[Federal Register Volume 70, Number 234 (Wednesday, December 7, 2005)]
[Rules and Regulations]
[Pages 72699-72702]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-23707]



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 Rules and Regulations
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  Federal Register / Vol. 70, No. 234 / Wednesday, December 7, 2005 / 
Rules and Regulations  

[[Page 72699]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 979

[Docket No. FV05-979-2 FIR]


Melons Grown in South Texas; Continued Suspension of Handling and 
Assessment Collection Regulations

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 suspending the minimum 
grade, quality, maturity, container, pack, inspection, assessment 
collection, and other related requirements prescribed under the South 
Texas melon (cantaloupes and honeydews) marketing order (order). It 
also continues in effect a suspension of all reporting requirements 
under the order. The order regulates the handling of melons grown in 
South Texas and is administered locally by the South Texas Melon 
Committee (Committee). On September 7, 2005, the Committee recommended 
termination of the order. This rule continues to relieve handlers of 
regulatory requirements while the USDA evaluates the Committee's 
recommendation to terminate the order.

DATES: Effective January 6, 2006.

FOR FURTHER INFORMATION CONTACT: Martin J. Engeler, Senior Marketing 
Specialist, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, 2202 Monterey Street, Suite 102-B, Fresno, 
California 93721; telephone: (559) 487-5110, Fax: (559) 487-5906; or 
Kathleen M. Finn, Formal Rulemaking Team Leader, 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. 156 and Order No. 979 (7 CFR part 979), regulating the 
handling of melons grown in South Texas, hereinafter referred to as the 
``order.'' The order is effective under the Agricultural Marketing 
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter 
referred to as the ``Act.''
    USDA is issuing this rule in conformance with Executive Order 
12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. 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 indefinitely a suspension of the 
minimum grade, quality, maturity, container, pack, inspection, and 
other related requirements prescribed under the South Texas melon 
order. For the purposes of this rule, these requirements are referred 
to as handling requirements. It also continues in effect indefinitely a 
suspension of assessment collection and reporting requirements under 
the order. An interim final rule published in the Federal Register on 
November 26, 2004 (69 FR 68761), suspended these requirements for the 
2004-05 fiscal period to allow the South Texas melon industry to 
evaluate the need for the marketing order. A final rule was published 
in the Federal Register on February 23, 2005 (70 FR 8709). On September 
7, 2005, the Committee recommended termination of the order after a 
year of evaluation. An interim final rule was published in the Federal 
Register on October 5, 2005, (70 FR 57995) continuing indefinitely the 
suspension of all regulatory requirements under the order while USDA 
evaluates the Committee's recommendation to terminate the order.
    Section 979.52 of the order provides authority for grade, size, 
maturity, quality, and pack regulations for any variety of melons grown 
in the production area during any period. Section 979.52 also 
authorizes the modification, suspension, or termination of regulations 
issued under the order. Authority to terminate or suspend provisions of 
the order is specified in Sec.  979.84.
    Section 979.60 provides that whenever melons are regulated pursuant 
to Sec.  979.52, such melons must be inspected by the Federal-State 
Inspection Service, and certified as meeting the applicable 
requirements of such regulations. The cost of such inspection and 
certification is borne by handlers.
    Under the order, fresh market shipments of South Texas melons are 
required to be inspected and are subject to minimum grade, quality, 
maturity, and container and pack requirements. Section 979.304 Handling 
regulation (7 CFR part 979.304) specifies minimum grade and quality 
requirements for the handling of cantaloupes and honeydew melons. That 
section also specifies pack and container requirements for these 
commodities.
    Section 979.304 further includes a minimum quantity exemption of 
120 pounds per day, and reporting and safeguard requirements for 
special purpose and experimental shipments. Related provisions appear 
in the

[[Page 72700]]

