Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida; Finalize Revised Special Purpose Shipment Exemption Provisions for Organic Citrus Fruit

SUMMARY: The Department of Agriculture (Department) is adopting as a

final rule, without change, the provisions of an interim final rule to

redefine the term ``Special Purpose Shipper'' to mean those persons who

handle citrus fruit which is certified as organically grown under

Florida law, and requires such persons to certify that they will limit

shipments of such fruit to outlets handling organically grown fruit.

This final rule more precisely defines organically grown Florida citrus

fruit, and is designed to increase the market for organic shipments.

The rule was unanimously recommended by the Citrus Administrative

Committee (committee), the agency responsible for local administration

of the marketing order.

EFFECTIVE DATE: September 26, 1994.

FOR FURTHER INFORMATION CONTACT: Caroline C. Thorpe, Marketing Order

Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O.

Box 96456, Room 2523-S, Washington, DC 20090-6456; telephone: 202-720-

5127; or William G. Pimental, Southeast Marketing Field Office, USDA/

AMS, P.O. Box 2276, Winter Haven, Florida 33883; telephone: 813-299-

4770.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing

Agreement No. 87 and Marketing Order No. 905 [7 CFR Part 905]

regulating the handling of oranges, grapefruit, tangerines, and

tangelos grown in Florida, hereinafter referred to as the order. This

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 Department is issuing this rule in conformance with Executive

Order 12866.

This final rule has been reviewed under Executive Order 12778,

Civil Justice Reform. This final rule is not intended to have

retroactive effect. This final rule will not preempt any state or local

laws, regulations, or policies, unless they present an irreconcilable

conflict with this rule.

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 the Secretary 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 requesting 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, the Secretary 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 in equity to review the

Secretary's ruling on the petition, provided a bill in equity is filed

not later than 20 days after the date of the entry of the ruling.

Pursuant to the requirements set forth in the Regulatory

Flexibility Act (RFA), the Administrator of the Agricultural Marketing

Service (AMS) has considered the economic impact of this action on

small entities.

The purpose of the RFA is to fit regulatory actions to the scale of

business subject to such actions in order that small businesses will

not be unduly or disproportionately burdened. Marketing orders issued

pursuant to the Act, and rules issued thereunder, are unique in that

they are brought about through group action of essentially small

entities acting on their own behalf. Thus, both statutes have small

entity orientation and compatibility.

There are about 100 Florida citrus handlers subject to regulation

under the marketing order covering oranges, grapefruit, tangerines, and

tangelos grown in Florida, and about 11,000 growers of these citrus

fruits in Florida.

Small agricultural service firms have been defined by the Small

Business Administration [13 CFR 121.601] as those having annual

receipts of less than $5,000,000, and small agricultural growers are

defined as those whose annual receipts are less than $500,000. A

minority of these handlers and a majority of the growers may be

classified as small entities.

An interim final rule was issued on May 18, 1994, and published in

the Federal Register [59 FR 26927, May 25, 1994], with an effective

date of May 25, 1994. That rule amended Secs. 905.146, 905.147, and

905.148 of the rules and regulations in effect under the order. That

rule provided a 30-day comment period which ended June 24, 1994. One

comment was received.

Mr. Joseph B. Procacci, Assistant Chairman, National Association of

Perishable Agricultural Receivers, filed a comment in support of the

revisions. He supports the revision in the regulation's definition of

Special Purpose Shippers to include Florida's new certification process

of organic producers. He stated it is crucial in preserving the

integrity of the organic citrus industry. He also expressed support for

the regulation's requirement that such shippers also certify that they

will limit organic shipments to organic outlets.

The order for Florida citrus provides for the establishment of

minimum grade and size requirements. The minimum grade and size

requirements are designed to provide fresh markets with fruit of

acceptable quality, thereby maintaining consumer confidence for fresh

Florida citrus. This helps create buyer confidence and contributes to

stable marketing conditions. This is in the interest of producers,

packers, and consumers, and is designed to increase returns to Florida

citrus growers.

The cultural practices of producers of organically grown citrus

differ from normal industry practices. Because of these differences,

organically grown fruit is usually required to meet a different grade

standard under the marketing order. This grade standard pertains only

to the external characteristics of the fruit, not the internal quality.

The different grade standard is needed to facilitate the marketing

of organic citrus. There are indications that organically grown citrus,

from a marketing standpoint, are a different commodity than

conventionally grown citrus. Organic citrus generally has higher

external damage. Organic fruit for the most part is marketed

differently, is not mixed with non-organic fruit, appeals only to

certain consumers, and is in many respects, a specialized commodity.

