[Federal Register Volume 83, Number 203 (Friday, October 19, 2018)]
[Proposed Rules]
[Pages 53003-53007]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-22758]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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 

  Federal Register / Vol. 83, No. 203 / Friday, October 19, 2018 / 
Proposed Rules  

[[Page 53003]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 905 and 944

[Doc. AMS-SC-18-0046; SC18-905-3 PR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: This proposed rule invites comments on a recommendation from 
the Citrus Administrative Committee (Committee) to relax the minimum 
grade requirements for oranges and tangerines, remove grade and size 
requirements for Ambersweet and Temple oranges, and simplify the tables 
outlining the grade and size requirements for interstate and export 
shipments currently prescribed under the marketing order for oranges, 
grapefruit, tangerines, and pummelos grown in Florida. A corresponding 
change would be made to the grapefruit import regulation as required by 
section 8e of the Agricultural Marketing Agreement Act of 1937.

DATES: Comments must be received by November 19, 2018.

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 action, pursuant to 5 U.S.C. 553, 
proposes amendments to regulations issued to carry out a marketing 
order as defined in 7 CFR 900.2(j). This proposed 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. Part 905 (referred to as 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.'' The Committee locally 
administers the Order and is comprised of producers and handlers of 
citrus operating within the area of production, and a public member.
    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 proposed rule 
in conformance with Executive Orders 13563 and 13175. This action falls 
within a category of regulatory actions that the Office of Management 
and Budget (OMB) exempted from Executive Order 12866 review. 
Additionally, because this proposed 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 proposed 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 proposed rule invites comments on changes to the grade and 
size requirements under the Order. This proposal would relax the 
minimum grade requirements for oranges and Fall-glo, Sunburst, and 
Honey tangerines from U.S. No. 1 to U.S. No. 2. This action would also 
remove grade and size requirements for Ambersweet and Temple oranges 
and simplify the tables outlining the grade and size requirements for 
interstate and export shipments. These actions would maximize shipments 
by allowing more citrus to be shipped to the fresh market and would 
help increase returns to growers and handlers. These changes

[[Page 53004]]

were unanimously recommended by the Committee on April 26, 2018.
    Section 905.52 provides authority to establish minimum grade 
requirements for Florida citrus. Section 905.306 specifies, in part, 
the minimum grade requirements for citrus. 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 pursuant to Sec.  944.106.
    The Committee met on April 26, 2018, and discussed ways to provide 
additional supplies of Florida citrus to the marketplace and increase 
grower and handler returns. Committee members recognized that with the 
ongoing impacts of citrus greening, some adjustments should be made to 
assist growers and handlers and provide for the utilization of 
additional volume of Florida citrus in the fresh market.
    Citrus greening has caused the steady decline in Florida citrus 
production and has spread to all citrus producing counties in Florida. 
From the 2011-12 to the 2016-17 season, citrus greening has reduced 
Florida's orange production by 53 percent and tangerine production by 
67 percent. During the same period, fresh shipments have declined by 54 
percent for oranges and 80 percent for tangerines.
    The industry suffered additional production losses as a result of 
damage from Hurricane Irma in September 2017. According to USDA`s 
National Agricultural Statistics Service (NASS), production for the 
2016-17 season totaled 68.8 million boxes for oranges and 1.6 million 
boxes for tangerines. For the 2017-18 season, the forecasted production 
is expected to decrease by 34 percent for oranges and 53 percent for 
tangerines. Also, the citrus trees may take several seasons to recover 
from the hurricane damage, further impacting production and supply.
    Given the decrease in production, the Committee recommended 
relaxing the minimum grade requirements for oranges and Fallglo, 
Sunburst, and Honey tangerines from U.S. No. 1 to U.S. No. 2. During 
the discussion of this change, one Committee member stated the 
reduction in grade could help address the limited volumes of fruit 
available in the market. It was also stated that there was a good fresh 
juice market for the U.S. No. 2 orange and that this change could help 
promote the sale of more oranges for the fresh juice market.
    For tangerines, it was stated that the very limited volume of 
tangerines being produced in Florida was causing a supply concern for 
shippers. Members agreed that lowering the grade for tangerines would 
promote increased shipments.
    The Committee believes relaxing the grade from U.S. No. 1 to U.S. 
No. 2 for oranges and Fallglo, Sunburst, and Honey tangerines would 
allow growers and handlers to utilize a greater percentage of the crop 
and would make more fruit available for shipment. By implementing this 
change, the industry would be able to put an additional 300,000 cartons 
or more into the fresh market, helping to maximize shipments and to 
increase grower and handler returns.
    The Committee also discussed the limited production of Ambersweet 
and Temple oranges (also known as Royal tangerines). In the past, the 
Committee has considered removing the grade and size requirements for 
varieties with limited commercial value due to the very limited 
supplies available for shipment. Last season, Ambersweet oranges 
accounted for 4,280 cartons and Temple oranges accounted for a total of 
40,227 cartons sold. Given the decline in production, the Committee 
recommended removing restrictions on grade and size for Ambersweet and 
Temple oranges to maximize remaining shipments.
    The Committee also recommended simplifying Table I and Table II in 
Sec.  905.306, which outline the grade and size requirements for 
interstate and export shipments, to have them better reflect current 
industry requirements. Over the past few years, the Committee has made 
ongoing changes to both grade and size for a number of Florida citrus 
varieties. These changes have moved grade and size requirements toward 
greater commonality for both oranges and grapefruit.
    With the grade change considered above, there would be no 
differences in grade and size requirements for the various types and 
varieties of oranges listed in the table. Therefore, the Committee 
recommended that ``Early and midseason'' oranges be consolidated with 
``Navel'' and ``Valencia and other late type'' oranges into one 
``Oranges'' classification. For grapefruit, the grade and size 
requirements for the two listed categories are already the same. 
``Seedless, red'' and ``Seedless, except red'' would be combined into 
one ``Grapefruit, seedless'' classification.
    In addition, the Committee recommended removing the ``Regulation 
Period'' column from the two tables. With the exception of the dates 
listed in Table I for Valencia and other late type oranges, the various 
dates listed are no longer applicable and are not reflective of the 
current industry. The grade change proposed for oranges would also 
negate the need for the current dates listed for Valencia and other 
late type oranges. The Committee made these recommendations to simplify 
the tables to reflect changes in the industry.
    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. Because 
this proposed rule would combine ``Seedless, red'' and ``Seedless, 
except red'' into one classification for grapefruit in the two domestic 
handling regulation tables as well as remove the ``Regulation Period'' 
column from those tables, a corresponding change to the table in the 
grapefruit import regulations would be required.
    Further, two minor administrative changes would be made to Sec.  
944.106. In Sec.  944.106(c), the reference to ``Sec.  905.306'' would 
be revised to read ``Sec.  905.306(a) through (d)'' so that the 
requirements specifically applicable to imports are more clearly 
defined. Additionally, Sec.  944.106(d) would be updated to reflect the 
revised name of the Agricultural Marketing Service (AMS) program area 
that oversees federal marketing orders.
    The Committee also recommended establishing new reporting 
requirements under the Order. That change is being considered under a 
separate rulemaking action.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), 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

