[Federal Register Volume 82, Number 223 (Tuesday, November 21, 2017)]
[Rules and Regulations]
[Pages 55305-55309]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-25209]



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 Rules and Regulations
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains regulatory documents 
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  Federal Register / Vol. 82, No. 223 / Tuesday, November 21, 2017 / 
Rules and Regulations  

[[Page 55305]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 905 and 944

[Doc. No. AMS-SC-17-0063; SC17-905-1 IR]


Oranges, Grapefruit, Tangerines, and Pummelos Grown in Florida 
and Imported Grapefruit; Change in Size Requirements for Grapefruit

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim rule with request for comments.

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

SUMMARY: This rule implements a recommendation from the Citrus 
Administrative Committee (Committee) to relax the minimum size 
requirements currently prescribed for grapefruit under the marketing 
order for oranges, grapefruit, tangerines, and pummelos grown in 
Florida (Order). The Committee locally administers the Order and is 
comprised of producers and handlers operating within the production 
area and one public member. This rule relaxes the minimum size 
requirement for grapefruit from 3\5/16\ inches in diameter to 3 inches 
in diameter. This rule will maximize shipments by allowing more 
grapefruit to be shipped to the fresh market and will help reduce the 
losses sustained by the grapefruit industry during the September 2017 
hurricane in Florida. The corresponding change in the grapefruit import 
regulation is required under section 8e of the Agricultural Marketing 
Agreement Act of 1937.

DATES: Effective November 24, 2017; comments received by January 22, 
2018 will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
Marketing Order and Agreement Division, Specialty Crops Program, AMS, 
USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-
0237; Fax: (202) 720-8938; or internet: http://www.regulations.gov. All 
comments should reference the document 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.regulations.gov. All 
comments submitted in response to this rule will be included in the 
record and will be made available to the public. Please be advised that 
the identity of the individuals or entities submitting the comments 
will be made public on the Internet at the address provided above.

FOR FURTHER INFORMATION CONTACT: Abigail Campos, Marketing Specialist, 
or Christian D. Nissen, Regional Director, Southeast Marketing Field 
Office, Marketing Order and Agreement Division, Specialty Crops 
Program, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 291-8614, or 
Email: [email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Marketing Order and Agreement 
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue 
SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, 
Fax: (202) 720-8938, or Email: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order 
No. 905, as amended (7 CFR part 905), regulating the handling of 
oranges, grapefruit, tangerines, and pummelos grown in Florida, 
hereinafter referred to as the ``Order.'' The Order is effective under 
the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 
601-674), hereinafter referred to as the ``Act.''
    This rule is also issued under section 8e of the Act, which 
provides that whenever certain specified commodities, including 
grapefruit, 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 
commodities.
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Orders 13563 and 13175. This rule falls 
within a category of regulatory actions that the Office of Management 
and Budget (OMB) exempted from Executive Order 12866 review. 
Additionally, because this rule does not meet the definition of a 
significant regulatory action it does not trigger the requirements 
contained in Executive Order 13771. See OMB's Memorandum titled 
``Interim Guidance Implementing Section 2 of the Executive Order of 
January 30, 2017, titled `Reducing Regulation and Controlling 
Regulatory Costs' '' (February 2, 2017).
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect.
    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.
    There are no administrative procedures that must be exhausted prior 
to any judicial challenge to the provisions of import regulations 
issued under section 8e of the Act.
    This rule relaxes the minimum size requirements for grapefruit 
prescribed under the Order. This rule relaxes the minimum size 
requirement for grapefruit from 3\5/16\ inches in diameter to 3 inches 
in diameter. This rule will maximize shipments by allowing more 
grapefruit to be shipped to the fresh market and will help reduce the 
losses sustained by the grapefruit industry during the September 2017 
hurricane in Florida. This change was unanimously recommended by the 
Committee at