The interim final rule also more precisely defined organic fruit,

and the type of market outlets which organically grown fruit could be

sold in, free from certain requirements imposed under the order. These

changes were unanimously recommended by the committee at its November

16, 1993, meeting.

Sections 905.146, 905.147, and 905.148 of the regulations provide

terms and conditions under which shippers may ship organically grown

Florida citrus fruit, as Special Purpose Shippers, with a conditional

release from certain grade requirements issued under Sec. 905.52 of the

order.

When the provisions concerning special purpose shipments were made

effective in 1978, there were no laws governing organic fruit and

vegetable growers in Florida. A ``Special Purpose Shipper'' was defined

under the marketing order as one who had certified that they would

handle only citrus fruit which they knew from their own personal

knowledge was produced on trees on which only compost, non-acidulated

fertilizer such as rock phosphate, dolomite, or ground limestone is

used, and to which no chemical insecticide or fungicide had been

applied. However, the State of Florida now requires all organically

grown fruits and vegetables to be certified. Accordingly, the committee

has recommended redefining the term ``Special Purpose Shipper'' in

Sec. 905.146 to mean a person who handles Florida citrus fruit that is

certified by a Florida Department of Agriculture and Consumer Services

licensed certifying agent as organically grown under Florida law. This

definition reflects that organic fruit has been certified under Florida

law, and also provides additional assurance that shippers claiming

organic status and utilizing the grade standards for organic fruit

qualify to do so.

Under Florida law, the Florida Department of Agriculture and

Consumer Services licenses independent third parties to act as

certifying agents. Growers who intend to sell organic fruit make an

application to a certifying agent. The certifying agent inspects and

certifies a grower's acreage as being in accordance with Florida law

and issues the grower a certificate. The certificate number is

transferred to a trip ticket which accompanies any shipments of fruit

grown on the certified acreage. When the handler receives the shipment,

a copy of the trip ticket is provided to the state inspector indicating

that the fruit is certified organic and can be packed using the

applicable organic grade standards.

The committee also recommended that Sec. 905.146 be revised to

require Special Purpose Shippers to certify that they will limit their

shipments of organically grown citrus fruit to outlets handling

organically grown fruits. The interim final rule replaced the

requirement that only outlets registered and approved by the committee

could receive such fruit and ended the requirement that receivers of

special purpose shipments complete the applicable sections of the

Report of Special Purpose Shipments form.

The language in Secs. 905.146, 905.147, 905.148 concerning

Certificates of Privilege is being revised for clarity, and procedural

safeguards are being added to Sec. 905.147(c) dealing with suspensions

or denials of Certificates of Privilege.

This rule reflects the committee's and the Department's appraisal

of the need to finalize the revised exemption provisions for special

purpose shipments, as specified. The Department's view is that this

rule may have a beneficial impact on growers and shippers of organic

citrus fruit.

Based on the above, the Administrator of the AMS has determined

that this rule will not have a significant economic impact on a

substantial number of small entities.

In accordance with the Paperwork Reduction Act of 1980 [44 U.S.C.

chapter 35], the information collection requirements that are contained

in this rule have been previously approved by the Office of Management

and Budget (OMB) and have been assigned OMB number 0581-0094. This

action will reduce the reporting burden on approximately 95 receivers

of special purpose shipments of Florida citrus completing a section of

the Report of Special Purpose Shipments form, taking about .04 hour to

complete each report.

After consideration of all relevant material presented, including

the Committee's recommendation, and other available information, it is

found that finalizing the interim final rule, without change, as

published in the Federal Register [59 FR 26927, May 25, 1994] will tend

to effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 905

Grapefruit, Marketing agreements, Oranges, Reporting and

recordkeeping requirements, Tangelos, Tangerines.

For the reasons set forth in the preamble, 7 CFR Part 905 is

amended as follows:

PART 905--ORANGES, GRAPEFRUIT, TANGERINES, AND TANGELOS GROWN IN

FLORIDA

Accordingly, the interim final rule amending 7 CFR Part 905 which

was published at FR 59 26927, on May 25, 1994, is adopted as a final

rule without change.

Dated: August 22, 1994.

Eric M. Forman,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 94-21085 Filed 8-25-94; 8:45 am]

BILLING CODE 3410-02-P