[Federal Register Volume 71, Number 125 (Thursday, June 29, 2006)]
[Proposed Rules]
[Pages 37014-37016]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-5833]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. FVO6-966-1 PR]


Tomatoes Grown in Florida; Partial Exemption to the Minimum Grade 
Requirements

ACTION: Proposed rule.

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SUMMARY: This rule invites comments on a proposed partial exemption to 
the minimum grade requirements under the marketing order for tomatoes 
grown in Florida (order). The Florida Tomato Committee (Committee) 
locally administers the order. Under the order, Florida tomatoes must 
meet at least a U.S. No. 2 grade before they can be shipped and sold 
outside the regulated area. This rule would exempt 
UglyRipeTM (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 the order requirements, and 
would help increase shipments and availability of these tomatoes.

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, Southeast Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA; telephone: (863) 324-3375, Fax: (863) 
325-8793, or e-mail [email protected]; or Christian Nissen, 
Regional Manager, Southeast Marketing Field Office, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA; 
telephone: (863) 324-3375, Fax: (863) 325-8793, or e-mail: 
[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 proposal is issued under Marketing 
Agreement No. 125 and Marketing Order No. 966, both as amended (7 CFR 
part 966), regulating the handling of tomatoes grown in certain 
designated counties in Florida, hereinafter referred to as the 
``order.'' The marketing agreement and order are effective under the 
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674), hereinafter referred to as the ``Act.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This proposal has been reviewed under Executive Order 12988, Civil

[[Page 37015]]

Justice Reform. This rule is not intended to have retroactive effect. 
This proposal 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 invites comments on a proposed partial exemption to the 
minimum grade requirements prescribed under the order. The order's 
rules and regulations specify that Florida tomatoes must meet at least 
a U.S. No. 2 grade before they can be shipped and sold outside the 
regulated area. This rule would exempt 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 the order 
requirements, and would help increase shipments and availability of 
these tomatoes. In addition, it is anticipated that this change would 
help promote continued innovation within the industry.
    Section 966.52 of the order provides the authority for the 
establishment of grade and size requirements for Florida tomatoes. Form 
and shape represent part of the factors of grade. Section 966.323 of 
the order's rules and regulations specifies, in part, the minimum grade 
requirements for Florida tomatoes. 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. This rule would amend Sec.  966.323 to 
exempt UglyRipe tomatoes from these shape requirements as specified 
under the grade for a U.S. No. 2.
    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 order. 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 continues to be required to meet all other requirements 
under the marketing order, such as size, pack and container, and 
inspection.
    Prior to the 1998-99 season, the Committee recommended that the 
minimum grade be increased from a U.S. No. 3 to a U.S. No. 2. Committee 
members agree that increasing the grade requirement has been very 
beneficial to the industry and in the marketing of Florida tomatoes. 
Further, 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 the UglyRipe 
tomatoes continuing to meet the requirements of the IP program.
    This rule would exempt 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.
    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 this 
rule 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. A 
proposed rule that would provide a similar partial exemption to the 
minimum grade requirements under the import regulations will be issued 
as a separate action.

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 there under, 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.
    There are approximately 100 producers of tomatoes in the production 
area and approximately 70 handlers subject to regulation under the 
marketing order. Small agricultural producers are defined by the Small 
Business Administration (SBA) as those

[[Page 37016]]

having annual receipts less than $750,000, and small agricultural 
service firms are defined as those whose annual receipts are less than 
$6,500,000 (13 CFR 121.201).
    Based on industry and Committee data, the average annual price for 
fresh Florida tomatoes during the 2004-05 season was approximately 
$12.50 per 25-pound container, and fresh shipments totaled 53,025,915 
25-pound cartons of tomatoes. Committee data indicates approximately 27 
percent of the handlers handle 95 percent of the total volume shipped 
outside the regulated area. Based on the average price, about 75 
percent of handlers could be considered small businesses under SBA's 
definition. In addition, based on production, grower prices as reported 
by the National Agricultural Statistics Service, and the total number 
of Florida tomato growers, the average annual grower revenue is below 
$750,000. Thus, the majority of handlers and producers of Florida 
tomatoes may be classified as small entities.
    This rule would provide a partial exemption to the minimum grade 
requirements for tomatoes grown in Florida. Under the order, Florida 
tomatoes must meet at least a U.S. No. 2 grade before they can be 
shipped and sold outside the regulated area. This rule would exempt 
UglyRipe tomatoes from the shape requirements specified under the 
Standards for a U.S. No. 2 grade. This change would increase the volume 
of UglyRipe tomatoes that would meet the order requirements, and would 
help increase shipments and availability of these tomatoes for 
consumers. This rule would amend the provisions of Sec.  966.323. 
Authority for this action is provided in Sec.  966.52 of the order.
    This change would represent a small increase in costs for producers 
and handlers of UglyRipe tomatoes, primarily from costs associated with 
developing and maintaining the IP program. However, the majority of 
facilities 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.
    One alternative to this action that was considered was to not 
provide an exemption from shape requirements for UglyRipe tomatoes. 
However, providing the exemption would increase the volume of UglyRipe 
tomatoes that would meet the order requirements, and would help 
increase shipments and availability of these tomatoes. Therefore, this 
alternative was rejected.
    This rule would not impose any additional reporting or 
recordkeeping requirements beyond the IP program on either small or 
large tomato 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.
    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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this proposed rule.
    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 a proposed partial exemption to the 
minimum grade requirements prescribed under the order. A 60-day comment 
period is provided to allow interested persons to respond to this 
proposal. All written comments timely received will be considered 
before a final determination is made on this matter.

List of Subjects in 7 CFR Part 966

    Marketing agreements, Reporting and recordkeeping requirements, 
Tomatoes.

    For the reasons set forth in the preamble, 7 CFR part 966 is 
proposed to be amended as follows:

PART 966--TOMATOES GROWN IN FLORIDA

    1. The authority citation for 7 CFR part 966 continues to read as 
follows:

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

    2. Amend Sec.  966.323, by adding a new paragraph (d)(5) to read as 
follows:


Sec.  966.323  Handling regulation.

* * * * *
    (d) * * *
    (5) For UglyRipeTM tomatoes. UglyRipe TM 
tomatoes must meet all the requirements of this section: 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. 06-5833 Filed 6-27-06; 12:01 pm]
BILLING CODE 3410-02-P