[Federal Register Volume 71, Number 125 (Thursday, June 29, 2006)]
[Proposed Rules]
[Pages 37016-37018]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-5832]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 980

[Docket No. FV06-980-1 PR]


Vegetables, Import Regulations; Partial Exemption to the Minimum 
Grade Requirements for Fresh Tomatoes

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule invites comments on a proposed partial exemption to 
the minimum grade requirements under the tomato import regulation. The 
import regulation is authorized under section 8e of the Agricultural 
Marketing Agreement Act of 1937 (Act). Section 8e requires imported 
tomatoes to meet the same or comparable grade and size requirements as 
those in effect under Federal Marketing Order No. 966 (order). The 
order regulates the handling of tomatoes grown in Florida. A separate 
proposed rule to amend the rules and regulations under the order to 
exempt UglyRipe (UglyRipe) tomatoes from the shape requirements 
associated with the U.S. No. 2 grade is being issued by Department of 
Agriculture (USDA). This rule would provide the same partial exemption 
under the import regulation so it would conform to the regulations for 
Florida tomatoes under the order.

[[Page 37017]]


DATES: Comments must be received by August 28, 2006.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. 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 Pimental or Christian Nissen, 
Southeast Marketing Field Office, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA; telephone: (863) 324-
3375, Fax: (863) 325-8793; e-mail: [email protected] or 
[email protected].
    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 issued under section 
8e of the Agricultural Marketing Agreement Act of 1937, as amended (7 
U.S.C. 601-674), hereinafter referred to as the ``Act,'' which provides 
that whenever certain specified commodities, including tomatoes, are 
regulated under a Federal marketing order, imports of these commodities 
into the United States are prohibited unless they meet the same or 
comparable grade, size, quality, or maturity requirements as those in 
effect for the domestically produced commodity.
    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.
    There are no administrative procedures which must be exhausted 
prior to any judicial challenge to the provisions of import regulations 
issued under section 8e of the Act.
    This proposed rule would provide a partial exemption to the minimum 
grade requirements for UglyRipe tomatoes imported into the United 
States. The import requirements for tomatoes specify that tomatoes must 
meet at least a U.S. No. 2 grade. A proposed rule to amend the rules 
and regulations under the order to exempt UglyRipe tomatoes from the 
shape requirements associated with the U.S. No. 2 grade is being issued 
separately by USDA. This rule would provide the same partial exemption 
under the import regulation so it would conform to the regulations for 
Florida tomatoes under the order.
    The order provides the authority for the establishment of grade 
requirements for Florida tomatoes. Section 966.323 of the order 
specifies, in part, the minimum grade requirements for tomatoes grown 
in Florida. The current minimum grade requirement for Florida tomatoes 
is a U.S. No. 2. The specifics of this grade requirement are listed 
under the U.S. Standards for Grades of Fresh Tomatoes (7 CFR 51.1855-
51.1877).
    The U.S. Standards for Grades of Fresh Tomatoes (Standards) specify 
the criteria tomatoes must meet to grade a U.S. No. 2, including that 
they must be reasonably well formed, and not more than slightly rough. 
These two factors relate specifically to the shape of the tomato. The 
definitions section of the Standards defines reasonably well formed as 
not decidedly kidney shaped, lopsided, elongated, angular, or otherwise 
decidedly deformed. The term slightly rough means that the tomato is 
not decidedly ridged or grooved.
    UglyRipe tomatoes are a trademarked tomato variety bred to look and 
taste like an heirloom-type tomato. One of the characteristics of this 
variety is its appearance. UglyRipe tomatoes are often shaped 
differently from other round tomatoes. Depending on the time of year 
and the weather, UglyRipe tomatoes are concave on the stem end with 
deep, ridged shoulders. They can also appear kidney shaped and 
lopsided. Because of this variance in shape and appearance, UglyRipe 
tomatoes can have difficulty meeting the shape requirements of the U.S. 
No. 2 grade.
    This rule would provide UglyRipe tomatoes with a partial exemption 
from the grade requirements under the import regulation. UglyRipe 
tomatoes would only be exempt from the shape requirements of the grade 
and would still be required to meet all other aspects of the U.S. No. 2 
grade. The UglyRipe tomato also continues to be required to meet all 
other requirements under the import regulation, such as size and 
inspection.
    Prior to the 1998-99 season, the Florida Tomato Committee 
(Committee), which locally administers the order, recommended that the 
minimum grade be increased from a U.S. No. 3 to a U.S. No. 2. A 
conforming change was also made to the import regulation. Some 
Committee members have stated that a large part of the volume of the 
standard commercial varieties of tomatoes which fail to make the grade 
are rejected because of their shape and appearance. Consequently, there 
was some industry concern that providing an exemption for the UglyRipe 
tomato could result in the shipment of U.S. No. 3 grade tomatoes of 
other varieties, contrary to the objectives of the exemption and the 
order.
    To address this concern, the producers of UglyRipe tomatoes pursued 
entry into USDA's Identity Preservation (IP) program. This program was 
developed by the Agricultural Marketing Service to assist companies in 
marketing products having unique traits. The program provides 
independent, third-party verification of the segregation of a company's 
unique product at every stage, from seed, production and processing, to 
distribution. The UglyRipe tomato was granted positive program status 
in early 2006.
    This partial exemption would only extend to UglyRipe tomatoes 
covered under the IP program. As such, this should help ensure that 
only UglyRipe tomatoes would be shipped under the proposed exemption. 
In addition, this exemption would be contingent upon imported UglyRipe 
tomatoes continuing to meet the specific requirements related to 
imports established under the IP program.
    This proposed rule would exempt imported UglyRipe tomatoes from the 
shape requirements associated with the U.S. No. 2 grade. This change 
would increase the volume of UglyRipe tomatoes that would meet order 
requirements, and would help increase shipments and availability of 
these tomatoes.
    This rule would bring the tomatoes import regulation into 
conformity with the proposed changes to the domestic order making the 
import requirements correspond to the domestic requirements under the 
order by amending 7 CFR 980.212 of the import requirements.

