[Federal Register Volume 84, Number 73 (Tuesday, April 16, 2019)]
[Proposed Rules]
[Pages 15528-15531]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-07530]


 ========================================================================
 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. 84, No. 73 / Tuesday, April 16, 2019 / 
Proposed Rules  

[[Page 15528]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Doc. No. AMS-SC-18-0075; SC19-966-1 PR]


Tomatoes Grown in Florida; Modification of Handling Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement a recommendation from the 
Florida Tomato Committee (Committee) to change the handling regulations 
under the Marketing Order regulating the handling of tomatoes grown in 
Florida. This action would remove the standard weight requirements for 
tomato containers under the handling regulations.

DATES: Comments must be received by May 16, 2019.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. 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 proposal 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: Steven W. Kauffman, 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 an amendment to regulations issued to carry out a marketing 
order as defined in 7 CFR 900.2(j). This proposed rule is issued under 
Marketing Agreement No. 125 and Order No. 966, as amended (7 CFR part 
966), regulating the handling of tomatoes grown in Florida. Part 966 
(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 operating within 
the production area.
    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'[thinsp]'' (February 2, 2017).
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This proposed 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.
    This proposed rule invites comments on eliminating the standard 
weight certification requirement established under the Order for the 
2019-20 and subsequent fiscal periods. This action would reduce time 
and costs associated with tomato inspection at handling facilities. The 
Committee unanimously approved this recommendation at public meetings 
held on August 24, 2018, and on September 6, 2018.
    Section 966.52 of the Order provides authority to the Committee to 
establish pack and container requirements for tomatoes grown within the 
regulated area. This includes fixing the size, weight, capacity, 
dimensions, markings, or pack of the container which may be used in the 
packaging, transportation, sale, shipment, or other handling of 
tomatoes.
    Section 966.323 sets forth the handling regulations for Florida 
tomatoes. Section 966.323(a)(3)(i) designates the container 
requirements for weight and that Section 51.1863 of the U.S. Tomato 
Standards (7 CFR 51.1863), which specifies the standard weight 
requirement, shall apply to all containers.
    Section 966.60 requires Florida tomatoes to be inspected and 
certified by authorized representatives of the Federal or Federal-State 
Inspection Service (FSIS), or such other inspection service as the 
Secretary shall designate. The Florida Department of Agriculture and 
Consumer Services is an agency employing state workers who collaborate 
with the USDA to provide inspection services to areas not serviced by 
federal employees. FSIS currently certifies to standard weight as part 
of the inspection process.

[[Page 15529]]

