Agricultural Marketing Service

SUMMARY: This proposal invites comments on proposed changes to the

regulatory period currently prescribed under the lime marketing order

and the lime import regulations. The marketing order regulates the

handling of limes grown in Florida and is administered locally by the

Florida Lime Administrative Committee (committee). This rule would

modify language in both the domestic and import regulations to change

the regulatory period to January 1 through May 31, from its current

continuous, year round, implementation. This proposed rule is in

response to changes in the market, rising costs of production and the

cost of replanting in the aftermath of Hurricane Andrew. By reducing

the regulatory period and its associated costs, this rule should

decrease industry expenses. The changes in import requirements are

necessary under section 8e of the Agricultural Marketing Agreement Act

of 1937.

DATES: Comments must be received by June 7, 1996.

ADDRESSES: Interested persons are invited to submit written comments

concerning this proposal. Comments must be sent in triplicate to the

Docket Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525-S,

P.O. Box 96456, Washington, DC 20090-6456, FAX Number (202) 720-5698.

All 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: Aleck Jonas, Southeast Marketing Field

Office, Marketing Order Administration Branch, F&V, AMS, USDA, P.O. Box

2276, Winter Haven, Florida 33883; telephone: (941) 299-4770; or

Britthany Beadle, Marketing Order Administration Branch, F&V, AMS,

USDA, room 2522-S, P.O. Box 96456, Washington, DC 20090-6456:

telephone: (202) 720-3923.

SUPPLEMENTARY INFORMATION: This proposal is issued under Marketing

Agreement and Marketing Order No. 911 (7 CFR part 911), as amended,

regulating the handling of limes, 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.''

This proposed rule is also issued under section 8e of the Act,

which provides that whenever certain specified commodities, including

limes, are regulated under a Federal marketing order, imports of these

commodities into the United States are prohibited unless they meet the

same or comparable grade, size, quality, or maturity requirements as

those in effect for the domestically produced commodities.

The Department of Agriculture (Department) is issuing this rule in

conformance with Executive Order 12866.

This proposed rule has been reviewed under Executive Order 12778,

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

retroactive effect. This proposal 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 his or her

principal place of business, has jurisdiction in equity to review the

Secretary's ruling on the petition, provided an action is filed not

later than 20 days after 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 the requirements set forth in the Regulatory

Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has

considered the economic impact of this proposed rule 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 those established under Federal marketing orders.

There are approximately 10 handlers subject to regulation under the

order and about 30 producers of Florida limes. There are approximately

35 importers of limes. Small agricultural service firms, which include

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

Administration (13 CFR 121.601) as those whose annual receipts are less

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

whose annual receipts are less than $500,000. A majority of these

handlers, producers, and importers may be classified as small entities.

This proposed rule invites comments on a change to the regulatory

period currently prescribed under the Florida lime marketing order.

This rule would modify language in the order's rules and regulations to

change the regulatory period from its current continuous, year round,

implementation to January 1 through May 31. This change was recommended

by the committee on a vote of 6 supporting and 4 against.

Section 911.48 of the lime marketing order provides authority to

issue regulations establishing specific pack,

[[Page 20755]]

container, grade and size requirements. These requirements are

specified under Secs. 911.311, 911.329 and 911.344. Section 911.51

requires inspection and certification that these requirements are met.

Currently, there is no regulatory period stated in the order, and the

regulations are applied on a continuous year-round basis.

There is general agreement in the industry for the need to reduce

costs and increase grower returns under the current market conditions.

The committee made this recommendation to decrease industry expenses by

reducing the regulatory period and its associated costs. Prior to

Hurricane Andrew, there were approximately 6,500 producing acres of

limes in the production area. Currently, there are approximately 1,500

acres of producing lime trees in the production area. Growers are

expending approximately $2,500 per acre to plant new groves and replant

lost ones. They are also spending approximately $1,500 per acre per

year to maintaining new groves of young trees which will not produce

fruit for several years, thus, giving no return for investment. During

the 1991-1992 season prior to Hurricane Andrew, assessments were

collected on 1,682,677 bushels. In the 1993-1994 and the 1994-1995

seasons after the storm, assessments were collected on 228,455 bushels

and 283,977 bushels respectively. Lost income from reduced volume and

the costs of replanting and maintaining groves, with no immediate

monetary return, has caused the industry to seek cost saving measures.

Historically, the June 1 through December 31 time period is a time

when fruit is plentiful, prices are low, and the overall quality of the

crop is good for both domestic and imported supplies. The committee

maintains that under these abundant and good quality fruit conditions,

competition and market demand will keep quality standards high.