[[Page 53005]]

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 NASS, the industry, and the Committee, the 
weighted average f.o.b. price for Florida citrus for the 2016-17 season 
was approximately $15.20 per carton with total shipments of 12.6 
million cartons. Using the number of handlers, and assuming a normal 
distribution, the majority of handlers have average annual receipts of 
more than $7,500,000 ($15.20 times 12.6 million equals $191,520,000 
divided by 20 handlers equals $9,576,000 per handler).
    In addition, based on the NASS data, the weighted average grower 
price for the 2016-17 season was around $8.30 per carton of citrus. 
Based on grower price, shipment data, and the total number of Florida 
citrus growers, and assuming a normal distribution, the average annual 
grower revenue is below $750,000 ($8.30 times 12.6 million cartons 
equals $104,580,000 divided by 500 growers equals $209,160 per grower).
    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. Information from USDA's Foreign Agricultural 
Service 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.
    Based on the previously described estimates, the majority of 
handlers of Florida citrus may be classified as large entities, while 
the majority of growers and importers may be classified as small 
entities.
    This proposed rule would relax the minimum grade requirements for 
oranges and tangerines from U.S. No. 1 to U.S. No. 2, remove grade and 
size requirements for Ambersweet and Temple oranges, and simplify the 
tables outlining the grade and size requirements for interstate and 
export shipments. These changes would help maximize shipments by 
allowing more citrus to be shipped to the fresh market and would 
provide some additional fruit to address the losses resulting from 
citrus greening and the September 2017 hurricane. This proposed rule 
would revise Sec.  905.306. Authority for this change is provided in 
Sec.  905.52. This proposed rule would also change Sec.  944.106 in the 
grapefruit import regulation and is required by 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 would have a beneficial impact. 
Reducing the grade requirements would 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. These changes would provide additional fruit to fill the 
shortage caused by citrus greening and by Hurricane Irma. By maximizing 
shipments, this action would help provide additional returns to growers 
and handlers. Further, removing the grade and size requirements for 
Ambersweet and Temple oranges would also help maximize shipments of 
these varieties impacted by declining production.
    The benefits of this rule would also be equally available to all 
growers, handlers, and importers, regardless of their size.
    An alternative to this action would be to maintain the current 
minimum grade requirements for domestic shipments of oranges and 
tangerines. However, leaving the requirements unchanged would not make 
additional fruit available for shipment. Following the significant 
damage experienced by the industry from citrus greening and the 
September 2017 hurricane, maximizing shipments would help provide 
additional returns to growers and handlers. Therefore, this alternative 
was 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, Fruit Crops. 
No changes in those requirements are necessary as a result of this 
action. Should any changes become necessary, they would be submitted to 
OMB for approval.
    This proposed rule will not impose any additional reporting or 
recordkeeping requirements on either small or large Florida citrus 
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.
    The Committee's meeting was widely publicized throughout the citrus 
industry, and all interested persons were invited to attend the meeting 
and participate in Committee deliberations. Like all Committee 
meetings, the April 26, 2018, meeting was a public meeting, and all 
entities, both large and small, were able to express their views on 
this issue. Interested persons are invited to submit comments on this 
proposed rule, including the regulatory and information collection 
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.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this proposed rule.
    A 30-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

