[Federal Register Volume 70, Number 121 (Friday, June 24, 2005)]
[Rules and Regulations]
[Pages 36467-36470]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-12616]



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  Federal Register / Vol. 70, No. 121 / Friday, June 24, 2005 / Rules 
and Regulations  

[[Page 36467]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 915

[Docket No. FV05-915-2 IFR]


Avocados Grown in South Florida; Changes in Container and 
Reporting Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule changes the container and reporting requirements 
currently prescribed under the marketing order for avocados grown in 
South Florida. The marketing order regulates the handling of avocados 
grown in South Florida and is administered locally by the Avocado 
Administrative Committee (Committee). This rule prohibits the handling 
of fresh market avocados in 20 bushel plastic field bins to 
destinations inside the production area. This rule also requires 
handlers to provide, at the time of inspection, information regarding 
the number of avocados packed per container (count per container). 
These changes are expected to help reduce packing costs and facilitate 
the distribution of useful marketing information.

DATES: Effective June 25, 2005; comments received by August 23, 2005 
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: William G. Pimental, Marketing 
Specialist, 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. 121 and Marketing Order No. 915, both as amended (7 CFR 
part 915), regulating the handling of avocados grown in South 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 prohibits the handling of fresh market avocados in 20 
bushel plastic field bins to destinations inside the production area. 
This rule also requires handlers to provide, at the time of inspection, 
information regarding the avocado count per container, which will, in 
turn, provide the Committee and the industry with information regarding 
the sizes of avocados packed. These changes are expected to decrease 
packing costs by reducing the annual loss of field bins and provide 
handlers with additional marketing information. The Committee 
unanimously recommended these changes at meetings held on September 8, 
2004, and November 10, 2004.
    Section 915.51(4) of the order provides authority for establishing 
container requirements for the handling of avocados. Section 915.51(6) 
of the order provides that any or all requirements effective pursuant 
to Sec.  915.51(4) shall be different for the handling of avocados 
within the production area and outside the production area. Section 
915.305 of the order's rules and regulations specifies the avocado 
container requirements.
    Section 915.60 of the order provides authority for the Committee to 
require handlers to file reports and provide other information as may 
be necessary for the Committee to perform its duties. Section 915.150 
specifies the requisite reporting requirements.
    This rule amends Sec.  915.305 by adding a prohibition to the 
handling of fresh market avocados in 20 bushel plastic field bins to 
all destinations within the regulated production area. This rule also 
amends Sec.  915.150 by adding a requirement that handlers provide

[[Page 36468]]

