[Federal Register Volume 70, Number 245 (Thursday, December 22, 2005)]
[Proposed Rules]
[Pages 75984-75986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-24339]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 979

[Docket No. FV06-979-1 PR]


Melons Grown in South Texas; Proposed Termination of Marketing 
Order 979

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule proposes to terminate the Federal marketing order 
for melons grown in South Texas (order) and the rules and regulations 
issued thereunder. The order contains authority to regulate the 
handling of melons grown in South Texas and is administered locally by 
the South Texas Melon Committee (Committee). The Committee recommended 
terminating the order at a meeting on September 7, 2005. The Department 
of Agriculture (USDA) suspended regulations under the order while it 
considered the Committee's recommendation. This rule invites comments 
on proposed termination of the order.

DATES: Comments must be received by February 21, 2006.

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: moab. [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: 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 proposed rule is governed by section 
608c(16)(A) of the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act'', and 
Sec.  979.84 of the order.
    USDA is issuing this rule in conformance with Executive Order 
12866.
    This proposed termination of the order 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 proposes to terminate the Federal marketing order for 
melons grown in South Texas and the rules and regulations issued 
thereunder. The order contains authority to regulate the handling of 
melons grown in South Texas and is administered locally by the South 
Texas Melon Committee (Committee). At a meeting held on September 7, 
2005, the Committee recommended terminating the order. USDA suspended 
indefinitely regulations under the order while it considers the 
Committee's recommendation for termination (70 FR 57995; October 5, 
2005). This rule invites comments on proposed termination of the order.
    Section 979.84 of the order provides, in pertinent part, that the 
Secretary shall terminate or suspend any or all provisions of the order 
when he finds that it does not tend to effectuate the declared policy 
of the Act. Section 608c(16)(A) of the Act provides that the Secretary 
shall terminate or suspend the operation of any order whenever the 
order or provision thereof obstructs or does not tend to effectuate the 
declared policy of the Act. The Secretary must notify Congress not 
later than 60 days before the date the order would be terminated.
    The order has been in effect since 1979. It contains authority for 
grade, size, quality, maturity, pack, container, and reporting 
requirements. It also authorizes production research and marketing 
research and development activities. Grade, quality, maturity, 
container, and pack regulations have historically been utilized under 
the order, as well as mandatory inspection to ensure these requirements 
were met. Assessments have been collected to fund order operations, 
including production research and marketing research and promotion 
activities. Reporting requirements have also been implemented under the 
order.
    The South Texas melon industry has been shrinking in recent seasons 
due to the inability to provide a dependable supply of good quality 
fruit, a lack of success in developing new varieties of improved 
quality melons, and intense domestic and foreign competition. Acreage 
decreased from a high of 27,463 acres in 1987 to 4,780 acres in 2004. 
The number of producers and handlers has decreased significantly as 
well.
    Because of the declining status of the industry, on September 16, 
2004, the Committee recommended suspending all regulatory and reporting 
requirements and assessment collections under the order for the 2004-05 
season, except one reporting requirement regarding planted acreage. The 
suspension was recommended for one season with the hope that new

[[Page 75985]]

melon varieties may be developed to help revive the industry, and to 
provide a period of time to allow the Committee to evaluate whether it 
believed the marketing order should be continued. An interim final rule 
suspending the regulatory and reporting requirements and assessment 
collections for the 2004-05 season, except for one reporting 
requirement regarding planted acreage, was published in the Federal 
Register on November 26, 2004 (69 FR 68761), followed by a final rule 
published on February 23, 2005 (70 FR 8709). The 2004-05 season began 
on October 1, 2004, and ended on September 30, 2005.
    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 
by unanimous vote.
    USDA continued the suspension of regulations, reporting 
requirements, and assessment collections for an indefinite period, and 
also suspended the one remaining reporting requirement regarding 
planted acreage for an indefinite period to allow adequate time to 
collect additional information in order to determine if terminating the 
order is warranted. Suspension of regulations, reporting requirements, 
and assessment collections for an indefinite period was published in 
the Federal Register on October 5, 2005 (70 FR 57995). No comments were 
received as a result of that publication and a final rule was published 
in the Federal Register on December 7, 2005 (70 FR 72699). The rule 
continued to relieve handlers of regulatory requirements while USDA 
evaluated the Committee's recommendation for terminating the order.
    This proposed termination of the order is intended to solicit input 
and any additional information available from interested parties 
regarding whether the order should be terminated. USDA will evaluate 
all available information prior to making a final determination on this 
matter.