[[Page 55306]]

meetings on June 29, 2017, and September 28, 2017.
    Section 905.52 of the Order provides authority to establish minimum 
size requirements for Florida citrus. Section 905.306 of the rules and 
regulations issued under the Order specifies, in part, the minimum size 
requirements for grapefruit. Requirements for domestic shipments are 
specified in Sec.  905.306 in Table I of paragraph (a) and for export 
shipments in Table II of paragraph (b). Minimum grade and size 
requirements for grapefruit imported into the United States are 
currently in effect under Sec.  944.106.
    At its June 29, 2017, meeting, the Committee discussed the 
continuing decline in production as a result of losses from citrus 
greening, which is affecting the entire production area. The Committee 
also recognized that some consumers are now showing a preference for 
smaller-sized fruit. The Committee agreed the current minimum size 
should be relaxed in order to make additional fruit available for 
shipment.
    The Committee met again on September 28, 2017, to discuss the 
additional damage Hurricane Irma caused to the current crop and 
revisited the discussion regarding the need to reduce the minimum size 
requirements. The major grapefruit-growing regions in Florida suffered 
significant damage and fruit loss from the hurricane. The strong winds 
from the storm blew substantial volumes of fruit off the trees. The 
impact of the storm is also expected to produce a much higher than 
normal fruit drop. The extent of the loss is evident in the official 
USDA crop estimate for this season, which reflects a 37 percent 
decrease from last year's estimate. Given the limited supply of fruit 
due to citrus greening and the impact of Hurricane Irma, the Committee 
believes relaxing the size requirements for grapefruit is needed to 
make more fruit available for shipment.
    The Committee also considered a reduction in the soluble solids and 
the solids-to-acid minimum ratio as outlined in the minimum maturity 
requirements. However, members were concerned that reducing maturity 
requirements would impact the quality of the fruit. Consequently, the 
Committee did not recommend making any changes to the minimum maturity 
requirements at this time.
    Committee members recognized that with the special circumstances 
surrounding this season and with the ongoing impacts of citrus 
greening, some allowances should be made to assist growers and handlers 
and provide additional volume to the market. The Committee believes 
relaxing the size requirements will make more fruit available to meet 
market demand, help maximize fresh shipments, increase returns to 
growers and handlers, and help address the losses stemming from the 
hurricane. Consequently, the Committee recommended changing the minimum 
size requirement for grapefruit from 3\5/16\ inches in diameter to 3 
inches in diameter.
    Section 8e of the Act provides that when certain domestically 
produced commodities, including grapefruit, 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 changes the minimum size requirement under the domestic 
handling regulations for grapefruit, a corresponding change to the 
import regulations is required.
    Minimum grade and size requirements for grapefruit imported into 
the United States are currently in effect under Sec.  944.106 of the 
Fruit Import Regulations. Section 944.106(h) specifies that grapefruit 
imported into the United States are in most direct competition with 
grapefruit produced in the area covered by Marketing Order No. 905. 
This change relaxes the minimum size requirements for imported 
grapefruit from 3\5/16\ inches in diameter to 3 inches in diameter. The 
relaxation of minimum size requirements also has a beneficial impact on 
importers of grapefruit. This change allows a smaller-sized grapefruit 
to be shipped to the United States, thereby increasing the amount of 
fruit available for shipment to the fresh market, thus benefiting 
importers.
    The Committee also recommended a relaxation in the minimum size 
requirements for oranges covered under the Order. That change is being 
considered under a separate action.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), 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 
businesses 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.
    There are approximately 20 handlers of Florida citrus who are 
subject to regulation under the Order and approximately 500 citrus 
producers in the regulated area. There are approximately 50 citrus 
importers. Small agricultural service firms are defined by the Small 
Business Administration (SBA) as those having annual receipts of less 
than $7,500,000, and small agricultural producers are defined as those 
having annual receipts of less than $750,000 (13 CFR 121.201).
    According to data from the National Agricultural Statistics Service 
(NASS), the industry, and the Committee, the average f.o.b. price for 
Florida grapefruit during the 2016-17 season was $29.40 per box, and 
total fresh grapefruit shipments were approximately 3.2 million boxes. 
Using the average f.o.b. price and shipment data, the majority of 
Florida grapefruit handlers could be considered small businesses under 
SBA's definition ($29.40 times 3.2 million boxes equals $94.1 million 
divided by 20 handlers equals $4.7 million per handler). In addition, 
based on NASS data, the average grower price for the 2016-17 season was 
$16.02 per box. Based on grower price, shipment data, and the total 
number of Florida citrus growers, the average annual grower revenue is 
below $750,000 ($16.02 times 3.2 million boxes equals $51,264,000 
divided by 500 producers equals $102,528 per handler). Information from 
the Foreign Agricultural Service, USDA, indicates that the dollar value 
of imported fresh grapefruit was approximately $11.2 million in 2016. 
Using this value and the number of importers (approximately 50), most 
importers would have annual receipts of less than $7,500,000 for 
grapefruit. Thus, the majority of handlers, producers, and importers of 
grapefruit may be classified as small entities.
    South Africa, Peru, and Mexico are the major grapefruit-producing 
countries exporting grapefruit to the United States. In 2016, shipments 
of grapefruit imported into the United States totaled approximately 
24,000 metric tons.
    This rule relaxes the minimum size requirements for grapefruit 
covered under the order from a 3\5/16\ inches in diameter to 3 inches 
in diameter and makes a corresponding change to the grapefruit import 
regulation. This change is expected to maximize shipments by allowing 
more grapefruit to be shipped to the fresh market and will help reduce 
the losses sustained by the grapefruit industry as a result of citrus 
greening and the September 2017 hurricane in Florida. Authority for 
this