additional pack information at the time of inspection.
    Currently, there are no specific container net weight or dimension 
requirements for avocados handled to destinations within the production 
area. However, shipments of avocados within the production area must 
meet maturity requirements and be inspected.
    Prior to this action, 20 bushel plastic field bins (bins) were 
commonly being used for the purpose of moving avocados into the current 
of commerce within the production area (handling). Following the 
successful inspection of avocados packed in bins, the inspector would 
place a cardboard cover over the top of the bin and seal it with 
official Federal-State Inspection Service tape. The bins could then be 
transported and sold at the various markets throughout the production 
area. It should be noted that current container regulations do not 
authorize the use of field bins for shipments of avocados from within 
the production area to any point outside of the production area.
    At the September 8, 2004, meeting, Committee members raised the 
issue that, each year, a large number of bins are apparently 
misappropriated during the avocado season. Committee consensus is that 
the ongoing loss of the bins has been costly to the industry, with the 
average cost of a bin about $150 each. By Committee estimates, over 700 
bins were lost during the previous season at a cost of over $100,000 to 
the bins' owners.
    In the harvesting of avocados, field bins have the primary function 
of transporting avocados from grove to packing facility. These bins are 
usually owned by individual packinghouses, or handlers, and are either 
delivered to, or picked up at, the packing facility by the harvester. 
Handlers have found that, much too often, field bins are not returned 
to the proper packinghouse, but are instead apparently misappropriated 
and used for other purposes. Because of their durability, many of the 
bins are acquired and reused by small cash handlers to pack and 
transport fruit in the production area. Often these bins are then 
abandoned at various market locations throughout the production area.
    Once the bins are transported to different market locations 
throughout the production area, they become very difficult to recover. 
The avocado groves and packinghouses are situated around the Homestead, 
Florida area. However, the production area stretches into Central 
Florida. Consequently, bins often end up in locations over 100 miles 
away in cities such as Tampa and Orlando. Once the avocados have been 
marketed, the bins are purportedly used for many different purposes and 
may be dispersed even further from the originating packinghouse. 
Handlers are thus provided very little chance of recovering them for 
their own use.
    The Committee believes that once bins are no longer authorized for 
use as containers for inspection, transportation, and sale of fresh 
avocados to markets within the production area, the movement of these 
containers will be limited, thus helping to reduce the number of lost 
bins. Cash handlers--generally handlers without packing facilities that 
tend to buy bulk avocados directly from the growers--will have to use 
different containers to pack and transport avocados within the 
production area. Committee members suggested that one such option could 
be a commonly available 20 bushel field bin constructed of cardboard 
rather than plastic, but at a much lower cost of about $10 each.
    The Committee believes this change will help to restrict the use of 
the expensive plastic field bins to their originally intended purpose 
as a method of conveyance of avocados from grove to packinghouse. 
Prohibiting the use of these bins for the purpose of handling fresh 
market avocados will help prevent them from being transported to 
locations far from the originating packinghouse. This, in turn, will 
result in the majority of the bins remaining in the local area where 
they are much more easily recovered. Reducing the number of lost bins 
represents a significant potential cost savings for the industry. 
Therefore, the Committee voted unanimously to put this regulation in 
place.
    This rule also revises the reporting requirements under the order. 
Handlers are currently reporting to the inspector at the time of 
inspection the number of \1/4\ bushel, \1/2\ bushel, and \4/5\ bushel 
containers packed. This rule will not only require that handlers 
continue to provide the number and sizes of containers packed, but in 
addition, will require handlers to provide information regarding the 
number of avocados packed per type of container, or ``count per 
container.'' Knowing the actual number of avocados packed per 
container, in addition to the number and size of containers packed, the 
Committee and the industry will be armed with information regarding the 
various sizes of avocados being packed, as well as the quantity of 
different sizes being marketed. For example, a handler might report to 
the inspector on duty that the current lot being inspected has 500 \1/
4\ bushel containers, 6 count each. This type of information would 
provide the Committee with information regarding the quantity of large 
avocados being packed.
    Prior to this change, no data was collected that provided 
information on the various sizes of avocados being packed. During the 
Committee's discussion of this issue, handlers agreed that although 
they were getting information regarding the number of bushels packed, 
it would be valuable to have information regarding the volume of small, 
medium, and large avocados packed for market. The Committee believes 
the availability of such information will help both grower and handler 
when making harvesting and packing decisions.
    Committee members agreed having information to help determine if 
any sizes are overrepresented or underrepresented in the marketplace 
would be valuable when planning and making marketing decisions. There 
is a close correlation between size and price. An oversupply of one 
size of fruit can negatively impact the price for that size and all 
sizes. By reporting count per container, the industry will be better 
able to gauge available markets by knowing the volume of what sizes are 
available.
    An avocado will never reach full maturity unless it is severed from 
the tree. Consequently, harvest can be delayed without affecting the 
flavor or the quality of the fruit. This fact, in combination with 
information on sizes, allows the industry to make harvesting and 
marketing decisions based on available markets.
    Without good information regarding the sizes available in the 
market, the market pipelines for certain sizes can become full, driving 
prices down. Having access to this information will help the industry 
better balance supply with demand. By knowing which sizes are in short 
supply, the industry can determine which sizes need to be harvested. 
Such information may help reduce periods of oversupply and the effect 
oversupply has on price, providing the industry with another tool to 
more efficiently market avocados and maximize industry returns.
    Previously, at the time of inspection, handlers have been commonly 
reporting container size and quantity to the inspector, who then 
includes this information on the inspection certificates. Inspection 
certificates are then provided to the Committee, which compiles the 
information into reports that are in turn provided to the avocado 
industry. Committee members believe this procedure has been working 
effectively, and that having handlers report the count per container in 
the

