[Federal Register Volume 69, Number 157 (Monday, August 16, 2004)]
[Rules and Regulations]
[Pages 50275-50278]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-18608]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 905

[Docket No. FV04-905-5 IFR]


Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida; 
Modifying the Procedures Used To Limit the Volume of Small Red Seedless 
Grapefruit Grown in Florida

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule changes the procedures used to limit the volume of 
sizes 48 and 56 red seedless grapefruit entering the fresh market under 
the marketing order for oranges, grapefruit, tangerines, and tangelos 
grown in Florida (order). The order is administered locally by the 
Citrus Administrative Committee (committee). This rule changes the way 
a handler's average week is calculated when quantities of small red 
seedless grapefruit are regulated by adjusting the prior period used 
from five preceding seasons to three preceding seasons, and the 
provisions governing overshipments. This action makes the regulation 
more responsive to industry needs and better allocates base quantities.

DATES: Effective August 17, 2004; comments received by September 15, 
2004 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, E-mail: [email protected]; or 
Internet: http://www.regulations.gov. 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: Doris Jamieson, Southeast Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA, 799 Overlook Drive, Suite A, Winter 
Haven, Florida 33884; telephone: (863) 324-3375, Fax: (863) 325-8793; 
or George Kelhart, Technical Advisor, Marketing

[[Page 50276]]

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.
    This rule changes the procedures used to limit the volume of sizes 
48 and 56 red seedless grapefruit entering the fresh market. This rule 
changes the way a handler's average week is calculated for when 
quantities of small red seedless grapefruit are regulated by adjusting 
the prior period used from five preceding seasons to three preceding 
seasons. This action also changes provisions governing overshipments. 
This rule makes the regulation more responsive to industry needs and 
better allocates base quantities. The committee unanimously recommended 
these changes at a meeting held on June 15, 2004.
    In a separate action, USDA is issuing an interim final rule 
establishing percentages for each week of the 22-week regulatory period 
for the 2004-05 shipping season. This rule also appears in this issue 
of the Federal Register.
    Section 905.52 of the order provides authority to limit shipments 
of any grade or size, or both, of any variety of Florida citrus. Such 
limitations may restrict the shipment of a portion of a specified grade 
or size of a variety. Under such a limitation, the quantity of such 
grade or size a handler may ship during a particular week would be 
established as a percentage of the total shipments of such variety by 
such handler in a prior period, established by the committee and 
approved by USDA.
    Section 905.153 of the regulations specifies procedures for 
limiting the volume of small red seedless grapefruit entering the fresh 
market. Currently, this section defines the prior period as required by 
Sec.  905.52 as an average week within the immediately preceding five 
seasons. An average week is calculated for each handler. This section 
specifies that the Committee may recommend only a certain percentage of 
sizes 48 and 56 red seedless grapefruit be made available for fresh 
shipment for any week or weeks during the regulatory period. Under such 
a limitation, the quantity of sizes 48 and 56 red seedless grapefruit 
that a handler may ship is calculated by taking the recommended 
percentage times the handler's average week. Section 905.153 also 
details overshipment provisions specifying that any handler may ship an 
amount of sizes 48 and 56 red seedless grapefruit up to 10 percent 
greater than their allotted volume each week. The quantity of such 
overshipment is deducted from the handler's allotment for the following 
week. Overshipments are not permitted during week 22, which now is the 
final regulatory week.
    This rule amends Sec.  905.153 by revising the definition of prior 
period and the language governing overshipments. This rule changes the 
number of preceding seasons used to calculate a handler's average week 
from five preceding seasons to three preceding seasons. This rule also 
changes the provisions regarding overshipments by redefining when 
overshipments are permitted.
    Section 905.52 specifies that whenever any size limitation 
restricts the shipment of a portion of a specified size, the quantity 
each handler may ship during a particular week shall be based on a 
prior period recommended by the committee and approved by USDA. When 
the committee recommended the procedures in Sec.  905.153 to limit the 
volume of small red seedless grapefruit entering the fresh market 
during the regulated period (61 FR 69011, December 31, 1996), they 
determined an average week within the preceding five seasons would be 
the prior period used to calculate a handler's base quantity for each 
week of regulation.
    Currently, an average week is calculated by adding the total red 
seedless grapefruit shipments by a handler during the 33-week period 
beginning the third Monday in September for the preceding five seasons. 
This total is divided by five to establish an average season. This 
average season is then divided by the 33 weeks in a season to derive 
the average week. When the committee utilizes these provisions and 
establishes percentages for the regulatory period, a handler's average 
week is multiplied by the applicable percentage to establish that 
handler's base quantity for shipping small red seedless grapefruit 
during that particular week.
    The committee initially chose to use the past five seasons to 
calculate an average season, because it thought that the five-year 
period helped adjust for variations in growing conditions between the 
seasons. At the time, the committee believed using five seasons 
provided the most accurate picture of an average season and by using 
the average season to calculate an average week, provided each handler 
with an equitable base from which to establish shipments.
    However, since these procedures were established, there have been 
many changes in the industry. Some handlers have increased their volume 
of red seedless grapefruit shipments, while others have decreased their 
shipments or stopped shipping grapefruit altogether.
    Because of the continuing changes in the industry, the committee 
believes that using the past five seasons no longer provides the most 
accurate picture of an average season. At its June 15, 2004, meeting, 
the committee discussed the prior period, and unanimously recommended 
changing from a five-season average to a three-season average when 
calculating a handler's average week. The committee believes that this 
adjustment in the prior period will better reflect changes in the 
industry, and better allocate the base