[[Page 55307]]

change is provided in Sec.  905.52. This rule revises Sec. Sec.  
905.306 and 944.106. The Committee unanimously recommended this change 
at its June 29, 2017, and September 28, 2017, meetings. The change in 
the import regulation is required under section 8e of the Act.
    This action is not expected to increase the costs associated with 
the Order's requirements or the grapefruit import regulation. Rather, 
it is anticipated that this action will have a beneficial impact. 
Reducing the size requirements will make additional fruit available for 
shipment to the fresh market, provide an outlet for fruit that may 
otherwise go unharvested, and afford more opportunity to meet consumer 
demand. This change will provide additional fruit to fill the shortage 
caused by citrus greening and by Hurricane Irma. Further, by maximizing 
shipments, this action will help provide additional returns to growers 
and handlers as they work to recover from the losses stemming from the 
hurricane.
    This action may also help reduce harvesting costs. By reducing the 
minimum size, more fruit will be able to be harvested immediately. This 
may eliminate the need to leave fruit on the tree to increase in size, 
which requires follow-up picking later in the season. Given the amount 
of fruit loss, this could help reduce picking costs substantially. The 
benefits of this rule are expected to be equally available to all fresh 
grapefruit growers, handlers, and importers, regardless of their size.
    An alternative to this action would be to maintain the current 
minimum size requirements for domestic shipments of grapefruit. 
However, leaving the requirements unchanged would not make additional 
fruit available for shipment. Following the significant damage 
experienced by the industry from the September 2017 hurricane, 
maximizing shipments will help provide additional returns to growers 
and handlers as they recover from the loss. Another alternative 
considered was to reduce the minimum maturity requirements. However, 
Committee members thought it was important to maintain the maturity 
requirements to ensure overall quality. Therefore, these alternatives 
were rejected.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the Order's information collection requirements have been 
previously approved by OMB and assigned OMB No. 0581-0189, Generic 
Fruit Crops. No changes in those requirements as a result of this 
action are necessary. Should any changes become necessary, they would 
be submitted to OMB for approval.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large grapefruit 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 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.
    In addition, USDA has not identified any relevant Federal rules 
that duplicate, overlap, or conflict with this rule.
    Further, the Committee's meetings were widely publicized throughout 
the citrus industry, and all interested persons were invited to attend 
the meetings and participate in Committee deliberations. Like all 
Committee meetings, the June 29, 2017, and September 28, 2017, meetings 
were public meetings, and all entities, both large and small, were able 
to express their views on this issue. Further, information will be 
provided to importers regarding this change. Finally, interested 
persons are invited to submit comments on this interim rule, including 
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/rules-regulations/moa/small-businesses. Any questions 
about the compliance guide should be sent to Richard Lower at the 
previously mentioned address in the FOR FURTHER INFORMATION CONTACT 
section.
    This rule invites comments on a change to the size requirements for 
grapefruit currently prescribed under the Marketing Order for oranges, 
grapefruit, tangerines, and pummelos grown in Florida and the 
grapefruit import regulation. Any comments received will be considered 
prior to finalization of this rule.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that 
this interim rule, as hereinafter set forth, will tend to effectuate 
the declared policy of the Act.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this interim rule.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective date 
of this rule until 30 days after publication in the Federal Register. 
The Florida citrus industry has been dealing with the devastating 
effects of citrus greening for more than 10 years, resulting in ever 
smaller harvests and escalating production costs. The September 2017 
hurricane caused significant additional damage and crop loss to the 
industry, with losses estimated at more than $700 million. This rule, 
in conjunction with a companion rule for oranges, will bring some much-
needed relief by providing additional fruit for shipment to the fresh 
market and to increase returns to growers and handlers. Based on the 
size frequency measurements provided by NASS as part of grapefruit and 
orange crop estimates, the recommended relaxation in size for both 
grapefruit and oranges could make an additional 20 to 25 percent of the 
crop available for shipment to the fresh market. Based on estimates, 
this could mean an additional volume of about 700,000 boxes of citrus 
available for shipment. Using an average fresh price per box of around 
$30, this could provide the industry with an additional $20 million in 
returns for the 2017-18 season. This rule relieves a restriction on the 
size of domestic and imported grapefruit that can be shipped to the 
fresh market. Therefore good cause exists for this rule becoming 
effective three days after publication in the Federal Register. In 
addition, the Committee unanimously recommended these changes at public 
meetings, and interested parties had an opportunity to provide input. 
Further, this rule provides a 60-day comment period, and any comments 
received will be considered prior to finalization of this rule.

