Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida; Procedures to Limit the Volume of Small Florida Red Seedless Grapefruit

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 905

[Docket No. FV96-905-2FR]

Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida;

Procedures to Limit the Volume of Small Florida Red Seedless Grapefruit

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule adds a section to the rules and regulations

currently prescribed under the marketing order for oranges, grapefruit,

tangerines, and tangelos grown in Florida. The marketing order is

administered locally by the Citrus Administrative Committee

(committee). This rule establishes procedures for limiting the volume

of small red seedless grapefruit entering the fresh market during the

first 11 weeks of each season. The committee believes these procedures

could be used, when necessary, to help stabilize the market and improve

grower returns.

EFFECTIVE DATE: January 30, 1997.

FOR FURTHER INFORMATION CONTACT: William G. Pimental, Southeast

Marketing Field Office, AMS, USDA, P.O. Box 2276, Winter Haven, Florida

33883-2276; telephone: (941) 299-4770, Fax: (941) 299-5169; or Caroline

Thorpe, Marketing Order Administration Branch, Fruit and Vegetable

Division, AMS, USDA, P.O. Box 96456, Room 2522-S, Washington, D.C.

20090-6456; telephone: (202) 720-8139, Fax: (202) 720-5698. 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 and Marketing Order No. 905 (7 CFR Part 905), as amended,

regulating the handling of oranges, grapefruit, tangerines, and

tangelos 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.''

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 rule 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 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.

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.

There are approximately 100 handlers subject to regulation under

the marketing order and approximately 11,000 producers of citrus in the

regulated area. Small agricultural service firms, which include

handlers, have been defined by the Small Business Administration (13

CFR

[[Page 69012]]

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. The majority of these handlers and

producers of citrus grown in Florida may be classified as small

entities.

This final rule adds procedures to the rules and regulations

sections of the order. It does not establish any volume regulation. Any

implementation of these procedures concerning regulation will require

further committee action and additional public rulemaking by the

Department.

However, if the procedures in this rule were used and volume

regulations established, all growers and handlers would be impacted

equitably. Before any implementation would occur, the committee would

meet and consider any and all economic data available. The goal of this

rule is to provide an additional tool, if needed, to help stabilize the

price of red grapefruit. In the past three seasons, during the period

covered by this rule, prices of red seedless grapefruit have fallen

from an average f.o.b. of $7.80 per box to an average f.o.b. of $5.50

per box. On tree prices for fresh red seedless grapefruit have declined

steadily from $9.60 per box during the 1989-90 season, to $3.45 per box

during the 1994-95 season. In many cases, prices during the past two

seasons have provided returns less than production costs. This price

reduction is forcing many small producers out of business. A stabilized

price that returns a fair market value would be beneficial to both

small and large producers and handlers.

Therefore, based on this information, the AMS has determined that

this action will not have a significant economic impact on a

substantial number of small entities.

The order provides for the establishment of grade and size

requirements for Florida citrus. These grade and size requirements are

designed to provide fresh markets with citrus fruit of acceptable

quality and size, thereby maintaining consumer confidence for fresh

Florida citrus. This helps create buyer confidence and contributes to

stable marketing conditions. This is in the interest of producers,

handlers, and consumers, and is designed to increase returns to Florida

citrus producers. The current minimum grade standard for red seedless

grapefruit is U.S. No. 1, and the minimum size requirement is size 56

(at least 3\5/16\ inches in diameter).

This rule establishes procedures for limiting the volume of small

red seedless grapefruit entering the fresh market during the first 11

weeks of each season. The red seedless grapefruit season runs from mid-

September to May. This rule provides an additional tool under the order

to help stabilize the market and improve returns to growers. These

changes were recommended by the committee at its meeting on May 24,

1996, by a 10 to 4 vote.

Section 905.52 of the Florida citrus marketing order provides

authority to limit shipments of any grade or size, or both, of any

variety of Florida citrus. Such limitations may restrict the shipment

of a portion of a specified grade or size of a variety. Under such a

limitation, the quantity of such grade or size that may be shipped by a

handler during a particular week shall be established as a percentage

of the total shipments of such variety by such handler in a prior

period, established by the committee and approved by the Secretary, in

which the handler shipped such variety. This rule adds Sec. 905.153 to

the rules and regulations, establishing a specified prior period and

other procedures necessary to limit the volume of small red seedless

grapefruit, sizes 48 and 56, entering the fresh market during the first

11 weeks of the season.