[[Page 36469]]

same fashion will be equally effective. In most cases, this is 
information the handler already has available, and thus needs only to 
supply it to the inspector at the time of inspection. As with the 
current report, the Committee will compile the data received and report 
it to the industry on a composite basis to aid growers and handlers in 
planning their individual operations and in making marketing decisions 
during the season.
    This change will provide the industry with an indication of the 
volume of small, medium, and large sized avocados being shipped to the 
fresh market. With this change, handlers believe they will have more 
information on which to base their harvesting and marketing decisions. 
Consequently, the Committee voted unanimously to make this change.
    Section 8e of the Act provides that when certain domestically 
produced commodities, including avocados, are regulated under a Federal 
marketing order, imports of that commodity must meet the same or 
comparable grade, size, quality, and maturity requirements. As this 
rule changes the container and reporting requirements under the 
domestic handling regulations, no corresponding changes to the import 
regulations are required.

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 150 producers of avocados in the production 
area and approximately 35 handlers subject to regulation under the 
order. Small agricultural producers are defined by the Small Business 
Administration (SBA) as those having annual receipts of less than 
$750,000, and small agricultural service firms are defined as those 
whose annual receipts are less than $6,000,000 (13 CFR 121.201).
    According to the National Agricultural Statistics Service and 
Committee data, the average price for Florida avocados during the 2003-
04 season was around $22.22 per 55-pound bushel container, and total 
shipments were near 660,000 55-pound bushel equivalents. Approximately 
11 percent of all handlers handled 76 percent of Florida avocado 
shipments. Using the average price and shipment information provided by 
the Committee, nearly all avocado handlers could be considered small 
businesses under the SBA definition. In addition, based on avocado 
production, grower prices, and the total number of Florida avocado 
growers, the average annual grower revenue is approximately $98,000. 
Thus, the majority of Florida avocado producers may also be classified 
as small entities.
    This rule changes the container and reporting requirements 
currently prescribed under the order. This rule prohibits the handling 
of fresh market avocados in 20 bushel plastic field bins to 
destinations within the production area. This rule also requires 
handlers to provide information regarding the avocado count per 
container, which in turn provides the Committee and the avocado 
industry with an indication of the sizes of avocados being packed. 
These changes are expected to decrease packing costs by reducing losses 
of field bins and to provide handlers with additional information on 
which to base their harvesting and marketing decisions. The Committee 
unanimously recommended these changes at meetings held on September 8, 
2004, and November 10, 2004. This rule modifies the container and 
reporting requirements specified in Sec. Sec.  915.305 and 915.150 
respectively. The authorities for these actions are provided for in 
Sec. Sec.  915.51 and 915.60.
    It is not anticipated that this rule will generate any increased 
costs for handlers or producers. The Committee recommended the change 
in the container requirements in an effort to reduce the costs stemming 
from the misappropriation of bins. According to estimates, more than 
700 bins were lost last season, at a cost to the industry of around 
$100,000. The primary purpose of these field bins is to provide bulk 
conveyance of harvested avocados from the groves to the packinghouses. 
However, a segment of the industry has been using them to pack and 
transport avocados to markets within the production area. Handlers have 
found that bins have been misappropriated, used for the handling of 
avocados for sale within the production area, and not subsequently 
returned to the rightful owner. With a prohibition on the use of the 
plastic bins in the handling of avocados to points within the 
production area, the Committee hopes to break this cycle and move those 
who prefer this size container to a lower cost alternative. While an 
alternative cardboard container that holds an equivalent volume costs 
only about $10, an individual plastic bin costs around $150. This 
change should result in a cost savings.
    By requiring handlers to supply information on the count per 
container at the time of inspection, the industry will have access to 
additional shipment information. There is little or no cost associated 
with this action, as most handlers have this information readily 
available and will be supplying it along with information already 
provided. However, the industry will be able to use this data when 
making harvesting and marketing decisions. As previously noted, there 
currently is no reliable information widely available regarding the 
sizes of avocados in the channels of commerce. Without good information 
regarding the sizes available in the market, handlers have no way to 
tell whether a certain size is overly available or in short supply. 
Having access to this information will help the industry more 
efficiently balance supply with demand, thus reducing periods of 
oversupply and price variations, while providing the industry with 
another tool to better market its fruit, serve customers, and maximize 
returns.
    This rule will have a positive impact on affected entities. The 
changes were recommended to reduce costs and improve available industry 
information. The reduction in costs associated with lost bins is 
expected to benefit all handlers regardless of size. The availability 
of more timely and accurate industry information will also benefit both 
large and small handling operations. Consequently, the opportunities 
and benefits of this rule are expected to be equally available to all.
    An alternative to the actions recommended by the Committee was 
considered prior to making the final recommendations. The alternative 
considered was requesting the count per container from handlers on a 
voluntary basis. However, by requiring the information under authority 
of the order, all handlers will be required to participate, which will 
mean more accurate reporting and information. Therefore, this 
alternative was rejected.
    This rule will require small and large avocado handlers to provide 
some additional information at the time of inspection. However, 
handlers have access to this information and are already providing 
other information at the time of inspection. This action