[[Page 50277]]

quantities for all handlers of red seedless grapefruit.
    The committee further believes that the use of a three-season 
average will be more responsive in reallocating base than the current 
five-season average. Under a five-season average, it can be several 
seasons before changes in shipping volume are reflected in the 
allotment a handler receives. With a five-season average, handlers that 
have decided to limit their grapefruit business receive more allotment 
than they need for several seasons even though this allotment could be 
better utilized by handlers that are increasing their market for red 
seedless grapefruit. The committee believes that this change better 
allocates allotment by increasing the base for handlers that have 
increased their red grapefruit shipments and by reducing the base for 
handlers that have reduced their red grapefruit shipments.
    Consequently, the committee also believes that this change will 
reduce the need for loans and transfers by shifting additional base to 
those with increasing shipments. Currently, handlers who are increasing 
their volume of red seedless grapefruit shipments often need additional 
allotment to meet their market demands and rely on the provisions in 
Sec.  905.153 that provide for allotment loans and transfers. Under 
these provisions, a handler may borrow allotment from another handler 
or allotments can be transferred from one handler to another. These 
procedures provide a means for handlers who have increased their volume 
of red seedless grapefruit shipments to meet the demands of the market 
and their buyers.
    However, handlers do not know how much allotment other handlers 
have or if the allotment will be used. The committee believes that this 
change from a five to a three-year average in computing base quantities 
better reflects the needs of the industry and lessens the need for 
loans and transfers. This will benefit handlers and the committee staff 
who process loans and transfers. Therefore, the committee recommended 
changing the prior period used to calculate an average week from five 
seasons to three seasons.
    The committee also discussed revising the provisions in Sec.  
905.153(d) relating to overshipments and the loan or transfer of 
allotment during week 22. As stated previously, any handler may ship an 
amount of sizes 48 and 56 red seedless grapefruit up to 10 percent 
greater than their allotment during any regulated week. The quantity of 
such overshipment is deducted from the handler's allotment for the 
following week. Currently, overshipments are not allowed during week 
22, because week 22 is the last week of the regulation period and does 
not provide an opportunity for repayment of any overshipments.
    The committee is continuously meeting during the regulated period 
to discuss the market for red seedless grapefruit and possible changes 
to the weekly percentages. It believes that market conditions could 
cause it to recommend the removal of regulation prior to the end of 
week 22. To recognize this possibility, the committee recommended 
changing these provisions to specify that overshipments are not 
permitted during the last week of regulation rather than week 22.
    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 grapefruit, imports of that 
commodity must meet the same or comparable requirements. This rule does 
not change the minimum grade and size requirements under the order. 
Therefore, no change is necessary in the grapefruit import regulations 
as a result of this action.