7 CFR Part 905

    Grapefruit, Marketing agreements, Oranges, Pummelos, 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, parts 905 and 944 are 
proposed to be amended as follows:

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

0
1. The authority citation for part 905 and part 944 continues to read 
as follows:

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

0
2. Amend Sec.  905.306 by

[[Page 53006]]

0
a. Revising paragraph (a), Table I to paragraph (a), paragraph (b), and 
Table II to paragraph (b); and
0
b. Redesignating Table III as Table III to paragraph (e) and in 
paragraph (e)(1) adding the words ``to paragraph (e)'' after ``Table 
III.'':


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

    (a) No handler shall ship between the production area and any point 
outside thereof, in the 48 contiguous States and the District of 
Columbia of the United States, any variety of fruit listed in column 
(1) of Table I to paragraph (a), except for Ambersweet and Temple, 
unless such variety meets the applicable minimum grade and size (with 
tolerances for size as specified in paragraph (c) of this section) 
specified for such variety in columns (2) and (3) of Table I to 
paragraph (a): Provided, That all grapefruit meet the minimum maturity 
requirements specified in paragraph (e) of this section.

                        Table I to Paragraph (a)
------------------------------------------------------------------------
                                                        Minimum diameter
             Variety                  Minimum grade         (inches)
(1)                                (2)................               (3)
------------------------------------------------------------------------
Oranges..........................  U.S. No. 2.........            2-4/16
Grapefruit, Seedless.............  U.S. No. 1.........                 3
Tangerines:
    Fallglo......................  U.S. No. 2.........            2-6/16
    Honey........................  U.S. No. 2.........            2-6/16
    Sunburst.....................  U.S. No. 2.........            2-6/16
Tangelos.........................  U.S. No. 1.........            2-8/16
------------------------------------------------------------------------

    (b) No handler shall ship to any destination outside the 48 
contiguous States and the District of Columbia of the United States any 
variety of fruit listed in column (1) of Table II to paragraph (b), 
except for Ambersweet and Temple, unless such variety meets the 
applicable minimum grade and size (with tolerances for size as 
specified in paragraph (c) of this section) specified for such variety 
in columns (2) and (3) of Table II to paragraph (b): Provided, That all 
grapefruit meet the minimum maturity requirements specified in 
paragraph (e) of this section.

                        Table II to Paragraph (b)
------------------------------------------------------------------------
                                                        Minimum diameter
             Variety                  Minimum grade         (inches)
(1)                                (2)................               (3)
------------------------------------------------------------------------
Oranges..........................  U.S. No. 2.........            2-4/16
Grapefruit, Seedless.............  U.S. No. 1.........                 3
Tangerines:
    Fallglo......................  U.S. No. 2.........            2-6/16
    Honey........................  U.S. No. 2.........            2-6/16
    Sunburst.....................  U.S. No. 2.........            2-6/16
Tangelos.........................  U.S. No. 1.........            2-8/16
------------------------------------------------------------------------

* * * * *

PART 944--FRUITS; IMPORT REGULATIONS

0
3. In Sec.  944.106
0
a. Revise the table in paragraph (a) and designate it as Table 1 to 
Sec.  944.106;
0
 b. Revise paragraph (c) and the first sentence in paragraph (d).
    The revisions to read as follows:


Sec.  944.106   Grapefruit import regulation.

    (a) * * *

                        Table 1 to Sec.   944.106
------------------------------------------------------------------------
                                                        Minimum diameter
    Grapefruit classification         Minimum grade         (inches)
(1)                                (2)................               (3)
------------------------------------------------------------------------
Grapefruit, seedless.............  U.S. No. 1.........                 3
------------------------------------------------------------------------

* * * * *
    (c) Terms and tolerances pertaining to grade and size requirements, 
which are defined in the United States Standards for Grades of Florida 
Grapefruit (7 CFR 51.750-51.784), and in Marketing Order No. 905 (7 CFR 
905.18 and 905.306(a) through (d)), shall be applicable herein.
    (d) The Federal or Federal-State Inspection Service, Specialty 
Crops Program, Agricultural Marketing Service, United States Department 
of Agriculture, is designated as the governmental inspection service 
for certifying the grade, size, quality, and

[[Page 53007]]

maturity of grapefruit imported into the United States. * * *
* * * * *

    Dated: October 15, 2018.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2018-22758 Filed 10-18-18; 8:45 am]
 BILLING CODE 3410-02-P