[[Page 36470]]

requires no additional forms. The information will be recorded by the 
inspector on the inspection certificate.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), AMS has received OMB approval for the information 
collection requirements for this marketing order program. These 
requirements are approved under the Fruit Crops collection package, OMB 
No. 0581-0189 OMB. The reporting modifications made by this rule are 
small and will have no impact on the overall total burden hours 
approved by OMB.
    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 meetings were widely publicized throughout 
the avocado industry and all interested persons were invited to attend 
and participate in Committee deliberations. Like all Committee 
meetings, the September 8, 2004, and November 10, 2004, meetings were 
public meetings and all entities, both large and small, were able to 
express their views on these issues. 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 changes to the container and 
reporting requirements currently prescribed under the Florida avocado 
marketing order. Any comments received will be considered prior to 
finalization of this rule.
    After consideration of all relevant material presented, including 
the Committee's recommendations, 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) The Committee unanimously recommended these changes at 
public meetings and interested parties had an opportunity to provide 
input; (2) growers and handlers are aware of these changes; (3) the 
Florida avocado shipping season started May 16, 2005; and (4) this rule 
provides a 60-day comment period and any comments received will be 
considered prior to finalization of this rule.

List of Subjects in 7 CFR Part 915

    Avocados, Marketing agreements, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, 7 CFR part 915 is amended as 
follows:

PART 915--AVOCADOS GROWN IN SOUTH FLORIDA

0
1. The authority citation for 7 CFR part 915 continues to read as 
follows:

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

0
2. Section 915.150 is amended by adding paragraph (e) to read as 
follows:


Sec.  915.150  Reports.

* * * * *
    (e) At the time of inspection, each handler shall provide to the 
Federal-State Inspection Service the quantity and size of containers 
being packed and inspected for the fresh avocado market. In addition, 
each handler shall provide the number of avocados packed per container 
(count per container).

0
3. Section 915.305 is amended by adding paragraph (c) to read as 
follows:


Sec.  915.305  Florida Avocado Container Regulation 5.

* * * * *
    (c) No handler shall handle any avocados for the fresh market in 20 
bushel plastic field bins to destinations inside the production area.

    Dated: June 20, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-12616 Filed 6-21-05; 3:37 pm]
BILLING CODE 3410-02-P