Conversely, during the time period, January 1 through May 31, past

seasons have shown that for both domestic and imported fruit, skins are

thicker, the juice content is lower and supplies of fruit are limited.

Because the temptation to ship poor quality is greater under these high

demand and low supply conditions, the committee believes regulations

are necessary to prevent poor quality fruit from entering and damaging

the lime market. Therefore, the committee believes that for the period

June 1 through December 31, pack, container, grade and size regulations

can be ended. Competition under good quality and high supply conditions

should protect the consumer from poor quality fruit entering the market

during the proposed deregulated period. The application of regulations

from January 1 through May 31, will insure uniform quality throughout

the year.

Growers, handlers and importers should benefit from the reduced

costs of no regulations, such as no inspection fees during the

deregulated period. Committee expenses should also be reduced by

requiring fewer meetings and less compliance monitoring. Reporting

requirements are not affected by this change and will continue to be

collected year-round.

One alternative to the proposed rule was to leave the regulations

in place year-round. This alternative was rejected by the committee

because the need to take some action was considered necessary under the

current market conditions. It was argued that when these regulations

were put in place, the quality of both the domestic and imported lime

supply varied greatly. Over the years, improved agricultural practices

have produced a consistent high quality lime supply. This is

particularly true during the June through December time period. The

majority of committee members believe that the regulations are

unnecessary when there is such a large supply of high quality fruit.

Another alternative raised was to terminate the marketing order.

Although seriously considered, committee members rejected the idea

under arguments that during the January through May time period when

supplies are reduced and juice content of all limes is lower, poor

quality fruit could enter the market. Consumer dissatisfaction with

poor quality limes could lead to product rejection and substitution

with lemons, causing a lost market share. This proposed rule represents

a compromise of the two alternatives presented. The committee believes

that this change will provide the consumer with quality fruit

throughout the year, while reducing industry costs.

Section 8e of the Act provides that when certain domestically

produced commodities, including limes, are regulated under a Federal

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

comparable grade, size, quality, and maturity requirements. Since this

rule would change the regulatory period under the domestic handling

regulations, a corresponding change to the import regulations must also

be considered.

Minimum grade and size requirements for limes imported into the

United States are currently in effect under Sec. 944.209 (7 CFR

944.209). This proposed rule would modify language in the import

regulations to change the regulatory period from its current

continuous, year round, implementation to January 1 through May 31.

This rule would result in relaxed import requirements because the lime

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

through December. This could result in reduced costs to importers.

Mexico is the largest importer of limes into the United States.

During the 1994-95 season, Mexico imported 6,075,685 bushels into the

United States, while all other import sources shipped a combined total

of 201,053 bushels during the same time period. The majority of Mexican

imports enter the United States between June 1 and December 31, the

proposed deregulated period covered in this rule.

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

Representative has concurred with the issuance of this proposed rule,

as it pertains to limes imported into the United States.

Based on available information, the Administrator of the AMS has

determined that this action would not have a significant economic

impact on a substantial number of small entities.

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

7 CFR Part 911

Limes, Marketing agreements, Reporting and recordkeeping

requirements.

7 CFR Part 944

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

Kiwifruit, Limes, Olives, Oranges.

For the reasons set forth in the preamble, 7 CFR parts 911 and 944

are proposed to be amended as follows:

1. The authority citation for 7 CFR part 911 continues to read as

follows:

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

PART 911--LIMES GROWN IN FLORIDA

Sec. 911.311 [Amended]

2. In Sec. 911.311, paragraph (a), introductory text, is amended by

removing the words ``No handler'' and adding in its place the words

``From January 1 through May 31 of each season, no handler''.

[[Page 20756]]

Sec. 911.329 [Amended]

3. In Sec. 911.329, paragraph (a) is amended by removing the words

``No handler'' and adding in its place the words ``From January 1

through May 31 of each season, no handler''.

Sec. 911.344 [Amended]

4. In Sec. 911.344, paragraph (a), is introductory text, is amended

by removing the words ``No handler'' and adding in its place the words

``From January 1 through May 31 of each season, no handler''

PART 944--FRUITS, IMPORT REGULATIONS

5. In Sec. 944.209, paragraph (a) is revised to read as follows:

Sec. 944.209 Lime Import Regulation 10.

(a) Applicability to imports. Pursuant to section 8e of the act and

Part 944-Fruits; Import Regulations, the importation into the United

States from January 1 through May 31 of any limes is prohibited unless

such limes meet the minimum grade and size requirements specified in

Sec. 911.344 Florida Lime Regulation 43.

* * * * *

Dated: May 2, 1996.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 96-11460 Filed 5-7-96; 8:45 am]

BILLING CODE 3410-02-P