Limes Grown in Florida and Imported Limes; Increase in the Minimum Size Requirement

SUMMARY: This proposed rule invites comments on a proposed increase in

the current minimum size requirement for limes grown in Florida and for

limes imported into the United States. The Florida Lime Administrative

Committee (Committee), is the agency responsible for the local

administration of the marketing order covering limes grown in Florida.

This rule would increase the minimum size requirement from 1 7/8 inches

to 2 inches in diameter during the period of January 1 through May 31.

Larger fruit tend to have a higher juice content. Therefore, the

increase in fruit size would enable handlers to meet the 42 percent

juice content requirement specified in the regulations for limes

shipped to the fresh market. The changes in import requirements are

necessary under section 8e of the Agricultural Marketing Agreement Act

of 1937.

DATES: Comments must be received by October 4, 1996.

ADDRESSES: Interested persons are invited to submit written comments

concerning this proposal. Comments should 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 or by FAX at (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: Caroline C. Thorpe, Marketing Order

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

Box 96456, room 2522-S, Washington, DC 20090-6456; telephone: 202-720-

5127; or Aleck J. Jonas, Southeast Marketing Field Office, USDA/AMS,

P.O. Box 2276, Winter Haven, Florida 33883; telephone: 813-299-4770.

Small businesses may request information on compliance with this

regulation by contacting: Jay Guerber, Marketing Order Administration

Branch, Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456, room

2523-S, Washington, D.C. 20090-6456; telephone: 202-720-2491, Fax #

202-720-5698.

SUPPLEMENTARY INFORMATION: This proposed rule is issued under Marketing

Agreement and Order No. 911 (7 CFR Part 911), as amended, regulating

the handling of limes grown in Florida, hereinafter referred to as the

``order.'' 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.''

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

requires the Secretary of Agriculture to issue grade, size, quality, or

maturity requirements for certain listed commodities, including limes,

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

those imposed upon the domestic commodities regulated under the Federal

marketing orders.

The Department of Agriculture (Department) is issuing this proposed

rule in conformance with Executive Order 12866.

This proposed rule has been reviewed under Executive Order 12988,

Civil Justice Reform. This action is not intended to have retroactive

effect. This proposed 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 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 approximately 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. Interested persons are invited to submit information

on the regulatory and informational impacts of this action on small

businesses.

This rule proposes an increase in the minimum size requirement for

Florida and imported limes, which could impose some additional costs on

handlers and importers, including small entities. However, any

additional costs

[[Page 40551]]

will not impose a significant economic impact. The minimum size

requirement would be applied to both small and large handlers and

importers in the same way. With an increase in the minimum size, the

larger limes are more likely to meet the 42 percent minimum juice

content requirement. This change is expected to reduce the incidence of

repacking and may lower costs to handlers and importers. Increasing the

minimum size would also ensure that such limes would be more mature and

have a higher juice content, which would encourage repeat purchases by

consumers. This increase in quality to the consumer is expected to

increase returns to handlers, importers, and producers. Therefore, AMS

has determined that this action would not have a significant economic

impact on a substantial number of small entities.

Section 911.48 of the lime marketing order provides authority to

issue regulations establishing specific pack, 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, the minimum

size requirement for Florida limes is that they measure at least 1\7/8\

inches in diameter.

The destruction caused by Hurricane Andrew in 1992 has drastically

reduced the lime acreage in Florida from 6,500 acres to approximately

1,500 acres. During the 1991-92 season, prior to Hurricane Andrew,

1,682,677 bushels of limes were assessed. For the 1993-94 season,

assessments were collected on 228,455 bushels, and for the 1994-95

season, assessments were collected on 283,977 bushels of limes. These

factors led the Committee to reconsider current marketing order

requirements, including the 1\7/8\ inches in diameter size requirement.

The Committee met on January 10, 1996, and recommended to increase

the minimum size requirement for Florida limes from 1\7/8\ inches to 2

inches in diameter during the period of January 1 through May 31. The

recommendation passed by a vote of seven in favor to one opposed. The

one dissenting voter did not comment on why he was opposed to the

increase.

Florida lime production and the quantity of lime imports into the

United States reach their lowest point from January through May. During

the 1994-95 season, 32,035 bushels of Florida limes and 2,402,987

bushels of imported limes, were shipped to the fresh market during the

January through May production period. In comparison, 257,178 bushels

of Florida limes and 5,980,669 bushels of imported limes, were shipped

to the fresh market during the peak production period of June through

December.

During the January through May period, prices are generally higher

while lime quality is lower. Market demand however, remains the same as

in the peak production period. These factors have resulted in an

incentive to pack low quality fruit. Also, the juice content

requirement for limes shipped to the fresh market is 42 percent.

Handlers have had difficulty meeting the requirement during the low

production period because limes are less mature and have thicker skins.

The thicker-skinned limes tend to have lower juice content.

Limes that are 2 inches or larger in diameter have a higher juice

content than smaller limes. The larger limes, therefore, have a greater

chance of meeting the 42 percent juice content requirement. Increasing

the minimum size to 2 inches in diameter would therefore result in more

fresh limes meeting the 42 percent juice content requirement. These

limes would pass inspection without the expense of repacking and

regrading the fruit which would reduce handling costs.

The increase would have a positive cost effect on consumers because

it would allow handlers of limes to provide the consumer with higher

quality fruit at a reasonable cost. According to the Committee, the

industry's past sales records indicate that consumers have a preference

for the larger sized limes. Producers and importers of limes would also

benefit by experiencing higher return rates.

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 increase the minimum size requirement for Florida limes, a

corresponding change would also apply to imports.

In a separate rulemaking action, the Department is proposing to

reduce the regulatory period for Florida limes and limes imported into

the United States. The proposed action 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.

Minimum grade, size, quality, and maturity requirements for limes

imported into the United States are currently in effect under

Sec. 944.209 (7 CFR 944.209). This proposal would increase the minimum

size requirement for imported limes from 1\7/8\ inches to 2 inches in

diameter during the period of January 1 through May 31. This rule would

result in more imported limes passing the 42 percent juice content

requirement, providing higher quality fruit at a reasonable cost.

The largest exporter of limes to the United States is Mexico, with

the heaviest volumes of lime shipments occurring between June 1 and

December 31. Mexico exported 6,075,685 bushels of fresh limes to the

United States during the 1994-95 season, while other import sources

shipped a total of 201,053 bushels, combined.

The 1\7/8\ inches in diameter size requirement is not specifically

stated in the lime import regulation. Therefore, no change is needed in

the text of Sec. 944.209.

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

Representative has concurred with the issuance of this proposed rule.

Interested persons are invited to submit comments on this proposal.

A 60-day comment period is deemed appropriate because all parties need

time to ensure all comments are received in order to be of maximum

benefit to the lime industry during the January 1 through May 31

period.

List of Subjects in 7 CFR Part 911

Limes, Marketing agreements, Reporting and recordkeeping

requirements.

For the reasons set forth above, 7 CFR part 911 is 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. 911.344 [Amended]

2. In Sec. 911.344, paragraph (a)(3) the words ``at least 1 7/8

inches'' are revised to read ``at least 2 inches''.

Dated: July 31, 1996.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 96-19854 Filed 8-2-96; 8:45 am]

BILLING CODE 3410-02-P