[Federal Register Volume 84, Number 213 (Monday, November 4, 2019)]
[Rules and Regulations]
[Pages 59289-59292]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21015]



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 Rules and Regulations
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  Federal Register / Vol. 84, No. 213 / Monday, November 4, 2019 / 
Rules and Regulations  

[[Page 59289]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

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


Tomatoes Grown in Florida; Modification of Handling Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This rule implements 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 removes the standard weight requirements for tomato 
containers under the handling regulations.

DATES: Effective December 4, 2019.

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 final rule, pursuant to 5 U.S.C. 553, 
amends regulations issued to carry out a marketing order as defined in 
7 CFR 900.2(j). This final rule is issued under Marketing Agreement No. 
125 and Marketing 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 marketing order and is comprised of producers operating 
within the production area.
    The Department of Agriculture (USDA) is issuing this final 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 final 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 a marketing order may file with USDA a 
petition stating that the marketing order, any provision of the 
marketing order, or any obligation imposed in connection with the 
marketing order is not in accordance with law and request a 
modification of the marketing 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 final rule eliminates the standard weight certification 
requirement established under the Order. This action will relieve 
handlers from the time and cost associated with tomato inspection for 
standard weight certification at handling facilities. The Committee 
unanimously approved this recommendation at public meetings held on 
August 24, 2018, and 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 establishes that Sec.  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.
    The Committee met on August 24, 2018, and 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. To comply with 
standard weight certification procedures, an additional 28 containers 
should be weighed. To

[[Page 59290]]

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 7 CFR 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. 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 that 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 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 will 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 will not 
modify that requirement.
    With this action, FSIS will still sample the required containers to 
perform size and grade inspection along with recording the weights from 
each sample. FSIS shall 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 will 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 will 
provide ample information regarding the container weights for each lot. 
Further, eliminating the standard weight requirement will 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 
action changes the container requirements.

Final 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 final 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 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

[[Page 59291]]

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 final rule eliminates the standard weight certification 
requirement under the Order. The Committee determined there is no 
longer enough benefit to justify the cost and time required for the 
standard weight certification. This action will enable handlers to 
reduce inspection time and labor costs associated with the standard 
weight program. This rule revises Sec.  966.323. Authority for these 
changes is provided in Sec.  966.52.
    It is not anticipated that this action will impose additional costs 
on handlers or growers, regardless of size. This action is 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. 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 will 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 will reduce expenses for the Florida tomato industry. 
This action will 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 will save his handling operation $80,000 every year. This 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 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 enough 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 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 final rule will 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. As noted in the 
initial regulatory flexibility analysis, USDA has not identified any 
relevant Federal rules that duplicate, overlap, or conflict with this 
rule. No public comments were received regarding the initial regulatory 
flexibility analysis.
    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.
    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.
    A proposed rule concerning this action was published in the Federal 
Register on April 16, 2019 (84 FR 15528). Copies of the proposed rule 
were sent via email to Committee members and Florida tomato handlers. 
Additionally, the rule was made available through the internet by USDA 
and the Office of the Federal Register. A 30-day comment period ending 
May 16, 2019, was provided to allow interested persons to respond to 
the proposal.
    During the comment period, five comments were received in response 
to the proposal. Four of the comments favored the proposed change, but 
expressed some concerns over the potential impact of the change. Three 
of these comments supported the action from a financial and economic 
standpoint. Two commenters stated the net weight requirements were 
enough to ensure quality.
    The concerns raised included the impact on quality and labor. Two 
commenters were concerned about consumers receiving a quality product. 
One commenter supported lifting the regulation for small entities, but 
that inspection and certification be maintained for large entities. 
This action only removes the standard weight requirement. All lots of 
tomatoes will still be inspected for quality and net weight, helping to 
ensure consumers receive a consistent product meeting the established 
quality standards. In its discussions, the Committee indicated without 
a standard weight certification, the net weights will still be checked 
by the receiver and adjustments can be make accordingly. Further, 
eliminating the standard weight requirement will not preclude the 
handler from requesting a standard weight inspection if that is 
preferred by the customer.
    Two comments questioned the impact of this change on the labor 
force. During the Committee's deliberations, handlers described 
assigning some employees to assist in the process as a cost-saving 
measure compared to having FSIS provide additional staff to do the 
sampling. Committee members stated the current sampling rate is a 
costly, time-consuming process that is difficult

[[Page 59292]]

to maintain due to the handling volume in many operations. The 
Committee anticipates improved efficiency in inspection time and labor 
costs.
    One individual also recommended developing an alternative process 
for certification that could allow handlers to continue receiving 
certification. As previously stated, the Committee discussed 
alternative means for certification and determined the standard weight 
program no longer provided enough benefit to justify the cost and time 
required to develop that alternative.
    The remaining comment pertained to issues not applicable to the 
proposed rule. Accordingly, based on the comments received, no changes 
will be made to the rule as proposed.
    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.
    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.

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 
amended as follows:

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. Revise Sec.  966.110 to read as follows:


Sec.  966.110  Order.

    Order means Order No. 966 (Sec. Sec.  966.1 through 966.92) 
regulating the handling of tomatoes grown in Florida, also referenced 
in this part as marketing order and agreement.

0
3. Revise Sec.  966.111 to read as follows:


Sec.  966.111  Marketing Agreement.

    The Marketing Agreement associated with Order No. 966 is Marketing 
Agreement No. 125.

0
4. 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 regulation.

* * * * *
    (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 (7 CFR 51.1855 through 51.1877) effective 
October 1, 1991, as amended, or variations thereof specified in this 
section, provided that Sec.  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 this part and the U.S. tomato standards.

    Dated: September 23, 2019.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2019-21015 Filed 11-1-19; 8:45 am]
 BILLING CODE 3410-02-P