[Federal Register Volume 70, Number 197 (Thursday, October 13, 2005)]
[Rules and Regulations]
[Pages 59622-59625]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-20472]



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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 915

[Docket No. FV05-915-2 FIR]


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

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 container 
and reporting requirements 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 
continues in effect the action prohibiting the handling of fresh market 
avocados in 20 bushel plastic field bins to destinations inside the 
production area. This rule also continues in effect the action 
requiring that handlers 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 date: November 14, 2005.

FOR FURTHER INFORMATION CONTACT: William G. Pimental, Marketing 
Specialist, Southeast Marketing Field Office, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA; 
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.''
    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 an action prohibiting the handling of 
fresh market avocados in 20 bushel plastic field bins to destinations 
inside the production area. This rule also continues in effect the 
requirement that handlers provide, at the time of inspection, 
information regarding the avocado count per container, which provides 
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 
additional pack information at the time of inspection.
    There were no specific container net weight or dimension 
requirements for avocados handled to destinations within the production 
area before this rule. 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,

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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, 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--now 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 helps prevent them from being transported to locations 
far from the originating packinghouse. This, in turn, results 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 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 not only requires that handlers continue to provide the 
number and sizes of containers packed, but in addition, requires 
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 are 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 helps 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 is 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 were commonly 
reporting container size and quantity to the inspector, who then 
included this information on the inspection certificates. Inspection 
certificates were then provided to the Committee, which compiled the 
information into reports that were 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 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 
previous report, the Committee is compiling the data received and 
reporting 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 provides 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 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.

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

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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 continues in effect the 
action prohibiting the handling of fresh market avocados in 20 bushel 
plastic field bins to destinations within the production area. This 
rule also continues in effect the action requiring 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 has access to 
additional shipment information. There is little or no cost associated 
with this action, as most handlers have this information readily 
available and are supplying it along with information already provided. 
However, the industry can use this data when making harvesting and 
marketing decisions. As previously noted, there previously was 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 had no way to tell whether a 
certain size was 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 also benefits 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 are required to participate, which means 
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 requires no 
additional forms. The information is 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.
    AMS is committed to compliance with the Government Paperwork 
Elimination Act (GPEA), which requires Government agencies in general 
to provide the public the option of submitting information or 
transacting business electronically to the maximum extent possible.
    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.
    An interim final rule concerning this action was published in the 
Federal Register on June 24, 2005. Copies of the rule were mailed by 
the Committee's staff to all Committee members and avocado handlers. In 
addition, the rule

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was made available through the Internet by USDA and the Office of the 
Federal Register. That rule provided for a 60-day comment period which 
ended August 23, 2005. One response was received. However, it was not 
relevant to this rulemaking action. Therefore, no changes will be made 
as a result of this response.
    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 recommendations, and other information, it is found 
that finalizing this interim final rule, without change, as published 
in the Federal Register (70 FR 36467, June 24, 2005) will tend to 
effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 915

    Avocados, Marketing agreements, Reporting and recordkeeping 
requirements.

PART 915--AVOCADOS GROWN IN SOUTH FLORIDA

0
Accordingly, the interim final rule amending 7 CFR part 915 which was 
published at 70 FR 36467 on June 24, 2005, is adopted as a final rule 
without change.

    Dated: October 6, 2005.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 05-20472 Filed 10-12-05; 8:45 am]
BILLING CODE 3410-02-P