List of Subjects

7 CFR Part 905

    Grapefruit, Marketing agreements, Oranges, Reporting and 
recordkeeping requirements, Tangelos, Tangerines.

7 CFR Part 944

    Avocados, Food grades and standards, Grapefruit, Grapes, Imports, 
Kiwifruit, Limes, Olives, Oranges.

    For the reasons set forth in the preamble, 7 CFR parts 905 and 944 
are amended as follows:

[[Page 55308]]

PART 905--ORANGES, GRAPEFRUIT, TANGERINES, AND PUMMELOS GROWN IN 
FLORIDA

0
1. The authority citation for part 905 continues to read as follows:

    Authority:  7 U.S.C. 601-604.


0
2. In Sec.  905.306, Table I in paragraph (a) and Table II in paragraph 
(b) are amended by revising the entries for ``Seedless, red'' and 
``Seedless, except red'' under ``Grapefruit'' to read as follows:


Sec.  905.306  Orange, Grapefruit, Tangerine and Tangelo Regulation.

    (a) * * *

                                                     Table I
----------------------------------------------------------------------------------------------------------------
                                                                                                      Minimum
                 Variety                       Regulation period             Minimum grade           diameter
                                                                                                     (inches)
(1)                                       (2).......................  (3).......................             (4)
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
Grapefruit
    Seedless, red.......................  On and after 11/13/00.....  U.S. No. 1................               3
    Seedless, except red................  On and after 9/01/94......  U.S. No. 1................               3
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

    (b) * * *

                                                    Table II
----------------------------------------------------------------------------------------------------------------
                                                                                                      Minimum
                 Variety                       Regulation period             Minimum grade           diameter
                                                                                                     (inches)
(1)                                       (2).......................  (3).......................             (4)
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
Grapefruit
    Seedless, except red................  On and after 9/01/94......  U.S. No. 1................               3
    Seedless, red.......................  On and after 9/01/94......  U.S. No. 1................               3
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

PART 944--FRUITS; IMPORT REGULATIONS

0
3. The authority citation for part 944 continues to read as follows:

    Authority:  7 U.S.C. 601-604.

0
4. In Sec.  944.106, the table in paragraph (a) is revised to read as 
follows:


Sec.  944.106  Grapefruit import regulation.

    (a) * * *

----------------------------------------------------------------------------------------------------------------
                                                                                                      Minimum
        Grapefruit classification              Regulation period             Minimum grade           diameter
                                                                                                     (inches)
(1)                                       (2).......................  (3).......................             (4)
----------------------------------------------------------------------------------------------------------------
    Seedless, red.......................  On and after 11/13/00.....  U.S. No. 1................               3
    Seedless, except red................  On and after 9/01/94......  U.S. No. 1................               3
----------------------------------------------------------------------------------------------------------------


[[Page 55309]]

* * * * *

    Dated: November 16, 2017.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2017-25209 Filed 11-20-17; 8:45 am]
BILLING CODE 3410-02-P