Oranges Grown in the Lower Rio Grande Valley in Texas and Imported Oranges; Proposed Suspension of Regulations for Domestic and Imported Oranges

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 906 and 944

[Docket No. FV-95-906-1PR]

Oranges Grown in the Lower Rio Grande Valley in Texas and

Imported Oranges; Proposed Suspension of Regulations for Domestic and

Imported Oranges

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed suspension of rule.

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SUMMARY: This document invites written comments on a proposal to

suspend, for the period July 1 through August 31, the handling

regulations for oranges grown in the Lower Rio Grande Valley in Texas

and the orange import regulations. Currently, the effective period for

both domestic and imported oranges is January 1 through December 31 of

each year. The purpose of the proposed suspension is to remove

unnecessary handling regulations applicable to shipments of Texas

oranges for the two month period July and August. The proposed

suspension of regulations applicable to imported oranges is necessary

under section 8e of the amended Agricultural Marketing Agreement Act of

1937.

DATES: Comments must be received by May 15, 1995.

ADDRESSES: Interested persons are invited to submit written comments

concerning this proposed suspension. Comments must be sent in

triplicate to the Docket Clerk, Fruit and Vegetable Division, AMS,

USDA, P.O. Box 96456, room 2523-S, Washington, D.C. 20090-6456, or by

facsimile at 202-720-5698. Comments should reference the docket number

and the date and page number of this issue of the Federal Register and

will be available for public inspection in the Office of the Docket

Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Charles L. Rush, Marketing Specialist,

Marketing Order Administration Branch, Fruit and Vegetable Division,

AMS, USDA, P.O. Box 96456, room 2523-S, Washington, DC 20090-6456;

telephone: 202-720-2431; or Belinda G. Garza, McAllen Marketing Field

Office, USDA/AMS, 1313 East Hackberry, McAllen, TX 78501; telephone:

210-682-2833.

SUPPLEMENTARY INFORMATION: This proposed suspension is issued under

Marketing Agreement and Order No. 906 (7 CFR Part 906) regulating the

handling of oranges and grapefruit [[Page 20060]] grown in the Lower

Rio Grande Valley in Texas, hereinafter referred to as the order. The

agreement and order are effective under the Agricultural Marketing

Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter

referred to as the ``Act.''

This proposed suspension is also issued pursuant to section 8e of

the Act, which requires the Secretary of Agriculture to issue grade,

size, quality, or maturity requirements for certain listed commodities

imported into the United States that are the same as, or comparable to,

those imposed upon the domestic commodities under Federal marketing

orders.

The Department of Agriculture (Department) is issuing this proposed

suspension in conformance with Executive Order 12866.

This proposed suspension has been reviewed under Executive Order

12778, Civil Justice Reform. This proposed suspension is not intended

to have retroactive effect. This action would not preempt any State or

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

irreconcilable conflict with this proposed suspension.

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.

There are no administrative procedures which must be exhausted

prior to any judicial challenge to the provisions of import regulations

issued under section 8e of the Act.

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. Import regulations issued under

the Act are based on domestic grade, size, quality or maturity

regulations established under Federal marketing orders.

There are approximately 15 handlers of oranges and grapefruit

regulated under the marketing order each season and approximately 750

orange and grapefruit producers in South Texas. In addition, there are

approximately 20 importers of oranges subject to the requirements of

the orange import requirements. Small agricultural service firms, which

include handlers and importers, have been defined by the Small Business

Administration (13 CFR Sec. 121.601) as those having annual receipts of

less than $5,000,000, and small agricultural producers are defined as

those whose annual receipts are less than $500,000. The majority of

these handlers, producers, and importers may be classified as small

entities.

Under the marketing order, oranges grown in the Lower Rio Grande

Valley in Texas are currently subject to a minimum grade requirement of

U.S. No. 2 and a minimum size requirement of 2\6/16\ inches in

diameter. These requirements are in effect throughout the year on a

continuous basis. The grade and size requirements for oranges grown in

the Lower Rio Grande Valley in Texas are found in Sec. 906.365 (7 CFR

part 906) under the order. In addition, there are container and pack

requirements found in Sec. 906.340.