    The Committee met on August 24, 2018, and on September 6, 2018, to 
discuss current standard weight procedures and compliance with the 
standard weight certification requirements. Representatives from USDA's 
Specialty Crop Inspection Division (SCI) and from FSIS were present to 
participate in the discussion. These representatives informed Committee 
members that some handling facilities were not maintaining compliance 
with the standard weight certification requirements.
    The current inspection sampling rate for standard weight 
certification is 36 containers sampled based on a lot size of 1600 
containers. FSIS currently samples eight tomato containers from each 
lot for grade and size inspection, and these containers are also 
weighed as part of the sampling for standard weight. In order to comply 
with standard weight certification procedures, an additional 28 
containers need to be weighed. To lower the inspection time and cost, 
many tomato handlers provide an employee to sample and weigh the 
additional 28 containers to reach the total 36 samples required for the 
standard weight certification of each lot.
    The containers weighed must meet the prescribed inspection 
requirements in Sec.  51.1863 for certification of the lot. Section 
51.1863 specifies that when packages are marked to a net weight of 15 
pounds or more, the net weight of the contents shall not be less than 
the designated net weight and shall not exceed the designated weight by 
more than 2 pounds. In order to allow for variations incident to proper 
sizing, not more than 15 percent, by count, of the packages in any lot 
may fail to meet the requirements for standard weight. Most of the 
tomatoes produced in the production area are packed in 25-pound 
containers.
    In their discussion, Committee members stated the current sampling 
rate requires costly labor and is a time-consuming process that is 
difficult to maintain due to the handling volume in many operations. 
One industry member stated that the volume of lots inspected at some 
handling operations can total around 50 lots in a single 24-hour 
period. If 50 lots were inspected in one day this would equal a total 
of 1800 samples selected for recording the weight. The handler's 
employee would be responsible for pulling and weighing 1400 of these 
25-pound samples to meet the standard weight requirement. Thus, high 
volume handlers may have to employ multiple people to perform the 
weight inspections.
    The labor provided by the handler expedites the certification 
process and is lower than the cost of having FSIS inspectors weigh the 
additional cartons. However, standard weight certification is still 
expensive to maintain. One member stated that providing the necessary 
employees at their handling facility to properly administer the 
certification program cost an extra $80,000 a year above the fees 
charged by FSIS inspection.
    The Committee asked if it might be possible to lower the sampling 
rate while maintaining the certification process as the container 
sampling size for standard weight is several times greater than the 
number of containers sampled by FSIS when certifying for grade and 
size. SCI stated that certification at a rate lower than 36 samples 
would require a study that could statistically support a new sampling 
rate. SCI indicated a study would possibly take a year to develop, 
implement, and to analyze the results. Committee members expressed 
concern over the time and cost of carrying out such a study, and that 
the best course of action may be to remove the requirement for standard 
weight inspection.
    In discussing the value of the weight certification program, 
Committee members stated that receivers of Florida tomato shipments 
still perform weight inspections regardless of the required weight 
certification. Even with the standard weight certification, there are 
occasions when weight is an issue and the shipper often rectifies any 
discrepancies by making an adjustment to the shipment for the receiver. 
At both meetings, Committee members expressed that handling operations 
are spending thousands of dollars annually to meet the certification 
requirement without realizing a significant benefit from the program. 
Committee members stated that the expense of labor and inspection time 
for certification is difficult to justify since the handler already 
makes an adjustment for the receiver regardless of the certification.
    Committee members also stated that tomato handlers outside the 
regulated area are not required to maintain standard weight 
certification. One member indicated that eliminating the standard 
weight requirement on Florida tomato handlers would allow the 
industry's inspection procedures to be more comparable to handlers 
outside the regulated area. Another commenter stated that most handlers 
are now using in-line scales to weigh each container and did not see 
the benefit of requiring standard weight certification.
    Removing the standard weight requirement would allow handlers to 
avoid the time and labor costs associated with the certification 
process. The Committee believes there is no longer enough benefit to 
justify maintaining the standard weight certification, and unanimously 
recommended eliminating the standard weight requirements for the 2019-
20 and subsequent fiscal periods.
    Committee members agreed that maintaining the individual net weight 
requirements for containers is still a valuable component of the Order. 
The current net weight requirements state all tomatoes packed by a 
registered handler shall be packed in containers of 10, 20, and 25 
pounds designated net weights. The net weight of the contents shall not 
be less than the designated net weight and shall not exceed the 
designated net weight by more than two pounds. This action would not 
modify that requirement.
    With this action, FSIS would still sample the required containers 
to perform size and grade inspection along with recording the weights 
from each sample. FSIS could provide a record of the weights from the 
eight samples inspected for size and grade upon request. The Committee 
noted that the eight samples weighed by FSIS would provide an 
independent record to reference in addition to the in-line automated 
weighing systems used by many handlers. The Committee believes the 
eight samples weighed by FSIS in conjunction with the automated 
weighing systems would provide ample information regarding the 
container weights for each lot. Further, eliminating the standard 
weight requirement would not preclude the handler from requesting a 
standard weight inspection.
    Section 8e of the Act (7 U.S.C. 608e-1) 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. 
No corresponding change to the import regulations is required as this 
is a proposal to change the container requirements.

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 proposed rule on small 
entities. Accordingly, AMS has prepared this initial regulatory 
flexibility analysis.

[[Page 15530]]