regulations in Sec.  979.106 Registered handlers; Sec.  979.152 
Handling of culls; and Sec.  979.155 Safeguards.
    At its September 16, 2004, meeting, the Committee unanimously 
recommended suspending, for the 2004-2005 fiscal period, the handling, 
assessment collection, and all reporting requirements, except for the 
acreage planting reporting requirement. The 2004-05 fiscal period began 
October 1, 2004, and ended September 30, 2005.
    These requirements initially were suspended pursuant to a rule 
published in the Federal Register on November 26, 2004 (69 FR 68761). 
It was believed that the cost of inspection and certification and 
administering the order may exceed the benefits. The regulations were 
suspended for one fiscal year so the industry would have time to 
evaluate whether the order should be continued. Consistent with the 
suspension of Sec.  979.304, also suspended for the 2004-2005 fiscal 
year were Sec.  979.106, Sec.  979.152, and Sec.  979.155 of the rules 
and regulations in effect under the order. Section 979.106 provides for 
the registration of handlers, Sec.  979.152 details procedures for the 
handling of cull melons, and Sec.  979.155 provides safeguard 
requirements for special purpose shipments and establishes reporting 
and recordkeeping requirements when such exemptions are in place.
    In addition, Sec.  979.219 requiring that an assessment rate of 
$0.09 per carton of melons be collected from South Texas melon handlers 
was also suspended. Consistent with suspension of Sec.  979.219, Sec.  
979.112 specifying late payment charges on delinquent assessments was 
also suspended.
    The Committee met on September 7, 2005, to evaluate the industry 
situation since the regulations were suspended. Planted acreage 
continued to decline, from 4,780 acres in 2003-04 to 2,364 acres in 
2004-05. The number of melon growers and handlers also continued to 
decline. During the 2003-04 season, there were 29 growers and 16 
handlers; in 2004-05 the number of known growers decreased to 13 and 
handlers decreased to seven. In addition, no new varieties were 
introduced to improve the quality and make the product more competitive 
with product from other producing areas. In short, the industry 
situation continues to worsen. The Committee believes that there is no 
longer a need for the order, and therefore recommended its termination. 
USDA is evaluating the Committee's recommendation.
    The first suspension of regulations expired on September 30, 2005. 
The process to terminate a marketing order takes several months to 
complete; therefore, an interim final rule continuing indefinitely the 
suspension of regulations was issued in the Federal Register at 70 FR 
57995 on October 5, 2005. That interim final rule also suspended the 
one remaining reporting requirement in effect regarding planted 
acreage, as the Committee believes there is no need to incur any costs 
or gather additional data. This final rule continues in effect the 
suspension of all regulatory requirements under the order.

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.
    During the 2004-05 marketing year, there were approximately seven 
handlers of South Texas melons subject to regulation under the 
marketing order and approximately 13 melon growers in the regulated 
area. Small agricultural service firms are defined by the Small 
Business Administration (SBA) (13 CFR 121.201) as those having annual 
receipts of less than $6,000,000, and small agricultural growers are 
defined as those having annual receipts of less than $750,000.
    Most of the handlers are vertically integrated corporations 
involved in growing, shipping, and marketing melons. For the 2003-04 
marketing year, the industry's 16 handlers shipped melons produced on 
4,780 acres with the average and median volume handled being 89,012 and 
10,655 containers, respectively. In terms of production value, total 
revenue for the 16 handlers was estimated to be $12,175,919, with the 
average and median revenues being $760,996 and $91,094, respectively. 
Complete comparable data is not available for the 2004-05 marketing 
year, but based on a reduction of acreage from 4,780 acres in 2003-04 
to 1,364 acres in 2004-05, and the reduced number of growers and 
handlers, it follows that the volume handled and the value of 
production likely declined as well.
    The South Texas melon industry is characterized by growers and 
handlers whose farming operations generally involve more than one 
commodity, and whose income from farming operations is not exclusively 
dependent on the production of melons. Alternative crops provide an 
opportunity to utilize many of the same facilities and equipment not in 
use when the melon production season is complete. For this reason, 
typical melon growers and handlers either double-crop melons during 
other times of the year or produce alternative crops, like onions.
    Based on the SBA's definition of small entities, it is estimated 
that all of the seven handlers regulated by the order would be 
considered small entities if only their Spring melon revenues are 
considered. However, revenues from other productive enterprises might 
push a number of these handlers above the $6,000,000 annual receipt 
threshold. Of the 13 growers within the production area, few have 
sufficient acreage to generate sales in excess of $750,000; therefore, 
the majority of growers may be classified as small entities.
    At its September 16, 2004, meeting, the Committee unanimously 
recommended suspending, for the 2004-2005 fiscal period, the handling, 
assessment collection, and all reporting requirements, except for the 
acreage planting reporting requirement. The Committee requested that 
the rule be effective for the 2004-05 fiscal period, which began 
October 1, 2004, and ends September 30, 2005. A rule was published in 
the Federal Register on November 26, 2004, suspending these 
requirements for the specified period (69 FR 68762). A final rule was 
published in the Federal Register on February 23, 2005 (70 FR 8709).
    The objective of the handling and inspection requirements is to 
ensure that only acceptable quality cantaloupe and honeydew melons 
enter fresh market channels, thereby ensuring consumer satisfaction, 
increasing sales, and improving returns to growers. While the industry 
continues to believe that quality is an important factor in maintaining 
sales, the Committee believes that the cost of inspection and 
certification (mandated when minimum requirements are in effect) may 
exceed the benefits derived, especially in view of reduced melon 
acreage and yields in recent years.
    The South Texas cantaloupe and honeydew melon industry has been 
shrinking. South Texas historically had enjoyed a marketing window of

