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

DEPARTMENT OF AGRICULTURE

7 CFR Parts 911

[Docket No. FV96-911-1 FR]

Limes Grown in Florida and Imported Limes; Increase in the

Minimum Size Requirement

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule increases the current minimum size requirement

for limes grown in Florida and for limes imported into the United

States. This change was recommended by the Florida Lime Administrative

Committee (Committee), the agency responsible for the local

administration of the

[[Page 64256]]

marketing order covering limes grown in Florida. This rule increases

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 will

enable handlers to better 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.

EFFECTIVE DATE: This final rule becomes effective January 3, 1997.

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

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

Box 96456, room 2525-S, Washington, DC 20090-6456; telephone: 202-720-

5127, or Fax # 202-720-5698; or Aleck J. Jonas, Southeast Marketing

Field Office, USDA/AMS, P.O. Box 2276, Winter Haven, Florida 33883;

telephone: 941-299-4770, or Fax # 941-299-5169. 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, DC 20090-

6456; telephone: 202-720-2491, Fax # 202-720-5698.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing

Agreement No. 126 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 final

rule in conformance with Executive Order 12866.

This final rule has been reviewed under Executive Order 12988,

Civil Justice Reform. This action 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 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 final 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.

This rule increases 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

are minimal and will not impose a significant economic impact. The

minimum size requirement will be applied to both small and large

handlers and importers in proportion to this. 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, resulting in lower costs to handlers and

importers. Increasing the minimum size also ensures that such limes

will be more mature and have a higher juice content, which encourages

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 will 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 Sections 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

[[Page 64257]]

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.

This rule needs to be effective by January 1, 1997, because 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 is expected to result in more

fresh limes meeting the 42 percent juice content requirement. These

limes are more likely to pass inspection without the expense of

repacking and regrading the fruit which will reduce handling costs.

The increase in minimum size has a positive cost effect on

consumers because it allows 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 will 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 increases the minimum size requirement for Florida limes, a

corresponding change also applies to imports.

In a separate rulemaking action, as finalized in the Federal

Register on August 21, 1996 (61 FR 43141), the Department reduced the

regulatory period for Florida limes and limes imported into the United

States. That action modified language in both the domestic and import

regulations to change the regulatory period to January 1 through May 31

from a 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 rule increases 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. By increasing

the minimum size, this rule will 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.

The proposed rule concerning this action was issued on July 31,

1996, and was published in the August 5, 1996, Federal Register (61 FR

40551), with a 60-day comment period ending October 4, 1996. No

comments were received. However, a request to extend the comment period

to October 31, 1996, was received. This request was denied as the

proposed rule already had an extended 60-day comment period. Therefore,

the Department continues to believe that this was sufficient time to

file comments. This rule needs to be implemented by January 1. Due to

market conditions, the period from January through May is when the

prices for limes tend to be higher and the quality of limes tends to be

lower. This creates an incentive to pack low quality fruit that can

hurt the marketing of limes. Because of this situation, the Department

has determined not to reopen the comment period.

After thoroughly analyzing the comments received and other

available information, the Department has concluded that this final

rule is appropriate.

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

Representative has concurred with the issuance of this final rule.

After consideration of all relevant matter presented, including the

information and recommendations submitted by the Committee and other

available information, it is hereby found that this rule, as

hereinafter set forth, will tend to effectuate the declared policy of

the Act.

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 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 Section 911.344, paragraph (a)(3) the words ``at least 1\7/8\

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

Dated: November 27, 1996

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 96-30860 Filed 12-3-96; 8:45 am]

BILLING CODE 3410-02-P