    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 75 producers of Florida tomatoes in the 
production area and 37 handlers subject to regulation under the Order. 
Small agricultural producers are defined by the Small Business 
Administration (SBA) as those having annual receipts less than 
$750,000, and small agricultural service firms are defined as those 
whose annual receipts are less than $7,500,000 (13 CFR 121.201).
    According to industry and Committee data, the average annual price 
for fresh Florida tomatoes during the 2017-18 season was approximately 
$12.56 per 25-pound container, and total fresh shipments were 25.9 
million containers. Using the average price and shipment information, 
the number of handlers, and assuming a normal distribution, the 
majority of handlers have average annual receipts of more than 
$7,500,000, ($12.56 times 25.9 million containers equals $325,304,000 
divided by 37 handlers equals $8,792,000 per handler).
    In addition, based on production data, an estimated producer price 
of $6.00 per 25-pound container, the number of Florida tomato 
producers, and assuming a normal distribution, the average annual 
producer revenue is above $750,000 ($6.00 times 25.9 million containers 
equals $155,400,000 divided by 75 producers equals $2,072,000 per 
producer). Thus, the majority of handlers and producers of Florida 
tomatoes may be classified as large entities.
    This proposed rule would eliminate the standard weight 
certification requirement under the Order. The Committee determined 
there is no longer sufficient benefit to justify the cost and time 
required for the standard weight certification. This proposed action 
would enable handlers to reduce inspection time and labor costs 
associated with the standard weight program. This rule would revise 
Sec.  966.323. Authority for these changes is provided in Sec.  966.52.
    It is not anticipated that this action would impose additional 
costs on handlers or growers, regardless of size. The proposed changes 
are intended to reduce expenses incurred for labor and inspection time 
associated with the certification process for standard weight.
    The current inspection sampling rate for standard weight 
certification based on a lot size of 1600 containers is 36 containers. 
FSIS currently samples eight tomato containers from each lot for grade 
and size inspection, and these containers are also weighed as part of 
the sampling for standard weight. In order to comply with standard 
weight certification procedures, an additional 28 containers need to be 
weighed. To lower the inspection time and cost, many tomato handlers 
provide an employee to sample and weigh the additional 28 containers to 
reach the total 36 samples required for the standard weight 
certification of each lot.
    Total fresh shipments of Florida tomatoes for the 2017-18 season 
were 25.9 million 25-pound containers. This volume represents 
approximately 16,188 normal lots of tomatoes requiring inspection for 
standard weight. Using 2017-18 volume, this change would eliminate the 
requirement that inspection personnel or handler employees lift, weigh, 
and record approximately 453,265 25-pound containers during a similar 
season. This analysis illustrates the laborious nature involved in the 
standard weight inspection and certification process.
    Avoiding the time and labor costs associated with standard weight 
certification would reduce expenses for the Florida tomato industry. 
This proposed action would reduce the labor required for the inspection 
process by thousands of hours every year, reducing the cost for 
handlers. The expense of labor for inspection can vary widely between 
handler employees and the FSIS. However, one Committee member stated 
that this action would save his handling operation $80,000 every year. 
This proposed action is expected to lower handler cost associated with 
the inspection process. The benefits of this rule are expected to be 
equally available to all Florida fresh tomato handlers, regardless of 
size.
    The Committee considered an alternative to this proposed action. 
Prior to this recommendation, the Committee discussed lowering the 
sampling size for the standard weight certification program with the 
SCI. However, after further discussion on the inspection process and 
the time it could possibly take to review, the Committee determined the 
standard weight program no longer provided sufficient benefit to 
justify the cost and time required for certification. Therefore, the 
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. 0581-0178 Vegetable and 
Specialty Crops. No changes are necessary in those requirements as a 
result of this proposed action. Should any changes become necessary, 
they would be submitted to OMB for approval.
    This proposed rule would not impose any additional reporting or 
recordkeeping requirements on either small or large Florida 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 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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this proposed rule.
    The Committee's meetings were widely publicized throughout the 
Florida tomato industry, and all interested persons were invited to 
attend the meeting and participate in Committee deliberations on all 
issues. Like all Committee meetings, the August 24 and September 6, 
2018, meetings were public meetings, 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 proposed 
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.
    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 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:

[[Page 15531]]

PART 966--TOMATOES GROWN IN FLORIDA

0
1. The authority citation for 7 CFR part 966 continues to read as 
follows:

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

0
2. Amend Sec.  966.323 by revising paragraphs (a)(3)(i) and the last 
two sentences of paragraph (g) to read as follows:


Sec.  966.323  Handling Regulations.

* * * * *
    (a) * * *
    (3) * * *
    (i) All tomatoes packed by a registered handler shall be packed in 
containers of 10, 20, and 25 pounds designated net weights. The net 
weight of the contents shall not be less than the designated net weight 
and shall not exceed the designated net weight by more than two pounds.
* * * * *
    (g) * * * U.S. tomato standards means the revised United States 
Standards for Fresh Tomatoes (Sec. Sec.  51.1855 through 51.1877) 
effective October 1, 1991, as amended, or variations thereof specified 
in this section, Provided that 51.1863 shall not apply to tomatoes 
covered by this part. Other terms in this section shall have the same 
meaning as when used in Marketing Agreement No. 125, as amended, and 
this part, and the U.S. tomato standards.

    Dated: April 11, 2019.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2019-07530 Filed 4-15-19; 8:45 am]
 BILLING CODE 3410-02-P