Currently, there are no limitations on the amount of size 48 and

size 56 red seedless grapefruit that can be shipped to market. This

rule in itself does not limit shipments, but outlines procedures to do

so if needed. Implementation of these procedures to limit shipments

would require further rulemaking.

The committee recommended this rule to address problems currently

facing the industry. For the past few seasons, returns on red seedless

grapefruit have been at all time lows, often not returning the cost of

production. Fifty-nine percent of red seedless grapefruit is shipped to

fresh market channels. There is a processing outlet for grapefruit not

sold into the fresh market. The vast majority of processing is

squeezing the grapefruit for juice. Because of the properties of the

juice of red seedless grapefruit, including problems with color, the

processing outlet is limited, and not currently profitable.

Several areas of new plantings in the southern growing region are

just beginning to bear fruit. Young trees normally produce mostly small

fruit when they first come into production. Florida producers and

handlers realize that these new acres will add to the abundance of

small sizes of red seedless grapefruit.

The committee believes that to stabilize the market and improve

returns to producers, demand for fresh red seedless grapefruit must be

stabilized and increased. One problem contributing to the current state

of the market is the excessive number of small sized grapefruit shipped

early in the marketing season. While there is a market for early

grapefruit, the shipment of large quantities of small red seedless

grapefruit in a short period, oversupplies the fresh market for these

sizes and negatively impacts the market for all sizes.

The committee believes that the overshipment of smaller sized red

seedless grapefruit early in the season has contributed to below

production cost returns for producers. Based on statistical information

from past seasons, there is an indication that once shipments of sizes

48 and 56 reach levels above 250,000 cartons a week, prices decline on

those and most other sizes of red seedless grapefruit. Thus, even

though later in the season the crop has sized to naturally limit the

amount of smaller sizes available for shipment, the price structure in

the market has already been negatively affected.

For the majority of the season, larger sizes return better prices

than smaller sizes. If these small grapefruit were allowed to remain on

the tree to increase in size and maturity, they could provide greater

returns to producers. Delaying the harvest of small sizes may also

extend the season, thereby increasing the total volume of fresh

shipments and improving producer returns. Without volume regulation,

the industry has been unable to limit the shipments of small sizes. The

committee believes that if shipments of small sizes could be maintained

at around 250,000 cartons a week, prices should stabilize and demand

for larger, more profitable sizes should increase.

Similar procedures to this rule are already in place for Dancy

tangerines under Sec. 905.152. While the committee has not utilized

these procedures for several years, they were successfully implemented

for several seasons.

Under these procedures, the authority to limit the shipment of

sizes 48 and 56 red seedless grapefruit will only be available for the

11-week period from the third Monday in September (week #1) through the

first Sunday in December (week #11), hereinafter called the regulatory

period. The committee recommended these weeks for regulation because

the majority of small sizes are shipped during this period. By the end

of the regulatory period, fruit has begun to size naturally, and there

are fewer small sizes available.

[[Page 69013]]

The committee may recommend that only a certain percentage of size

48 (3\9/16\ minimum diameter in inches) and size 56 (3\5/16\ minimum

diameter in inches) red seedless grapefruit be made available for

shipment into fresh market channels for any week or weeks during the

regulatory period. Should the committee decide to recommend the

limitation of shipments of sizes 48 and 56 red seedless grapefruit,

they would meet and recommend to the Secretary a percentage on which to

base the amount of sizes 48 and 56 that could be shipped during a

particular week or weeks during the regulatory period. The committee

realizes that markets for these sizes do exist. Therefore, the

percentage set could not be less than 25 percent of the calculated

shipment base. These procedures are designed not to eliminate shipments

of sizes 48 and 56, but to keep them from saturating the entire market.

Section 905.52 provides that whenever any size limitation restricts

the shipment of a portion of a specified size, the quantity of such

size that may be shipped by a handler during a particular week shall be

established as a percentage of the total shipments of such variety by

such handler in such prior period as established by the committee and

approved by the Secretary.

This final rule establishes the prior period as an average week

within the immediately preceding five seasons. An average week would be

calculated as follows. The total red seedless grapefruit shipments by a

handler during the 33-week period beginning the third Monday in

September and ending the first Sunday in May during the past five

seasons would be added and divided by five to establish an average

season. This average season is then divided by the 33 weeks in a season

to derive the average week. This week is the basis for each shipper for

each of the 11 weeks contained in the regulation period.

