Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida; Regulation of Fallglo Variety Tangerines

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 905

[Docket No. FV98-905-5 PR]

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

Regulation of Fallglo Variety Tangerines

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule invites comments on the addition of Fallglo

tangerines to the varieties of citrus fruit regulated under the

marketing order covering oranges, grapefruit, tangerines, and tangelos

grown in Florida. The marketing order is administered locally by the

Citrus Administrative Committee (committee). This rule would add

Fallglo tangerines to the varieties covered under the order. It would

also establish minimum grade and size requirements for the Fallglo

variety. This rule is intended to assure that the Fallglo tangerines

entering fresh market channels are of a size and quality acceptable to

consumers. This proposed rule is in the interest of producers,

shippers, and consumers.

DATES: Comments must be received by September 22, 1998.

ADDRESSES: Interested persons are invited to submit written comments

concerning this proposal. Comments must be sent to the Docket Clerk,

Fruit and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456,

Washington, DC 20090-6456; Fax: (202) 205-6632; or E-mail:

[email protected]. All comments should reference the docket

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

Register and will be made available for public inspection in the Office

of the Docket Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: William G. Pimental, Marketing

Specialist, Southeast Marketing Field Office, Marketing Order

Administration Branch, F&V, AMS, USDA, P.O. Box 2276, Winter Haven,

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

George Kelhart, Technical Advisor, Marketing Order Administration

Branch, F&V, AMS, USDA, room 2525-S, P.O. Box 96456, Washington, DC

20090-6456; telephone: (202) 720-2491, Fax: (202) 205-6632. Small

businesses may request information on compliance with this regulation

by contacting Jay Guerber, Marketing Order Administration Branch, Fruit

and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456,

Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202) 205-

6632.

SUPPLEMENTARY INFORMATION: This proposal is issued under Marketing

Agreement No. 84 and Marketing Order No. 905, both as amended (7 CFR

part 905), regulating the handling of oranges, grapefruit, tangerines,

and tangelos grown in Florida, hereinafter referred to as the

``order.'' The marketing 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.''

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

conformance with Executive Order 12866.

This proposal has been reviewed under Executive Order 12988, Civil

Justice Reform. This 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 to review the Secretary's

ruling on the petition, provided an action is filed not later than 20

days after the date of the entry of the ruling.

The order provides for the establishment of grade and size

requirements for Florida citrus, with the concurrence of the Secretary.

These grade and size requirements are designed to provide fresh markets

with citrus fruit of acceptable quality and size. This helps create

buyer confidence and contributes to stable marketing conditions. This

is in the interest of growers, handlers, and consumers, and is designed

to increase returns to Florida citrus growers.

This proposed rule would add Fallglo tangerines to the citrus

varieties covered under the order. It would also establish minimum

grade and size requirements for the Fallglo variety. This rule is

designed to help assure that the size and quality of Fallglo tangerines

entering fresh market channels are acceptable to consumers. This action

was unanimously recommended by the committee at its meeting on May 22,

1998.

Section 905.5 of the order defines the varieties of fruit regulated

under the order and authorizes the addition of other varieties as

specified in Sec. 905.4, as recommended by the committee and approved

by the Secretary. Section 905.105 contains the changes in varieties

that have been made using this authority. This proposal would add

Fallglo tangerines to the varieties of citrus fruit regulated under the

order by modifying Sec. 905.105.

Fallglo tangerines are a relatively new variety coming into

significant commercial production. The committee has been following the

production statistics for Fallglo tangerines. During the last four

years this variety has experienced rapid production growth. The

committee uses a level of a million cartons of production as a measure

in considering a variety's commercial significance. In the 1997-98

season, total utilization of Fallglo tangerines approximated 1,157,624

cartons (\4/5\ bushel). This compares to 465,876 (\4/5\ bushel) cartons

utilized during the 1994-95 season.

Another indicator of commercial significance is the market share

held by the variety. For the 1997-98 season, Fallglo tangerines shipped

fresh totaled approximately 874,000 cartons (\4/5\ bushel), or

approximately 23 percent of the early tangerine market. As the trees of

this variety reach full bearing age and additional plantings begin to

bear fruit, the committee expects shipments of Fallglo tangerines to

continue to increase and comprise a larger share of the early tangerine

market.

The committee believes that the current level of production and

shipments is significant enough to

[[Page 46709]]

warrant the addition of Fallglo tangerines to the varieties covered

under the order. This rule would also establish minimum grade and size

requirements for Fallglo tangerines. Section 905.52 of the order, in

part, authorizes the committee to recommend minimum grade and size

regulations to the Secretary. Section 905.306 of the order's rules and

regulations specifies minimum grade and size requirements for different

varieties of fresh Florida citrus. Such requirements for domestic

shipments are specified in Sec. 905.306 in Table I of paragraph (a),

and for export shipments in Table II of paragraph (b).

