[Federal Register Volume 72, Number 11 (Thursday, January 18, 2007)]
[Rules and Regulations]
[Pages 2170-2173]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-593]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 980

[Docket No. FV06-980-1 FR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule provides a 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 rule to amend the 
rules and regulations under the order to exempt UglyRipeTM 
(UglyRipe) tomatoes from the shape requirements associated with the 
U.S. No. 2 grade is being issued by Department of Agriculture (USDA). 
This rule provides the same partial exemption under the import 
regulation so it will conform to the regulations for Florida tomatoes 
under the order.

DATES: Effective Date: This final rule becomes effective January 19, 
2007.

[[Page 2171]]


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; or 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 final 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.
    The Department of Agriculture (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.
    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 final rule provides 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 final 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 provides the same partial exemption under 
the import regulation so it conforms 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 as 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 provides UglyRipe tomatoes with a partial exemption from 
the grade requirements under the import regulation. UglyRipe tomatoes 
are only exempt from the shape requirements of the grade and are still 
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 only extends to UglyRipe tomatoes covered 
under the IP program. As such, this should help ensure that only 
UglyRipe tomatoes are shipped under the exemption. In addition, this 
exemption is contingent upon imported UglyRipe tomatoes continuing to 
meet the specific requirements related to imports established under the 
IP program.
    This final rule exempts imported UglyRipe tomatoes from the shape 
requirements associated with the U.S. No. 2 grade. This change 
increases the volume of UglyRipe tomatoes that will meet order 
requirements, and will help increase shipments and availability of 
these tomatoes.
    This rule brings the tomato import regulation into conformity with 
the 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.

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 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.

[[Page 2172]]

    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 
tomato 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 final rule provides 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 rule which amends 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 have to 
meet the same or comparable grade, size, quality, and maturity 
requirements as the domestic product. This rule provides the same 
partial exemption for UglyRipe tomatoes under the import regulation so 
it conforms 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. It is anticipated that these costs will 
be minimal.
    In addition, this rule makes 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 
final rule is being initiated that provides a partial exemption to the 
minimum grade requirements under the domestic handling regulations, a 
corresponding change to the import regulations also needs to be 
accomplished.
    This final rule imposes 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.
    The AMS is committed to complying with the E-Government Act, to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.
    Additionally, except for applicable domestic regulations, USDA has 
not identified any relevant Federal rules that duplicate, overlap, or 
conflict with this final rule. Further, the public comment received 
concerning the proposal did not address the initial regulatory 
flexibility analysis.
    A proposed rule concerning this action was published in the Federal 
Register on June 29, 2006 (71 FR 37016). Copies of the rule were mailed 
or sent via facsimile to all Committee members and tomato importers. 
Finally, the rule was made available through the Internet by USDA and 
the Office of the Federal Register. A 60-day comment period ending 
August 28, 2006, was provided to allow interested persons to respond to 
the proposal.
    One comment was received during the comment period in response to 
the proposal. The commenter, in opposition of the proposed exemption, 
stated that this action presents too many opportunities for domestic 
and import growers to cheat and sell tomatoes of inferior quality.
    USDA does not believe this partial exemption will create such an 
opportunity. There are safeguards in place to help address this issue. 
In addition to the existing inspection requirements, and compliance 
efforts, this partial exemption only extends to UglyRipe tomatoes 
covered under the IP program. This program was developed by AMS and 
provides independent, third-party verification of the segregation of a 
company's product at every stage, from seed, production and processing, 
to distribution. This will help ensure that only UglyRipe tomatoes are 
shipped using this partial exemption, as only handlers covered under 
the IP program will be allowed to pack under the exemption. Further, 
USDA plans to closely monitor compliance with this exemption.
    Accordingly, no changes will be made to the rule as proposed, based 
on the comment 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.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this final rule.
    After consideration of all relevant matter presented, including the 
information and recommendation submitted by the Committee and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    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 the regulatory period will 
begin October 10, 2006. Also, a 60-day comment period was provided for 
in the proposed rule.

List of Subjects in 7 CFR Part 980

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


0
For the reasons set forth in the preamble, 7 CFR part 980 is amended as 
follows:

PART 980--VEGETABLES; IMPORT REGULATIONS

0
1. The authority citation for 7 CFR part 980 continues to read as 
follows:

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

0
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

[[Page 2173]]

Branch, Fruit and Vegetable Programs, AMS, USDA.
* * * * *

    Dated: January 11, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E7-593 Filed 1-17-07; 8:45 am]
BILLING CODE 3410-02-P