To illustrate, suppose Handler A shipped a total of 50,000 cartons,

65,000 cartons, 45,000 cartons, 80,000 cartons, and 25,000 cartons of

red seedless grapefruit in the last five seasons, respectively. Adding

these season totals and dividing by five yields an average season of

53,000 cartons. The average season would then be divided by 33 weeks to

yield an average week, in this case, 1,606 cartons. This would be

Handler A's base.

The committee chose to use the past five seasons for the average

season to provide the most accurate picture of an average season. The

use of an average week helps adjust for variations in growing

conditions that may affect when fruit matures in different seasons and

growing areas. The committee believes that this definition of prior

period provides each handler with an equitable base from which to

establish shipments.

The average week for handlers with less than five previous seasons

of shipments is to be calculated by averaging the total shipments for

the seasons they did ship red seedless grapefruit during the

immediately preceding five years and dividing that average by 33. New

handlers with no record of shipments would have no prior period on

which to base their average week. Therefore, if a volume regulation was

established before such handlers have shipped any red seedless

grapefruit, the new handlers could ship small sizes as a percentage of

their total shipments equal to the percentage applied to other

handlers' base. Once new handlers have established shipments, the

average week would be calculated as an average of the weeks they have

shipped during the current season.

To use these new procedures, the committee would meet and recommend

a base percentage of sizes 48 and 56 that could enter the fresh market

in any week or weeks from the first Monday in September through the

first Sunday in December. If approved by the Secretary, this percentage

would be applied to each handler's average week of fresh shipments to

determine the amount (allocation) of sizes 48 and 56 red grapefruit

each handler could ship. Each regulation period would begin Monday at

12:00 a.m. and end at 11:59 p.m. the following Sunday, since most

handlers keep records based on Monday being the beginning of the work

week.

When a size limitation is recommended to restrict the shipment

during a particular week, the committee would compute each handler's

allotment by multiplying the handler's average week by the percentage

established by regulation for that week. Such set percentage could vary

from week to week, but could not be less than 25 percent. The committee

would notify each handler prior to the particular week of the quantity

of sizes 48 and 56 red seedless grapefruit such handler could handle

during a particular week.

To provide handlers with some flexibility, these procedures provide

allowances for overshipments, loans, and transfers of allotment. These

allowances should allow handlers the opportunity each week to supply

their markets while limiting the impact of small sizes.

During any regulation week for which the Secretary has fixed the

percentage of sizes 48 and 56 red seedless grapefruit, any person who

has received an allotment could handle, in addition to their weekly

allotment, an amount of size 48 and 56 red seedless grapefruit not to

exceed 10 percent of that week's allotment. The quantity of

overshipments would be deducted from the handler's allotment for the

following week. Overshipments would not be allowed during week 11

because there would be no allotments the following week from which to

deduct the overshipments.

If handlers fail to use their entire allotments in a given week,

the amounts undershipped would not be carried forward to the following

week. However, a handler to whom an allotment has been issued could

lend or transfer all or part of such allotment (excluding the

overshipment allowance) to another handler. In the event of a loan of

allotment, each party would, prior to the completion of the loan

agreement, notify the committee of the proposed loan and date of

repayment. If a transfer of allotment is desired, each party would

promptly notify the committee so that proper adjustments of the records

could be made. In each case, the committee would confirm in writing all

such transactions prior to the following week. The committee could also

act on behalf of handlers wanting to arrange allotment loans or

participate in the transfer of allotment. Repayment of an allotment

loan would be at the discretion of the handlers party to the loan.

In considering these procedures, the committee discussed several

possible alternatives. One alternative considered was an amendment to

the marketing order. The amendment would have changed the language

regarding the ``prior period'' in section 905.52. However, this

alternative was rejected because of the time required to amend the

order.

The committee also discussed limiting or eliminating only shipments

of size 56 grapefruit. However, the committee found that it is

important to include both sizes 48 and 56 for this regulation to be

effective. Also, the committee did not want to eliminate a size

entirely. They realize there is a market for small sizes and wish to

allow handlers to take advantage of this market without negatively

affecting the market for other sizes.

Other concerns were raised during discussion of these procedures.

One committee member questioned whether these procedures would allow

him to continue to increase his business. It was explained that this

action would only put tools in place to allow the limitation

[[Page 69014]]

of just a certain percentage of the smaller sized red seedless

grapefruit. A handler would not in any way be limited from shipping any

amount of larger sizes. Another concern raised was the impact these

procedures would have on harvesting. It was explained again that this

rule would just establish procedures. However, if implemented, it would

require more selective picking of only the sizes desired, something

that many producers are doing already.