[[Page 37018]]

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 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. Import regulations issued under 
the Act are based on those established under Federal marketing orders.
    There are approximately 225 importers of tomatoes subject to the 
regulation. Small agricultural service firms, which include tomato 
importers, are defined by the Small Business Administration (SBA) as 
those having annual receipts of less than $6,500,000 (13 CFR 121.201). 
Based on information from the Foreign Agricultural Service, USDA, the 
dollar value of imported tomatoes ranged from around $1.05 billion in 
2003 to $1.08 billion in 2005. Using these numbers, the majority of 
tomatoes importers may be classified as small entities.
    Mexico, Canada, and the Netherlands are the major tomato producing 
countries exporting tomatoes to the United States. In 2005, shipments 
of tomatoes imported into the United States totaled 951,787 metric 
tons. Mexico accounted for 801,408 metric tons, 141,642 metric tons 
were imported from Canada, and 6,249 metric tons arrived from the 
Netherlands.
    This proposed rule would provide a partial exemption to the minimum 
grade requirements for UglyRipe tomatoes imported into the United 
States. The import requirements for tomatoes specify that tomatoes must 
meet at least a U.S. No. 2 grade before they can be shipped and sold 
into the fresh market. A proposed rule which would amend the rules and 
regulations under the order to exempt UglyRipe tomatoes from the shape 
requirements associated with the U.S. No. 2 grade is being issued by 
USDA. Accordingly, under section 8e of the Act, imports of tomatoes 
would have to meet the same or comparable grade, size, quality, and 
maturity requirements as the domestic product. This rule would provide 
the same partial exemption for UglyRipe tomatoes under the import 
regulation so it would conform to the domestic regulation.
    This change would represent a small increase in costs for importers 
of UglyRipe tomatoes, primarily from costs associated with developing 
and maintaining an IP program. However, the majority of importers 
associated with UglyRipe tomatoes were involved with the IP program 
prior to this proposed rule and have already received a successful 
audit. Therefore, the additional costs associated with this action 
would be those costs related to maintaining and complying with the IP 
program. It is anticipated that these costs would be minimal.
    In addition, this rule would make additional volumes of UglyRipe 
tomatoes available for shipment. This should result in increased sales 
of UglyRipe tomatoes. Consequently, the benefits of this action should 
more than offset the associated costs.
    Section 8e of the Act provides that when certain domestically 
produced commodities, including tomatoes, are regulated under a Federal 
marketing order, imports of that commodity must meet the same or 
comparable grade, size, quality, and maturity requirements. Since a 
proposed rule is being initiated that would provide a partial exemption 
to the minimum grade requirements under the domestic handling 
regulations, a corresponding change to the import regulations would 
also need to be accomplished.
    This rule would impose no additional reporting or recordkeeping 
requirements beyond the IP program on either small or large tomato 
importers. Reports and forms required under the import regulations for 
tomatoes are periodically reviewed to reduce information requirements 
and duplication by industry and public sector agencies.
    AMS is committed to compliance with the Government Paperwork 
Elimination Act, which requires Government agencies in general to 
provide the public the option of submitting information or transacting 
business electronically to the maximum extent possible.
    Additionally, except for applicable domestic regulations, USDA has 
not identified any relevant Federal rules that duplicate, overlap, or 
conflict with this rule. Finally, all 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.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this proposed rule.
    This rule invites comments on a proposed partial exemption to the 
minimum grade requirements for imported tomatoes. A 60-day comment 
period is provided to allow interested persons to respond to this rule. 
All comments received will be considered prior to finalization of this 
rule.

List of Subjects in 7 CFR Part 980

    Food grades and standards, Imports, Marketing agreements, Onions, 
Potatoes, Tomatoes.

    For the reasons set forth in the preamble, 7 CFR part 980 is 
proposed to be amended as follows:

PART 980--VEGETABLES; IMPORT REGULATIONS

    1. The authority citation for 7 CFR part 980 continues to read as 
follows:


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

    2. Amend Sec.  980.212, by adding a sentence at the end of 
paragraph (b)(1) to read as follows:


Sec.  980.212  Import regulation; tomatoes.

* * * * *
    (b) * * *
    (1) * * * Provided, That UglyRipeTM tomatoes shall be 
graded and at least meet the requirements specified for U.S. No. 2 
under the U.S. Standards for Grades of Fresh Tomatoes, except they are 
exempt from the requirements that they be reasonably well formed and 
not more than slightly rough, and Provided, Further that the 
UglyRipeTM tomatoes meet the requirements of the Identity 
Preservation program, Fresh Products Branch, Fruit and Vegetable 
Programs, AMS, USDA.
* * * * *

    Dated: June 26, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 06-5832 Filed 6-27-06; 12:01 pm]
BILLING CODE 3410-02-P