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.
    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 operations 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 2,364 
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.
    The South Texas cantaloupe and honeydew melon industry has been 
shrinking. South Texas historically had enjoyed a marketing window of 
approximately six weeks beginning about May 1 each season.That window 
has steadily eroded in recent years due to strong competition from 
other melon producing areas, and quality problems with Texas melons. As 
a result, acreage has decreased dramatically from a high of 27,463 
acres in 1987, to 4,780 in 2004, and 2,364 acres in 2005. The number of 
producers and handlers also has steadily declined.
    Because of the declining status of the industry, the Committee 
recommended suspending all regulatory and reporting requirements and 
assessment collections under the order for the 2004-05 season, except 
one reporting requirement regarding planted acreage. The suspension was 
recommended for one season with the hope that new melon varieties may 
be developed to help revive the industry, and to provide a period of 
time to allow the Committee to evaluate whether it believed the 
marketing order should be continued. An interim final rule suspending 
the regulatory and reporting requirements and assessment collections 
for the 2004-05 season, except for one reporting requirement regarding 
planted acreage, was published in the Federal Register on November 26, 
2004 (69 FR 68761), followed by a final rule published on February 23, 
2005 (70 FR 8709).
    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 payment of 
assessments. During the 2003-04 season, inspection costs associated 
with the order were estimated at $46,000 and assessments collected were 
$102,988. These costs were not incurred during the 2004-05

[[Page 75986]]

season as a result of the suspension of regulations and assessment 
obligations.
    The Committee met on September 7, 2005, to evaluate the industry 
situation since the regulations were suspended. As previously 
discussed, planted acreage continued to decline and the number of melon 
growers and handlers also continued to decline during the 2004-05 
season. 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 unanimously recommended its termination.
    Suspension of regulations, reporting requirements, and assessment 
collections was continued for an indefinite period, and the one 
remaining reporting requirement regarding planted acreage was also 
suspended indefinitely pursuant to publication in the Federal Register 
on October 5, 2005 (70 FR 57995). No comments were received as a result 
of that publication and a final rule was published in the Federal 
Register on December 7, 2005 (70 FR 72699). The rule continued to 
relieve handlers of regulatory requirements while USDA evaluated the 
Committee's recommendation for terminating the order.
    This proposal would reduce the regulatory burden on handlers under 
the marketing order. There are no other viable alternatives to this 
proposal.
    This proposed termination of the order is intended to solicit input 
and any additional information available from interested parties on 
whether the order should be terminated. USDA will evaluate all 
available information prior to making a final determination on this 
matter.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection requirements being 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 proposed rule would 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 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 the proposed termination of Marketing 
Order 979 covering melons grown in South Texas. All written comments 
timely received will be considered before a final determination is made 
on this matter.
    Based on the foregoing, and pursuant to Sec.  608c(16)(A) of the 
Act and Sec.  979.84 of the Order, USDA is considering termination of 
the order. If USDA decides to terminate the order, trustees would be 
appointed to conclude and liquidate the affairs of the Committee, and 
would continue in that capacity until discharged by USDA. In addition, 
USDA would notify Congress 60 days in advance of termination pursuant 
to Sec.  608c(16)(A) of the Act.

List of Subjects in 7 CFR Part 979

    Marketing agreements, Melons, Reporting and recordkeeping 
requirements.
    For the reasons set forth in the preamble, 7 CFR part 979 is 
proposed to be removed.

PART 979--[REMOVED]

    1. The authority citation for 7 CFR part 979 continues to read as 
follows:

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

     2. Accordingly, 7 CFR part 979 is removed.

    Dated: December 16, 2005.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 05-24339 Filed 12-21-05; 8:45 am]
BILLING CODE 3410-02-M