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 75 handlers of Florida grapefruit who are 
subject to regulation under the marketing order and approximately 
11,000 growers of citrus in the regulated area. Small agricultural 
service firms, including handlers, are defined by the Small Business 
Administration (SBA) as those having annual receipts of less than 
$5,000,000, and small agricultural producers are defined as those 
having annual receipts of less than $750,000 (13 CFR 121.201).
    Based on industry and committee data, the average annual f.o.b. 
price for fresh Florida red seedless grapefruit during the 2003-04 
season was approximately $7.58 per \4/5\-bushel carton, and total fresh 
shipments for the 2003-04 season are estimated at 24.7 million cartons 
of red grapefruit. Approximately 25 percent of all handlers handled 75 
percent of Florida's grapefruit shipments. Using the average f.o.b. 
price, at least 80 percent of the grapefruit handlers could be 
considered small businesses under the SBA definition. Therefore, the 
majority of Florida grapefruit handlers may be classified as small 
entities. The majority of Florida grapefruit producers may also be 
classified as small entities.
    This rule revises the procedures used to limit the volume of sizes 
48 and 56 red seedless grapefruit entering the fresh market under the 
order. This rule changes the way a handler's average week is calculated 
for purposes of this limitation by adjusting the prior period used from 
the five preceding seasons to the three preceding seasons. This action 
also amends the language governing overshipments for the last week of 
regulation. This rule revises the provisions of Sec.  905.153. 
Authority for this action is provided in Sec.  905.52 of the order. The 
committee unanimously recommended this action at a meeting on June 15, 
2004.
    This rule revises procedures in Sec.  905.153 used in implementing 
percentage size regulations for small red seedless grapefruit under the 
order. These procedures will be applied uniformly for all handlers 
regardless of size. This action is not expected to decrease the overall 
consumption of red seedless grapefruit.
    While during the period of regulation this change may result in 
some handlers receiving a smaller allotment of small-sized red 
grapefruit, it provides additional allotment to those handlers that 
have increased shipments. This rule changes how each handler's share of 
the weekly allotment is calculated, but has a limited affect on the 
total allotment made available by the weekly percentages. This change 
in itself does not reduce the total weekly industry base available. It 
only reallocates the distribution of the base. Statistics for 2003-04 
show that the total available industry allotment was used in only 3 
weeks of the 22 week regulated period. This change should result in a 
better utilization of the overall industry base allotments. Because the 
base allotments will be readily available to those handlers needing it, 
handlers will be better able to meet buyer needs and additional 
shipments might result.
    In addition, if handlers require additional allotment, they can 
still transfer, borrow, or loan allotment based on their needs in a 
given week. Approximately 315 loans and transfers

[[Page 50278]]

were utilized last season. This rule will help reduce the need for 
loans and transfers by better allocating the available base. This will 
help reduce the amount of time and effort needed to reallocate 
allotment through loans and transfers. This may result in a cost 
savings by reducing administrative costs for the committee.
    This rule provides handlers with allotment more reflective of their 
current operations. In addition, this rule changes the provisions on 
overshipments to provide for the possibility that the committee might 
choose to end regulation prior to week 22. This rule makes the 
regulation more responsive to industry needs and better allocates base 
quantities.
    The committee discussed maintaining the number of seasons used to 
calculate the prior period at five. However, the committee believes 
that a three-season period will result in a better utilization of the 
overall industry base allotment. Therefore, this alternative was 
rejected.
    This action will not impose any additional reporting or 
recordkeeping requirements on either small or large 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. However, red seedless grapefruit 
must meet the requirements as specified in the U.S. Standards for 
Grades of Florida Grapefruit (7 CFR 51.760 through 51.784) issued under 
the Agricultural Marketing Act of 1946 (7 U.S.C. 1621 through 1627).
    In addition, 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 on all 
issues. Like all committee meetings, the June 15, 2004, meeting was a 
public meeting and all entities, both large and small, were able to 
express 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 revises the procedures used to limit the volume of sizes 
48 and 56 red seedless grapefruit entering the fresh market under the 
order. This rule also amends provisions governing overshipments. 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.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this rule until 30 days after publication in the Federal Register 
because: (1) This rule needs to be in place when the regulatory period 
begins September 20, 2004, and handlers need to consider their 
allotment and how best to service their customers; (2) the industry has 
been discussing this issue for some time, and the Committee has kept 
the industry well informed; (3) this action has been widely discussed 
at various industry and association meetings, and interested persons 
have had time to determine and express their positions; and (4) this 
rule provides a 30-day comment period and any comments received will be 
considered prior to finalization of this rule.

List of Subjects in 7 CFR Part 905

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

0
For the reasons set forth in the preamble, 7 CFR part 905 is amended as 
follows:

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

0
1. The authority citation for 7 CFR part 905 continues to read as 
follows:

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


Sec.  905.153  [Amended]

0
2. Section 905.153 is amended by:
0
A. In paragraph (a), revising ``five'' to read ``three'' in the first, 
second and third sentences.
0
B. In paragraph (a), revising ``165'' to read ``99'' in the second 
sentence.
0
C. In paragraph (d), removing the sentence ``Overshipments will not be 
allowed during week 22.'' and adding the sentence ``Overshipments will 
not be allowed during the last week of regulation.'' in its place.

    Dated: August 10, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-18608 Filed 8-13-04; 8:45 am]
BILLING CODE 3410-02-P