percentage of total grower (packinghouse door) revenue could range 
between 2.2 and 53.8 percent for oranges and 1.9 to 10.8 percent for 
grapefruit.
    This action continues to increase the assessment obligation imposed 
on handlers. While assessments impose some additional costs on 
handlers, the costs are minimal and uniform on all handlers. Some of 
the additional costs may be passed on to producers. However, these 
costs are offset by the benefits derived by the operation of the 
marketing order. In addition, the Committee's meetings were widely 
publicized throughout the Texas orange and grapefruit industry and all 
interested persons were invited to attend the meetings and participate 
in Committee deliberations on all issues. Like all Committee meetings, 
the May 29 and October 8, 2003, meetings were public meetings and all 
entities, both large and small, were able to express views on this 
issue.
    This action imposes no additional reporting or recordkeeping 
requirements on either small or large Texas orange and grapefruit 
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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.
    An interim final rule concerning this action was published in the 
Federal Register on November 25, 2003 (68 FR 66001). Copies of that 
rule were also mailed or sent via facsimile to all orange and 
grapefruit handlers. Finally, the interim final rule was made available 
through the Internet by USDA and the Office of the Federal Register. A 
60-day comment period was provided for interested persons to respond to 
the interim final rule. The comment period ended on January 26, 2004, 
and one comment opposing the assessment increase was received.
    The commenter, a Texas citrus producer, stated that he opposes the 
increased assessment rate because he has lost money growing grapefruit. 
The commenter does not want to pay an assessment for grapefruit to the 
Committee.
    Under the marketing order, assessments are collected from handlers 
of Texas citrus to cover order expenses. As stated previously in the 
regulatory flexibility analysis, some of the assessment costs may be 
passed on to producers by their handlers. However, USDA concluded that 
such costs are offset by the benefits derived by the operation of the 
marketing order.
    The commenter went on to ask what could be done to remove 
themselves from this situation. USDA established the Texas citrus order 
at the request of producers to help the producers work together to 
solve marketing problems that they could not solve individually. 
However, procedures are available to modify, suspend, or terminate an 
order. Further, the Committee manager is available to discuss the 
operation of the marketing order with industry members.
    Based on the foregoing, no changes are being made to the assessment 
rate established by the interim final rule.
    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 material presented, including 
the information and recommendation submitted by the Committee 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.

List of Subjects in 7 CFR Part 906

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

PART 906--ORANGES AND GRAPEFRUIT GROWN IN LOWER RIO GRANDE VALLEY 
IN TEXAS

0
Accordingly, the interim final rule amending 7 CFR part 906 which was 
published at 68 FR 66001 on November 25, 2003, is adopted as a final 
rule without change.

    Dated: February 27, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-4860 Filed 3-3-04; 8:45 am]
BILLING CODE 3410-02-P