After a lengthy discussion, the committee decided that it needs to

have available a tool to regulate shipments of small sized red seedless

grapefruit early in each marketing season. The committee voted to

recommend the establishment of these procedures to provide them with

that tool.

The committee reports that it expects that more red seedless

grapefruit will be produced in Florida during the 1996-97 season than

last season. The committee also expects that supplies of fresh Florida

red seedless grapefruit will be adequate to meet consumer demand during

the entire 1996-97 season.

This rule does not affect the order provision that handlers may

ship up to 15 standard packed cartons (12 bushels) of fruit per day

exempt from grade and size requirements. Fruit shipped in gift packages

that are individually addressed and not for resale, and fruit shipped

for animal feed are also exempt from grade and size requirements under

specific conditions. Also, fruit shipped to commercial processors for

conversion into canned or frozen products or into a beverage base are

not subject to the handling requirements under the order.

Section 8(e) of the Act requires that whenever grade, size, quality

or maturity requirements are in effect for certain commodities under a

domestic marketing order, including grapefruit, imports of that

commodity must meet the same or comparable requirements. This rule does

not change the minimum grade and size requirements under the order.

Therefore, no change is necessary in the grapefruit import regulations

as a result of this action.

The proposed rule concerning this action was published in the

August 28, 1996, Federal Register (61 FR 44187), with a 30-day comment

period ending September 27, 1996. Twenty four comments were received,

thirteen in favor and seven in opposition to the proposed rule. The

thirteen comments in favor were from handlers and growers. In addition,

four comments were received from handlers and growers after the closing

date for comments. These comments were in favor of the proposed rule

and raised no new issues for those received prior to the close of the

comment period.

In his comment, the manager of the committee stated that the

committee went to great lengths to ensure that the entire Florida

citrus industry was included in the development of the proposed rule.

At all times the interests of consumers of fresh Florida grapefruit

were foremost.

Ten commenters supporting this action mentioned that past history

has shown that the overshipment of small sizes early in the season has

resulted in reduced prices. They believe the provisions of this rule

should be sufficient to address this problem. One commenter stated that

this rule, if instituted, would allow the committee to bring the early

volume of small size red grapefruit more closely in line with the

normal industry shipments occurring later in the season. Historically,

it is in the early weeks of a season when shipments of these small size

red grapefruit have substantially exceeded 25 percent of total

shipments, resulting in market gluts and the collapse of prices.

Ten commenters stated that regulation to control small sizes in the

early season would have a stabilizing effect on the market. Several

stated that the rule would provide a mechanism to improve orderly

marketing of small size red grapefruit during the early season without

causing hardships for any growers or handlers.

Nine of the commenters in favor of the regulation mentioned the

provision that limits the percentage set to a minimum of 25 percent.

Many of these believe that this will prevent excessive limitation,

while allowing handlers to service their customers. Several also said

that the 25 percent lower limit assures a good flow to market of these

small size red grapefruit. Implementing these procedures could hold

shipments of small sizes closer to the percentage shipped during the

latter part of the season.

In five of the comments supporting the regulation, the regulatory

period of eleven weeks was referenced. The commenters believe that the

period of regulation contemplated is when the industry has repeatedly

experienced overshipment of small sizes. After the first week in

December, the movement of smaller fruit becomes more stable, reducing

the need for regulation.

In regards to allotment, eight of the comments cited and supported

the flexibility the provisions afford handlers to acquire additional

allotment when needed. In their comments, they recognized the

overshipment provisions, the ability to transfer allotment, and

allotment loans, indicating that handlers should be able to find

adequate allotment to meet market demand.

Seven comments in opposition to the proposed rule were received.

One of the opposing comments stated that grapefruit should be marketed

when ripe. Although grapefruit is a perishable commodity, mature red

grapefruit can be stored on the tree and picked as needed to provide

the market with a more even distribution of supplies during the season.

This on-tree storage feature is particularly valuable early in the

season when a large portion of the crop is often mature but small in

size. By leaving the fruit on the tree, it can continue to grow to a

larger size, and larger sizes usually yield a higher price, thereby

increasing returns to growers.