The Texas Valley Citrus Committee (Committee), the agency

responsible for local administration of the order, meets prior to and

during each season to review the handling regulations effective on a

continuous basis for oranges regulated under the order. Committee

meetings are open to the public, and interested persons may express

their views at these meetings. The Department reviews Committee

recommendations and information, as well as information from other

sources, and determines whether modification, suspension, or

termination of the handling regulations would tend to effectuate the

declared policy of the Act.

The Committee met on March 9, 1995, and recommended by a 14 to 1

vote to relax the effective dates of the regulatory period for oranges

from continuous to July 15 through August 31, 1995, for one year.

Committee members limited the relaxation to one year because of

concerns about imported oranges being in commercial channels after

August 31, and the need to study the impact of such a change. The

Committee acknowledged that the Texas orange requirements only need to

be in effect when there are shipments of Texas oranges.

The Committee member who voted in opposition to the recommended

change expressed concern about the potential impact imported oranges

could have on the marketing of Texas oranges if substandard imports are

in commercial channels when the Texas orange shipping season begins.

However, this rule proposes that the quality and size regulations for

both Texas and imported oranges be in effect when the Texas shipping

season begins and all fruit handled during the Texas shipping season

would be subject to those requirements.

According to the Committee, Texas orange shipments typically begin

in mid to late September and end in mid to late June. The Texas citrus

industry has been in a vigorous recovery since the freeze of 1989.

Prior to the freeze, shipments of oranges during the 1986/87 season

totaled 1,334,548 cartons, shipments for the 1987/88 season totaled

2,240,181 cartons, and shipments for the 1988/89 season totaled

1,220,101 cartons. The 1989/90 shipping season ended in early January

1990 due to the harsh freeze. There was no commercial production or

shipments of oranges during the 1990/91 season due to the December 1989

freeze. Orange shipments were minimal during the 1991/92 season as the

recovery from the freeze of 1989 was still underway. Shipments for the

1992/93 season totaled approximately 688,000 cartons and shipments in

the 1993/94 season approximated 833,000 cartons. The Committee expects

the 1994/95 season to be an excellent year for orange production and

sales. A review of 1986/87 to 1993/94 Texas orange shipment data

revealed that the industry's shipping season consistently runs from

September through the following June. This pattern was consistent in

both pre-freeze and post-freeze seasons.

The Department reviewed the Committee's recommendation and

determined that the quality and size requirements for Texas oranges

should be suspended for the period July 1 through August 31, when there

are no Texas orange shipments. The regulatory period would begin in

September and end in June. There have been production changes over the

last five to six seasons. However, as mentioned above, the change in

production is a result of the freeze of 1989. The change

[[Page 20061]] in production has not resulted in a change in the

industry's shipping pattern. The industry's shipping pattern

consistently begins in September and ends in June. Although shipping

patterns have not changed to date, in the future there may be changes

in production and, therefore, we are proposing a suspension. An annual

evaluation will be conducted to determine the impact of the suspension

on the Texas orange industry. If it is determined that the suspension

has been deleterious to the Texas orange industry, necessary

modifications will be made.

Minimum grade and size requirements for fresh oranges grown in

Texas are in effect under Sec. 906.365 (7 CFR 906.365). This action

proposes suspending the provisions of Sec. 906.365 that apply to

oranges during the months of July and August.

Since the grade and size requirements for Texas oranges would be in

effect during the entire Texas shipping season, this change should not

have an adverse impact on the Texas orange industry.

Section 8e of the Act provides that when certain domestically

produced commodities, including oranges, are regulated under a Federal

marketing order, imports of that commodity must meet the same or

comparable grade, size, quality, and maturity requirements. Section 8e

further provides that whenever two or more marketing orders regulating

the same agricultural commodity produced in different areas of the

United States are concurrently in effect, the imports shall be subject

to the requirements applicable to the commodity produced in the area

with which the imported commodity is in most direct competition. The

Secretary has determined that oranges imported into the United States

are in most direct competition with oranges grown in Texas regulated

under M.O. No. 906, and has found that the minimum grade and size

requirements for imported oranges should be the same as those

established for oranges under M.O. No. 906.

