[Federal Register Volume 71, Number 110 (Thursday, June 8, 2006)]
[Rules and Regulations]
[Pages 33178-33181]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-8895]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 979

[Docket No. FV06-979-1 FR]


Melons Grown in South Texas; Termination of Marketing Order 979

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule, termination of order.

-----------------------------------------------------------------------

SUMMARY: This final rule terminates the Federal marketing order for 
melons grown in South Texas (order) and the rules and regulations 
issued thereunder. The Department of Agriculture (USDA) has determined 
the order should be terminated given the declining status of the 
industry.

DATES: Effective Date: June 9, 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 action is being taken pursuant to Sec.  
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 final 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 terminates 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.

[[Page 33179]]

USDA suspended indefinitely regulations under the order while it 
considered the Committee's recommendation for termination (70 FR 57995; 
October 5, 2005). USDA issued a proposed rule soliciting comments on 
proposed termination of the order on December 22, 2005 (70 FR 75984).
    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. Section 608c(16)(A) of the Act also 
requires the Secretary to 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 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 continued to worsen. The Committee believed that there was 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 was 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.
    In order to solicit input from interested parties regarding 
termination of the order, USDA issued a proposed termination order on 
December 22, 2005 (70 FR 75984). A 60-day comment period was provided 
to allow interested parties the opportunity to comment. No comments 
were received.
    Pursuant to section 8c(16)(A) of the Act and Sec.  979.84 of the 
order, USDA has determined that the order and all of its provisions 
should be terminated due to the declining status of the industry and 
lack of industry support for the program. Section 8c(16)(A) of the Act 
requires USDA to notify Congress at least 60 days before terminating a 
Federal marketing order program. Congress was so notified on March 16, 
2006. USDA hereby appoints Committee Chairman Fred Schuster and 
Committee member Jimmy Pawlick as trustees to conclude and liquidate 
the affairs of the Committee and to continue in such capacity until 
discharged.

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 $6,500,000, 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

[[Page 33180]]

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 $6,500,000 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 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 believed that there was 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.
    In order to solicit input from interested parties regarding 
termination of the order, USDA issued a proposed termination order on 
December 22, 2005 (70 FR 75984). A 60-day comment period was provided 
to allow interested parties the opportunity to comment. No comments 
were received. After evaluating all available information, USDA has 
determined that the order should be terminated.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection requirements being terminated 
by this rule were approved previously by the Office of Management and 
Budget (OMB) and assigned OMB No. 0581-0178, Vegetable and Specialty 
Crops. Termination 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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this rule.
    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.
    A proposed rule inviting comments on the proposed termination of 
Marketing Order 979 covering melons grown in South Texas was published 
in the Federal Register on December 22, 2005 (70 FR 75984). Copies of 
the rule were mailed by the Committee's staff to handlers and growers. 
In addition, the rule was made available through the Internet by the 
USDA and the Office of the Federal Register. The rule provided a 60-day 
comment period which ended on February 21, 2006. No comments were 
received.
    As previously discussed, the South Texas melon industry has 
continually declined. Currently, there are 7 handlers, 13 growers, and 
a relatively small 2,364 acres. Further, the Committee recommended 
unanimously to terminate the program, and no comments were received 
concerning the proposed termination published in the Federal Register. 
Based on the foregoing, and pursuant to Sec.  608c(16)(A) of the Act 
and Sec.  979.84 of the order, it is hereby found that Federal 
marketing order 979 covering melons produced in South Texas does not 
tend to effectuate the declared policy of the Act, and is therefore 
terminated.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553 because: (1) This action relieves 
restrictions on handlers by terminating the requirements of the Texas 
melon marketing order; (2) regulations under the order have been 
suspended for the past two crop years; (3) the Committee unanimously 
recommended termination, and all handlers and growers in the industry 
have been notified and have been provided the opportunity to comment; 
and (4) no useful purpose would be served by delaying the effective 
date.

List of Subjects in 7 CFR Part 979

    Marketing agreements, Melons, Reporting and recordkeeping 
requirements.

[[Page 33181]]

PART 979--[REMOVED]

0
For the reasons set forth in the preamble, and under the authority of 7 
U.S.C. 601-674, 7 CFR part 979 is removed.

    Dated: June 2, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
 [FR Doc. E6-8895 Filed 6-7-06; 8:45 am]
BILLING CODE 3410-02-P