Another of the opposing comments stated that early picking and

shipping help avoid losses from weather related problems (frost). A

freeze is a possibility in any season. Industry practices and grove

location have combined to work to minimize freeze damage and to extend

the grapefruit marketing season. The provisions of this rule would not

prevent handlers from marketing fruit early. Implementing these

procedures would only restrict the movement of small red grapefruit. It

is the glut of small red grapefruit that damages the market for all

sizes. Based on its analysis, the Economic Analysis Branch, of the

Fruit and Vegetable Division, of the AMS, (EAB) has determined that

during each of the last three seasons, the on-tree equivalent price for

sizes 48 and 56 red Florida grapefruit has dropped below $1.00 per

carton. These low prices also pulled the prices for larger sizes down.

With on-tree prices dropping below cost of production, the impact on

the industry may be similar to the effects of the freeze.

One opposing comment stated that under this regulation, returns to

the packinghouse and grower would be lower, the season would be

shortened, and that farm laborers would be dismissed earlier. The

committee believes using these procedures could increase returns to

growers while providing consumers an adequate supply of the commodity

in the marketplace. Implementing these procedures could actually

lengthen the season. If the grapefruit remain on the tree longer, they

will increase in size and be of greater value later in the season. An

extended season would also benefit laborers who would be needed for a

longer period of time. The aim of this rule is to establish procedures

that may be used to provide steady supplies at reasonable and stable

prices, thereby

[[Page 69015]]

protecting the interests of growers, packers, workers in the industry,

and consumers of red grapefruit.

Several opposing comments were received concerning the rule and the

possible loss of market share, particularly in export markets that

demand sizes 48 and 56, to other grapefruit growing areas. If the

provisions of this rule are implemented, handlers will still be able to

ship a percentage of small size grapefruit to those markets that

require them and use larger sizes to fill their other markets. The

provisions established by this rule would prevent market restrictions

below 25 percent. Based on past seasons, even if percentages were

established at 25 percent, ample quantities should be available to

furnish those markets which demand small sizes.

The purpose of implementing this rule would not be to eliminate

small size red grapefruit. It is merely to prevent a surplus of small

size red grapefruit from damaging the overall grapefruit market.

Another commenter opposing the rule expressed concern that market

share could be lost to Texas. According to the EAB, limiting shipments

of small Florida grapefruit would probably not result in a major shift

to Texas grapefruit because the Texas industry is much smaller and

would have higher freight costs to some markets supplied by Florida.

One opposing comment stated that the rule had not been fully

explained. The committee has had this rule under advisement since it

received industry requests in December 1995. The committee started

holding subcommittee meetings in February 1996 and held many informal

meetings with industry groups to discuss the proposal. On May 16, 1996,

another subcommittee meeting was held, and people who had demonstrated

opposition were specifically invited to make comments and get their

opinions on record. Throughout the process, the proposal was modified

based on questions and concerns of the industry. These changes were

shared at industry meetings and through committee mailings.

On May 23, 1996, the committee met and recommended this regulation

after much discussion. Several different motions were offered at this

meeting. Prior to any vote, the motions were carefully restated, so

that members understood the issue they were voting on. All motions

advanced were discussed and there was opportunity for questions.

One commenter opposed the method of calculating allotments. He

believes that because he has not shipped much fruit early in past

seasons that his allotment will not reflect his true shipments. The

committee discussed several methods of measuring a handler's volume to

determine this base. It was decided that shipments for the five

previous years from the period from the third Monday in September to

the first Sunday the following May should be used for calculation

purposes. This bases allotment on a 33 week period of shipments, not

just a handler's early shipments. This was done specifically to

accommodate small shippers or light volume shippers, who may not have

shipped much grapefruit in the early season. This method of calculation

provides a fair allocation of allotment.

This commenter also expressed concern regarding whether his

allotment would be enough to cover his customer base. The provisions of

this rule provide flexibility through several different options.

Handlers have the privilege to transfer, borrow or loan allotment based

on their needs in a given week. Handlers also have the option of

overshipping their allotment by 10 percent in a week, as long as the

overshipment is deducted from the following week's shipments.

One opposing comment stated that restricting movement of grapefruit

could do more harm than good and interfere with the orderly marketing

of this product. These procedures are designed to promote orderly

marketing. The purpose is to furnish sufficient supplies of red

grapefruit to fresh markets early in the season, while avoiding the

possible price-depressing effect of saturating the market with small

sizes. This is particularly important during the first few months of

the season when supplies of small sizes are heaviest. The declaration

of policy in the Act includes a provision concerning establishing and

maintaining such orderly marketing conditions as will provide, in the

interest of producers and consumers, an orderly flow of the supply of a

commodity throughout the normal marketing season to avoid unreasonable

fluctuations in supplies and prices.