Currently, imported oranges are subject to minimum grade and size

requirements under Sec. 944.312 (7 CFR 944.312). These requirements are

in effect on a continuous basis because domestic oranges are currently

subject to the minimum grade and size requirements under Marketing

Order No. 906 on a continuous basis. This rule proposes suspending

section 944.312(a) for the period July 1 through August 31 indefinitely

so that it would be effective September 1 through June 30, the same

time period that is being proposed for the Texas orange regulation.

According to the Department's Market News Branch, U.S. fresh orange

imports during the 1993/94 season (beginning November 1) totaled 37.2

million pounds, up nearly 60 percent from the 1992/93 total. The

increase is attributable to additional supplies from Australia as

compared with the prior season. Australia's largest shipments arrive in

July and August. By comparison, U.S. orange imports averaged 48.3

million pounds per season from 1988/89 through 1992/93, ranging from a

low of nearly 19 million pounds to 137.3 million pounds in 1990/91 when

domestic supplies were reduced following freeze damage to the

California crop. In both 1992/93 and 1993/94, Australia was the

principal source of fresh orange imports. Other sources of orange

imports were the Dominican Republic, whose largest shipments arrive in

August and September, Mexico, Israel, and Jamaica. In the 1992/93

season, Australia accounted for 10.1 million pounds, or 43 percent of

U.S. fresh orange imports and 20.7 million pounds, or 56 percent of the

U.S. total in 1993/94. Mexico is an important source of orange imports

during the fall and winter. Imports from Israel are most active during

the winter, with imports from other countries widely distributed

throughout the season.

This rule would result in relaxed import requirements because the

orange import regulations would not be in effect during the months of

July and August. This could result in reduced costs to importers. This

action should not have an adverse impact on the Texas industry,

however, because its shipping season does not begin until September.

Domestic producers will not be significantly impacted, since all

oranges in commercial channels during the domestic shipping season

would be subject to the same minimum grade and size requirements.

The purpose of these changes is to assure that applicable quality

requirements are in place only during such periods as needed by the

Texas orange industry to provide a consistent supply of oranges of

acceptable quality to fresh market outlets.

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

that this proposed rule would not have a significant economic impact on

a substantial number of small entities.

In accordance with section 8e of the Act, the United States Trade

Representative has concurred with the issuance of this proposed rule.

This proposed rule reflects the Department's appraisal of the need

to revise the dates of the regulatory period for imported oranges, as

hereinafter set forth, to effectuate the declared policy of the Act.

A comment period of 20 days is deemed appropriate because this rule

would relax requirements currently in effect, and to be of maximum

benefit it should be in effect by July 1, 1995.

List of Subjects

7 CFR Part 906

Oranges, Marketing agreements, Reporting and recordkeeping

requirements.

7 CFR Part 944

Avocados, Food grades and standards, Grapes, Imports, Kiwifruit,

Limes, Olives, Oranges.

For the reasons set forth in the preamble, 7 CFR parts 906 and 944

are proposed to be amended as follows:

PART 906--ORANGES GROWN IN THE LOWER RIO GRANDE VALLEY IN TEXAS

1. The authority citation for both 7 CFR parts 906 and 944

continues to read as follows:

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

Sec. 906.365 [Amended]

2. In Sec. 906.365, paragraph (a)(7) is added, reading as follows:

Sec. 906.365 Texas Orange and Grapefruit Regulation 34.

(a) * * *

(7) Beginning in 1995, this paragraph (a) is suspended each year

from July 1 through August 31.

* * * * *

PART 944--FRUITS; IMPORT REGULATIONS

Sec. 944.312 [Amended]

3. In Sec. 944.312, paragraph (a)(3) is added, reading as follows:

Sec. 944.312 Orange import regulation.

(a) * * *

(3) Beginning in 1995, this paragraph (a) is suspended each year

from July 1 through August 31.

* * * * *

Dated: April 18, 1995.

Sharon Bomer Lauritsen,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 95-9970 Filed 4-21-95; 8:45 am]

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