This rule would amend Sec. 905.306 to add the Fallglo tangerine

variety to the list of entries in Table I of paragraph (a), and in

Table II of paragraph (b). A minimum grade of U.S. No. 1 as specified

in the U.S. Standards for Grades of Florida Tangerines (7 CFR 51.1810

through 51.1837), and a minimum size of 2\6/16\ inches diameter would

be established for Fallglo tangerines for both domestic and export

shipments.

The committee recommended the minimum size of 2\6/16\ inches

diameter for Fallglo tangerines because this variety of tangerine tends

to grow larger than the other tangerine varieties regulated at the 2\4/

16\ inch minimum diameter, and it can easily attain the larger size.

The minimum grade of U.S. No. 1 was recommended by the committee for

this variety because tangerines meeting the requirements of this grade

are mature, and, while having more cosmetic defects than the higher

grades specified in the standards, the defects do not materially

detract from the appearance, or the edible or marketing quality of the

fruit. All regulated varieties of Florida tangerines, except Honey

tangerines, have a minimum U.S. No. 1 grade. Honey tangerines are not

regulated at U.S. No. 1 because their skin possesses excessive amounts

of green coloring which causes them to exceed the tolerances for that

grade defect. Honey tangerines must be at least Florida No. 1 grade,

which permits more green coloring than U.S. No. 1. According to the

committee, almost all of the Fallglo tangerines shipped fresh in 1997-

98 would have met the proposed requirements had they been in effect.

Minimum grade and size requirements for domestic and export

shipments of tangerines are designed to prevent shipments of low grade,

immature, small sized, or otherwise unsatisfactory fruit from entering

fresh market channels. Preventing such shipments helps create buyer

confidence in the marketplace and helps foster stable marketing

conditions in the interest of producers.

The committee noted that fresh shipments of Fallglo tangerines had

increased from 381,990 cartons (\4/5\ bushel) in 1994-95 to 874,076

cartons (\4/5\ bushel) in 1997-98. Total utilization had increased from

465,876 \4/5\ bushel cartons in 1994-95 to 1,157,624 \4/5\ bushel

cartons in 1997-98. In the 1997-98 season, approximately 76 percent of

the Fallglo tangerine crop was shipped in fresh market channels,

representing approximately 23 percent of the early tangerine crop. The

committee believes that the current market share and shipment levels

justify establishing minimum grade and size requirements for Fallglo

tangerines and that these requirements are needed to help assure and

maintain acceptable shipments.

The committee further believes that the addition of this variety to

those regulated under the order and the establishment of minimum grade

and size requirements for Fallglo tangerines will become increasingly

important as production and market share increase. The establishment of

such requirements for this tangerine variety is expected to help ensure

that only fresh fruit of acceptable size and quality reaches consumers

in the interest of producers, handlers, and consumers. Experience has

shown that providing uniform quality and size acceptable to consumers

helps stabilize the market, improves grower returns, and fosters market

growth.

Pursuant to requirements set forth in the Regulatory Flexibility

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

economic impact of this action on small entities. Accordingly, AMS has

prepared this initial regulatory flexibility analysis.

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 75 tangerine handlers subject to regulation

under the order and approximately 11,000 growers of citrus in the

regulated area. Small agricultural service firms have been defined by

the Small Business Administration (SBA) as those having annual receipts

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

as those having annual receipts of less than $500,000 (13 CFR 121.601).

Based on industry and committee data for the 1997-98 season, the

average annual free-on-board price for fresh Florida tangerines during

the 1997-98 season was around $12.51 per \4/5\ bushel carton, and total

fresh shipments of early tangerines for the 1997-98 season are

estimated at 3.8 million cartons.

Approximately 40 percent of all handlers handled 80 percent of

Florida tangerine shipments. In addition, many of these handlers ship

other citrus fruit and products that would contribute further to

handler receipts. About 80 percent of citrus handlers could be

considered small businesses under SBA's definition and about 20 percent

of the handlers could be considered large businesses. The majority of

Florida citrus handlers, and growers may be classified as small

entities.

Under Sec. 905.5 the committee has the authority to recommend to

the Secretary the addition of other citrus varieties to those covered

under the order. Section 905.52 of the order, in part, authorizes the

committee to recommend minimum grade and size regulations to the

Secretary. Pursuant to this authority, minimum grade and size

requirements for domestic and export shipments are specified for

numerous citrus varieties covered under the order. Currently, Fallglo

tangerines are not included under the order and no minimum grade and

size requirements are established for this variety.

This rule would make changes to Secs. 905.105 and 905.306 of the

rules and regulations concerning covered varieties and minimum grade

and size requirements, respectively. This rule would add Fallglo

tangerines to the varieties covered under the order. It would also

establish a minimum grade and size requirement for Fallglo tangerines.

The establishment of such requirements for this variety would help

stabilize the market and improve grower returns by providing uniform

quality and size acceptable to consumers.

This regulation would have a positive impact on affected entities.

This action is intended to maintain and improve quality. The purpose of

this rule would be to improve the quality of fruit entering fresh

market channels in the interest of producers, shippers, and consumers.

