[Federal Register Volume 69, Number 235 (Wednesday, December 8, 2004)]
[Rules and Regulations]
[Pages 70874-70877]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-26861]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 905

[Docket No. FV04-905-5 FIR]


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

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 that changed 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 continues in effect changes in the way a 
handler's average week is calculated when quantities of small red 
seedless grapefruit are regulated and changes the provisions governing 
overshipments. This action makes the regulation more responsive to 
industry needs and better allocates base quantities.

DATES: Effective January 7, 2005.

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 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.''
    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 continues in effect changes in the procedures used to 
limit the volume of sizes 48 and 56 red seedless

[[Page 70875]]

grapefruit entering the fresh market. 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. This action 
also changes the 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.
    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. With this change, this section defines the prior period 
required by Sec.  905.52 as an average week within the immediately 
preceding three 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 the final regulatory week.
    This rule amends Sec.  905.153 by revising the definition of prior 
period and the language governing overshipments. This rule continues in 
effect changes in the number of preceding seasons used to calculate a 
handler's average week from five preceding seasons to three preceding 
seasons. This rule also continues in effect changes in the provisions 
regarding overshipments 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 initially 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.
    Prior to this change, an average week was 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 was divided by five to establish an average season. 
The average season was 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 better reflects changes in the industry, 
and better allocates the base quantities for all handlers of red 
seedless grapefruit.
    The Committee further believes that the use of a three-season 
average is more responsive in reallocating base than a 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 reduces 
the need for loans and transfers by shifting additional base to those 
with increasing shipments. 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 benefits 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. Prior to this change, the rules and

[[Page 70876]]

regulations specified that overshipments were 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.

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 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 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 continues in effect revisions to 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 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 rule 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.
    In addition, as noted in the initial regulatory flexibility 
analysis, 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).
    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 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.
    An interim final rule concerning this action was published in the 
Federal Register on August 16, 2004. Copies of the rule were mailed or 
sent via facsimile to all Committee members and grapefruit growers and 
handlers. In addition, the rule was made available through the internet 
by USDA and the Office of the Federal Register. That rule provided for 
a 30-day comment period,

[[Page 70877]]

which ended September 15, 2004. No comments were 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 material presented, including 
the Committee's recommendation, and other information, it is found that 
finalizing the interim final rule, without change, as published in the 
Federal Register, (69 FR 50275, August 16, 2004) will tend to 
effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 905

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

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

0
Accordingly, the interim final rule amending 7 CFR part 905 which was 
published at 69 FR 50275 on August 16, 2004, is adopted as a final rule 
without change.

    Dated: December 2, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-26861 Filed 12-7-04; 8:45 am]
BILLING CODE 3410-02-P