Utilizing these procedures will contribute to the Act's objectives

of orderly marketing and improving producers' returns. According to

EAB, since sizes 48 and 56 red grapefruit are a small part of the total

supply of Florida red grapefruit, limiting shipments of these sizes

would have only a moderate effect on the total quantity shipped. It

may, however, help to prevent the average price for all Florida red

grapefruit from being reduced to below the cost of production.

Many opposition comments addressed the proposed rule as if it were

in place and implemented. As previously stated, this rule merely

establishes procedures. To implement these procedures, the committee

would hold public meetings to discuss and recommend a percentage of

size regulation to the Secretary. Additional rulemaking would be

required, and there would be additional opportunity to comment.

After thoroughly analyzing the comments received and other

available information, the Department has concluded that this final

rule is appropriate, and that no changes to the rule are being made in

response to the comments.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.

Chapter 35), the information collection requirements that are contained

in this rule have been previously approved by the Office of Management

and Budget (OMB) and have been assigned OMB No. 0581-0094.

After consideration of all relevant material 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 905

Grapefruit, Marketing agreements, Oranges, Reporting and

recordkeeping requirements, Tangelos, Tangerines.

For the reasons set forth in the preamble, 7 CFR part 905 is

amended as follows:

PART 905--ORANGES, GRAPEFRUIT, TANGERINES, AND TANGELOS GROWN IN

FLORIDA

1. The authority citation for 7 CFR Part 905 continues to read as

follows:

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

2. A new Sec. 905.153 is added to read as follows: Sec. 905.153

Procedure for determining handlers' permitted quantities of red

seedless grapefruit when a portion of sizes 48 and 56 of such variety

is restricted.

(a) For the purposes of this section, the prior period specified in

Sec. 905.52 is hereby established as an average week within the

immediately preceding five seasons. Each handler's average week shall

be computed by adding the total volume of red seedless grapefruit

handled in the immediately preceding five seasons and dividing the

total by 165. The average week for handlers with less than five

previous seasons of

[[Page 69016]]

shipments shall be calculated by adding the total volume of shipments

for the seasons they did ship red seedless grapefruit, divide by the

number of seasons, divide further by 33. New handlers with no record of

shipments could ship size 48 and 56 red seedless grapefruit as a

percentage of total shipments equal to the percentage applied to other

handlers' average week; once such handlers have recorded shipments,

their average week shall be calculated as an average of total shipments

for the weeks they have shipped red seedless grapefruit during the

current season. When used in the regulation of red seedless grapefruit,

the term season means the weeks beginning the third Monday in September

and ending the first Sunday in the following May. The term regulation

period means the 11 weeks beginning the third Monday in September and

ending the first Sunday in December of the current season.

(b) When a size limitation restricts the shipment of a portion of

sizes 48 and 56 red seedless grapefruit during a particular week as

provided in Sec. 905.52, the committee shall compute the quantity of

sizes 48 and 56 red seedless grapefruit that may be shipped by each

handler by multiplying the handler's calculated average week shipments

of such grapefruit by the percentage established by regulation for red

seedless grapefruit for that week.

(c) The committee shall notify each handler of the quantity of size

48 and 56 red seedless grapefruit such handler may handle during a

particular week.

(d) During any regulation week for which the Secretary has fixed

the percentage of sizes 48 and 56 red seedless grapefruit, any person

who has received an allotment may handle, in addition to their total

allotment available, an amount of size 48 and 56 red seedless

grapefruit up to 10 percent greater than their allotment. The quantity

of the overshipment shall be deducted from the handler's allotment for

the following week. Overshipments will not be allowed during week 11.

If the handler fails to use his or her entire allotment, the under

shipment is not carried forward to the following week.

(e) Any handler may transfer or loan any or all of their shipping

allotment (excluding the overshipment allowance) of size 48 and 56 red

seedless grapefruit to any other handler. Each handler party to such

transfer or loan shall promptly notify the committee so the proper

adjustment of records may be made. In each case, the committee shall

confirm in writing all such transactions, prior to the following week,

to the handlers involved. The committee may act on behalf of handlers

wanting to arrange allotment loans or participate in the transfer of

allotments.

Dated: December 24, 1996.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 96-33268 Filed 12-30-96; 8:45 am]

BILLING CODE 3410-02-P