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 FR]

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

Regulation of Fallglo Variety Tangerines

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule adds Fallglo tangerines to the varieties of citrus

fruit regulated under the marketing order covering oranges, grapefruit,

tangerines, and tangelos grown in Florida. It also establishes minimum

grade and size requirements for the Fallglo variety. These actions were

unanimously recommended by the Citrus administrative Committee

(committee) which locally administers the marketing order. This rule is

intended to assure that Fallglo tangerines entering fresh market

channels are of a size and quality acceptable to consumers in the

interest of producers, shippers, and consumers.

EFFECTIVE DATE: This final rule becomes effective October 19, 1998.

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 final rule 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

[[Page 55498]]

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 final rule has been reviewed under Executive Order 12988,

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

effect. This 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 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.

The grade and size requirements now in effect are designed to provide

fresh markets with citrus fruit of acceptable quality and size, and

help create buyer confidence. The requirements also contribute toward

stable marketing conditions and foster market growth in the interest of

growers, handlers, and consumers, and help increase returns to Florida

citrus growers.

This final rule adds Fallglo tangerines to the citrus varieties

covered under the order. It also establishes 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 rule adds 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. Another indicator

of commercial significance used by the committee is the market share

held by the variety.

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. 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 market share and shipment

levels justify adding this variety to those regulated under the order

and establishing minimum grade and size requirements for Fallglo

tangerines, and that these requirements will become increasingly

important in helping assure and maintain acceptable shipments as

production and market share increase. The establishment of such

requirements for this tangerine variety is expected to help ensure that

only fresh Fallglos of acceptable size and quality reach 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.

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 amends Sec. 905.306 by adding 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 are

established for Fallglo tangerines for both domestic and export

shipments.

The committee recommended a 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 these 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.

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 final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of

[[Page 55499]]

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 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 makes 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 adds Fallglo tangerines to the

varieties covered under the order. It also establishes a minimum grade

and size requirement for Fallglo tangerines. The establishment of such

requirements for this variety will help stabilize the market and

improve grower returns by providing uniform quality and size acceptable

to consumers.

This regulation is expected to have a positive impact on affected

entities. This action is intended to maintain and improve quality. The

purpose of this rule is 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 establishes a minimum grade and size requirement

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 established 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 overly 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 buyer confidence in the marketplace and helps

foster stable marketing conditions in the interest of producers.

A stabilized market that returns a fair price will 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 will 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 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.

A proposed rule concerning this action was published in the Federal

Register on September 2, 1998 (63 FR 46708). Copies of that rule were

also mailed or sent via facsimile to all Florida tangerine growers and

handlers. Finally, the proposed rule was made available through the

Internet by the Office of the Federal Register. A 20-day comment period

was provided for interested persons to respond to the proposed rule.

The comment period ended on September 22, 1998, and no comments were

received.

After consideration of all relevant matter presented, including the

information and recommendation 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.

It is further found that good cause exists for not postponing the

effective date of this rule until 30 days after publication in the

Federal Register (5 U.S.C. 553) because: (1) Handlers are expected to

begin shipping Fallglo

[[Page 55500]]

tangerines in early October and the changes in the regulation need to

be in place as soon as possible to cover as many of the 1998 shipments

as possible so producers and handlers can accrue the benefits expected;

(2) handlers are aware of the changes recommended at a public meeting,

and have made plans to operate thereunder; and (3) a 20-day comment

period was provided for in the proposed rule, and no comments were

received in response to that rule.

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. 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

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Minimum

Variety Regulation Period Minimum Grade diameter

(inches)

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

* * * * * *

*

Tangerines

* * * * * *

*

Fallglo.............................. On and after October 19, 1998 U.S. No. 1................... 2 6/16

* * * * * *

*

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(b) * * *

Table II

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Minimum

Variety Regulation period Minimum grade diameter

(inches)

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

* * * * * *

*

Tangerines

* * * * * *

*

Fallglo.............................. On and after October 19, 1998 U.S. No...................... 1 2 6/16

* * * * * *

*

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* * * * *

Dated: October 9, 1998

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 98-27781 Filed 10-15-98; 8:45 am]

BILLING CODE 3410-02-P