Minimum grade and size requirements for domestic and export shipments

of tangerines are designed to prevent shipments of low grade, immature,

small sized, or otherwise unsatisfactory fruit from entering fresh

market channels.

While this rule would establish a minimum grade and size

requirement

[[Page 46710]]

for Fallglo tangerines, many handlers in the industry have been using

these requirements voluntarily. According to the committee, almost all

of the Fallglo tangerines shipped fresh in 1997-98 (874,076 \4/5\

bushel cartons) would have met the requirements proposed in this rule

(i.e., U.S. No. 1 and 2\6/16\ inches in diameter) had they been in

effect. Therefore, this rule should not be overtly restrictive, and the

overall effect on costs is expected to be minimal in relation to the

benefits expected.

Regarding expected handler inspection costs, three inspection and

certification options are being used by Florida citrus handlers

regulated under the order. The options are Partners in Quality (PIQ),

continuous in-line, and lot inspection. The PIQ inspection option is an

audit based quality assurance program between inspection officials of

the Fresh Products Branch, F&V, AMS, USDA, and officials from the

individual packinghouses. Under PIQ, the packinghouse and inspection

officials develop a system of checks along the processing/packing line

which demonstrate and document their ability to pack product that meets

all applicable requirements. The effectiveness of PIQ is verified

through periodic, unannounced audits of each packer's system by USDA-

approved auditors. Under the latter two inspection options, the

commodity is inspected by Federal or Federal-State inspection officials

as packaged product, rather than before packaging by packinghouse

officials as with PIQ, and the results are certified. Current costs are

$0.04 cents per carton for PIQ type inspection, $0.07 cents per carton

for continuous in-line inspection, and $39.00 per hour for lot

inspection.

By not setting minimum quality and size regulations, a quantity of

poor quality, small sized fruit may reach the retail market, resulting

in consumer dissatisfaction and product substitution. Such a lapse in

quality and/or size could result in a price reduction. Preventing such

shipments helps create a buyer confidence in the marketplace and helps

foster stable marketing conditions in the interest of producers.

A stabilized market that returns a fair price would be beneficial

to both small and large growers and handlers. The opportunities and

benefits of this rule are expected to be available to all Fallglo

tangerine growers and handlers regardless of their size of operation.

This action would not impose any additional reporting or

recordkeeping requirements on either small or large citrus handlers. As

with all Federal marketing order programs, reports, and forms are

periodically reviewed to reduce information requirements and

duplication by industry and public sector agencies.

The Department has not identified any relevant Federal rules that

duplicate, overlap, or conflict with this proposed rule. However,

tangerines must meet the requirements as specified in the U.S.

Standards for Grades of Florida Tangerines (7 CFR 51.1810 through

51.1837) issued under the Agricultural Marketing Act of 1946 (7 U.S.C.

1621 through 1627).

In addition, the committee's meeting was widely publicized

throughout the citrus industry and all interested persons were invited

to attend the meeting and participate in committee deliberations on all

issues. Like all committee meetings, the May 22, 1998, meeting was a

public meeting and all entities, both large and small, were able to

express views on this issue. Interested persons are invited to submit

information on the regulatory and informational impacts of this action

on small businesses.

A 20-day comment period is provided to allow interested persons to

respond to this proposal. Twenty days is deemed appropriate because

handlers are expected to begin shipping Fallglo tangerines in early

October and any changes to the regulation implemented as a result of

this action should be announced as soon as possible so producers and

handlers can plan accordingly. All written comments timely received

will be considered before a final determination is made on this matter.

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

proposed to be 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. In Sec. 905.105, paragraph (b) is revised to read as follows:

Sec. 905.105 Tangerine and grapefruit classifications.

* * * * *

(b) Pursuant to Sec. 905.5(m), the term ``variety'' or

``varieties'' includes Sunburst and Fallglo tangerines.

3. Section 905.306 is amended by adding a new entry for Fallglo

tangerines in paragraph (a), Table I, and in paragraph (b), Table II,

to read as follows:

Sec. 905.306 Orange, Grapefruit, Tangerine, and Tangelo Regulations.

(a) * * *

Table I

Minimum

Variety Regulation period Minimum Grade diameter

(inches)

(1) (2)........................ (3)........................ (4)

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* * * * * *

*

Tangerines

* * * * * *

*

Fallglo................................. On and after 10/1/98....... U.S. No. 1................. 2\6/16\

* * * * * *

*

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(b) * * *

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Table II

Minimum

Variety Regulation period Minimum Grade diameter

(Inches)

(1) (2)........................ (3)........................ (4)

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* * * * * *

*

Tangerines

* * * * * *

*

Fallglo................................. On and after 10/1/98....... U.S. No. 1................. 2\6/16\

* * * * * *

*

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* * * * *

Dated: August 26, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 98-23513 Filed 9-1-98; 8:45 am]

BILLING CODE 3410-02-P