Termination of Marketing Order 971; Lettuce Grown in the Lower Rio Grande Valley in South Texas

SUMMARY: This action terminates the Federal marketing order for lettuce

grown in the Lower Rio Grande Valley in South Texas (order) and the

rules and regulations issued thereunder. The Secretary of Agriculture

(Secretary) has determined that the order no longer tends to effectuate

the declared policy of the Agricultural Marketing Agreement Act of 1937

(Act). In recent years, this industry has declined significantly in

numbers of producers and handlers. In 1980, there were 42 producers and

11 handlers. In 1992, there were three producers and one handler. All

known commercial production and handling of South Texas lettuce has

ceased since 1992 and there are no indications that the industry will

be revived.

EFFECTIVE DATE: July 14, 1995.

FOR FURTHER INFORMATION CONTACT: Jim Wendland, Marketing Order

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

Box 96456, room 2523-S, Washington, DC 20090-6456, telephone 202-720-

2170, or Belinda G. Garza, McAllen Marketing Field Office, Fruit and

Vegetable Division, AMS, USDA, 1313 East Hackberry, McAllen, Texas,

78501, telephone 210-682-2833.

SUPPLEMENTARY INFORMATION: This action is governed by the provisions of

section 8c(16)(A) of the Agricultural Marketing Agreement Act of 1937,

as amended (7 U.S.C. 601-674), hereinafter referred to as the Act.

The Department of Agriculture (Department) is issuing this action

in conformance with Executive Order 12866.

This termination order has been reviewed under Executive Order

12778, Civil Justice Reform. This action is not intended to have

retroactive effect. This termination order 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 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 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 a 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 date of the entry of the ruling.

Pursuant to 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.

In recent years, this industry has declined significantly in

numbers of producers and handlers. During the first year the order was

in effect, there were 68 producers and 31 handlers. In 1980, there were

42 producers and 11 handlers. In 1992, there were three producers and

one handler. All known commercial production and handling of South

Texas lettuce has since ceased. Small agricultural producers have been

defined by the Small Business Administration (13 CFR 121.601) as those

having annual receipts of less than $500,000, and small agricultural

service firms are defined as those whose annual receipts are less than

$5,000,000. The majority of the former South Texas lettuce producers

and handlers had been classified as small entities.

The South Texas Lettuce Committee (committee) met on May 29, 1991,

and unanimously recommended that the order's handling regulation that

was currently in effect be suspended for the 1991-92 lettuce marketing

period. The recommendation was made to eliminate the continued expense

of administering the order. The Department issued an interim final

rule, which was published in the October 31, 1991, issue of the Federal

Register (56 FR 55986). The rule suspended the 1991-92 handling

regulation in effect under the order and invited public comment through

December 2, 1991. No comments were received.

On July 13, 1992, the Department issued a suspension order, which

was published in the July 17, 1992, issue of the Federal Register (57

FR 31631). The action suspended all of the provisions of and

established pursuant to the order from July 17, 1992, through July 17,

1995, because the Secretary determined that the order no longer tended

to effectuate the declared policy of the Act. The action also indicated

that, during this period, the Department would monitor lettuce

production and the number of active producers and handlers in the

production area. At the end of that period an evaluation would be made

by the Secretary on whether there was a revival in lettuce production

and whether to reactivate the order or begin termination proceedings.

As an interim step in this evaluation, in December 1992, the

Department conducted a survey of former industry handlers to determine

whether they expected a revival of South Texas lettuce production in

the next two years, and if not, whether they wanted a refund of excess

reserve funds prior to the end of the evaluation period.

The overwhelming consensus of the respondents was that they did not

plan to resume lettuce production and the

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handlers wanted all but $3,000 of the reserve fund to be refunded to

them as soon as practicable. On February 26, 1993, the Department

issued refund checks totaling approximately $25,000 to handlers based

on their pro rata share of assessments paid during the 1988-89 through

1990-91 marketing seasons. The remaining $3,000 reserve was considered

sufficient to cover unforeseen expenses during the period of suspension

and to cover necessary expenses of liquidation in the event the

marketing order would be terminated.

Commercial production and handling of South Texas lettuce ceased in

1992; there are currently no indications that the industry will be

revived. Without a sufficient number of producers and handlers, it is

impossible for the Secretary to appoint the required committee or

otherwise continue the operation of the order.

Therefore, based on the foregoing considerations, pursuant to

section 8c(16)(A) of the Act and Sec. 971.84 of the order, it is found

that Marketing Order No. 971, covering lettuce grown in the Lower Rio

Grande Valley in South Texas, does not tend to effectuate the declared

policy of the Act and is hereby terminated. The trustees appointed by

the Secretary shall continue in the capacity of concluding and

liquidating the affairs of the former committee, until discharged by

the Secretary.

Section 8c(16)(A) of the Act requires the Secretary to notify

Congress 60 days in advance of the termination of a Federal marketing

order. Congress was so notified on March 15, 1995.

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 additional preliminary notice, or to engage in

further procedure with respect to this action, because: (1) This action

relieves all restrictions on handlers by terminating the provisions of

part 971; (2) in 1992, the Department issued a rule suspending all

provisions of the order for two years to allow sufficient time for a

possible revival of the lettuce industry before termination of the

order; and (3) such commercial lettuce production and handling cease in

1992 and when former industry members were polled, they did not expect

a revival of the industry, and the consensus was that the order should

be terminated.

List of Subjects in 7 CFR Part 971

Lettuce, Marketing agreements, Reporting and recordkeeping

requirements.

PART 971--[REMOVED]

1. The authority citation for 7 CFR part 971 continues to read as

follows:

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

2. Accordingly, 7 CFR part 971 is removed.

Dated: June 6, 1995.

David R. Shipman,

Acting Deputy Assistant Secretary, Marketing and Regulatory Programs.

[FR Doc. 95-14473 Filed 6-12-95; 8:45 am]

BILLING CODE 3410-02-P