[[Page 72701]]

approximately six weeks beginning about May 1 each season. That window 
has steadily eroded in recent years due to strong competition and 
quality problems in Texas melons. As a result, acreage has decreased 
dramatically from a high of 27,463 acres in 1987, to 4,780 in 2004, and 
1,364 acres in 2005. The number of producers and handlers also has 
steadily declined.
    Underlying economics for the South Texas melon industry did not 
justify continuing the regulations for 2004-05. Too little assessment 
revenue could be generated for an effective marketing and promotion 
program, and buyer demands have superseded the regulations in dictating 
quality requirements.
    Suspending the regulations enabled handlers to ship melons without 
regard to the minimum grade, quality, maturity, container, pack, 
inspection, and related requirements for the 2004-05 fiscal period. It 
decreased industry expenses associated with inspection and assessments.
    In addition, this rule also suspended, for the 2004-05 marketing 
year, Sec.  979.219 requiring that an assessment rate of $0.09 per 
carton of melons be collected from South Texas melon handlers. 
Consistent with suspension of Sec.  979.219, Sec.  979.112 specifying 
late payment charges on delinquent assessments was also suspended. 
Authorization to assess melon handlers enables the Committee to incur 
expenses that are necessary to administer the marketing order.
    With the suspension of handling, inspection, and assessment 
requirements, a limited Committee budget was needed for program 
administration and collection of acreage planting reports. For the 
period of the suspension, the Committee recommended a reduced budget of 
$70,959 to cover anticipated expenses. Adequate funds to cover these 
expenses were provided from the Committee's reserves.
    The Committee anticipated that suspending the regulations would not 
negatively impact small businesses. The suspension applied to minimum 
grade, quality, maturity, container, pack, inspection, assessment 
collection, some reporting, and other related requirements. Further, 
this rule allowed handlers and growers the choice to obtain inspection 
for melons, as needed, thereby reducing costs for the industry. The 
total cost of inspection and certification for fresh shipments of South 
Texas melons during the 2003-04 marketing season was $46,000. These 
costs were not incurred during the 2004-2005 season.
    The suspension of the assessment collection requirements for the 
2004-05 season also resulted in some cost savings. Assessment 
collections during the 2003-04 season totaled $102,988. As a result of 
the suspension of Sec.  979.219, no assessments were collected during 
the 2004-05 season.
    At its September 16, 2004, meeting, the Committee considered 
suspension of the marketing order, but chose to continue receiving data 
on plantings for a one-year period before deciding whether the order 
should be continued.
    The Committee met on September 7, 2005, to evaluate the industry 
situation since the regulations were suspended. Planted acreage 
continued to decline, from 4,780 acres in 2003-04 to 2,364 acres in 
2004-05. The number of melon growers and handlers also continued to 
decline. During the 2003-04 season, there were 29 growers and 16 
handlers; in 2004-05 the numbers decreased to 13 and seven, 
respectively. In addition, no new varieties were introduced to improve 
the quality and make South Texas melons more competitive with other 
producing areas.
    The Committee believes that there is no longer a need for the 
order, and therefore recommended its termination. USDA is evaluating 
the Committee's recommendation. The first suspension of regulations 
expired on September 30, 2005. A subsequent interim final rule was 
published in the Federal Register on October 5, 2005, (70 FR 57995) 
suspending all regulatory requirements under the order, including the 
one remaining reporting requirement in effect. This final rule 
continues in effect the suspension of all regulatory requirements 
indefinitely as USDA evaluates the Committee's recommendation to 
terminate the order.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection requirements continuing to be 
suspended by this rule were approved previously by the Office of 
Management and Budget (OMB) and assigned OMB No. 0581-0178, Vegetable 
and Specialty Crops. Suspension of all the reporting requirements under 
the order is expected to reduce the reporting burden on small or large 
South Texas melon handlers by 24.90 hours, and should further reduce 
industry expenses. Handlers are no longer required to file any forms 
with the Committee. This rule will, thus, not impose any additional 
reporting or recordkeeping requirements on either small or large melon 
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, USDA has not identified any relevant Federal rules 
that duplicate, overlap or conflict with this rule.
    Further, the Committee's meeting was widely publicized throughout 
the melon industry and all interested persons were invited to attend 
the meeting and participate in Committee deliberations. Like all 
Committee meetings, the September 16, 2004, meeting and the September 
7, 2005 meeting were public meetings and all entities, both large and 
small, were able to express their views on this issue. Finally, 
interested persons were invited to submit information on the regulatory 
and informational impacts of this action on small businesses. No 
comments were received.
    An interim final rule concerning this action was published in the 
Federal Register on October 5, 2005. Copies of the rule were mailed by 
the Committee's staff to all Committee members and melon handlers. In 
addition, the rule was made available through the Internet by the USDA 
and the Office of the Federal Register. That rule provided for a 30-day 
comment period which ended November 4, 2005. 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 
the regulations suspended in this final rule, which adopts, without 
change, the interim final rule, as published in the Federal Register 
(70 FR 57995) no longer tend to effectuate the declared policy of the 
Act.

List of Subjects in 7 CFR Part 979

    Marketing agreements, Melons, Reporting and recordkeeping 
requirements.

PART 979--MELONS GROWN IN SOUTH TEXAS

0
Accordingly, the interim final rule amending 7 CFR Part 979 which was 
published at 70 FR 57995 on October 5, 2005, is adopted as a final rule 
without change.


[[Page 72702]]


    Dated: December 1, 2005.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 05-23707 Filed 12-6-05; 8:45 am]
BILLING CODE 3410-02-P