Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida and Imported Grapefruit; Relaxation of the Minimum Size Requirement for Red Seedless Grapefruit

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 905 and 944

[Docket No. FV99-905-1 IFR]

Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida

and Imported Grapefruit; Relaxation of the Minimum Size Requirement for

Red Seedless Grapefruit

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule makes changes in the regulations under the Florida

citrus marketing order and the grapefruit import regulations. This rule

relaxes the minimum size requirement for red seedless grapefruit and

for red seedless grapefruit imported into the United States from size

48 (3\9/16\ inches diameter) to size 56 (3\5/16\ inches diameter). The

Citrus Administrative Committee (Committee), the agency that locally

administers the marketing order for oranges, grapefruit, tangerines,

and tangelos grown in Florida, unanimously recommended this change.

This change allows handlers and importers to ship size 56 red seedless

grapefruit through November 7, 1999, and is expected to maximize

grapefruit shipments to fresh market channels.

DATES: Effective November 9, 1998. Comments received by January 11,

1999 will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments

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

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

Washington, D.C. 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 available for public inspection in the office of

the Docket Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: William G. Pimental, Southeast

Marketing Field Office, F&V, AMS, USDA, P.O. Box 2276, Winter Haven,

Florida 33883; telephone: (941) 299-

[[Page 62920]]

4770, Fax: (941) 299-5169; or George Kelhart, Technical Advisor,

Marketing Order Administration Branch, F&V, AMS, USDA, room 2522-S,

P.O. Box 96456, Washington, DC 20090-6456; telephone: (202) 720-2491,

Fax: (202) 205-6632. Small businesses may request information on

complying with this regulation, or obtain a guide on complying with

fruit, vegetable, and specialty crop marketing agreements and orders,

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, or E-mail: Jay__N__G[email protected]. You may also view the

marketing agreements and orders small business compliance guide at the

following web site: http://www.ams.usda.gov/fv/moab.html.

SUPPLEMENTARY INFORMATION: This 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 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.''

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

provides that whenever specified commodities, including grapefruit, are

regulated under a Federal marketing order, imports of these commodities

into the United States are prohibited unless they meet the same or

comparable grade, size, quality, or maturity requirements as those in

effect for the domestically produced commodities.

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

conformance with Executive Order 12866.

This 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 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.

The order for Florida citrus provides for the establishment of

minimum grade and size requirements with the concurrence of the

Secretary. The minimum grade and size requirements are designed to

provide fresh markets with fruit of acceptable quality and size,

thereby maintaining consumer confidence for fresh Florida citrus. This

contributes to stable marketing conditions in the interest of growers,

handlers, and consumers, and helps increase returns to Florida citrus

growers. The current minimum grade standard for red seedless grapefruit

is U.S. No. 1. The current minimum size requirement for domestic

shipments is size 56 (at least 3\5/16\ inches in diameter) through

November 8, 1998, and size 48 (3\9/16\ inches in diameter) thereafter.

The current minimum size for export shipments is size 56 throughout the

year.

This interim final rule invites comments on a change to the order's

rules and regulations relaxing the minimum size requirement for

domestic shipments of red seedless grapefruit. This action allows for

the continued shipment of size 56 red seedless grapefruit. This rule

relaxes the minimum size from size 48 (3\9/16\ inches diameter) to size

56 (3\5/16\ inches diameter) through November 7, 1999. Absent this

change, the minimum size will revert to size 48 (3\9/16\ inches

diameter) November 9, 1998. The Committee met on September 3, 1998, and

unanimously recommended this action.

Section 905.52 of the order, in part, authorizes the Committee to

recommend minimum grade and size regulations to the Secretary. Section

905.306 (7 CFR part 905.306; 63 FR 19379, April 20, 1998) specifies

minimum grade and size requirements for different varieties of fresh

Florida grapefruit. 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 adjusts Table I to

establish a minimum size of 56 through November 7, 1999. Minimum grade

and size requirements for grapefruit imported into the United States

are currently in effect under Sec. 944.106 (7 CFR part 944.106; 63 FR

19379, April 20, 1998). This rule also adjusts Sec. 944.106 to

establish a minimum size of 56 through November 7, 1999. Export

requirements for Florida red seedless grapefruit are not changed by

this rule.

In making its recommendation, the Committee considered estimated

supply and demand. The supply of red seedless grapefruit is expected to

be slightly higher than last season based on the Department's official

crop estimate of 31,500,000 1\3/5\ bushel boxes as compared to last

season's utilized supply of 30,600,000 boxes. The fruit is expected to

be high quality with a good appearance. The Committee reports that it

expects fresh market demand to be sufficient to permit the shipment of

size 56 red seedless grapefruit grown in Florida during the entire

1998-99 season.

This size relaxation will enable Florida grapefruit shippers to

continue shipping size 56 red seedless grapefruit to the domestic

market. This rule will have a beneficial impact on producers and

handlers, since it will permit Florida grapefruit handlers to make

available those sizes of fruit needed to meet consumer needs. This is

consistent with current and anticipated demand in those markets for the

1998-99 season, and will provide for the maximization of shipments to

fresh market channels.

The Committee believes that domestic markets have been developed

for size 56 fruit and that the industry should continue to supply those

markets. This minimum size change pertains to the domestic market, and

does not change the minimum size for export shipments which will

continue at size 56 throughout the season. The largest market for size

56 small red grapefruit is for export.

Committee members stated that during the first 11 weeks of the

season (September 21 through December 6) there is a volume regulation

in effect limiting the volume of small red seedless grapefruit entering

the fresh market that has been successful in moving smaller-sized fruit

to those markets demanding such sizes (63 FR 51511, September 28,

1998). The Committee agreed that this regulation has been helpful in

reducing the negative effects of size 56 on the domestic market.

[[Page 62921]]

In addition, the currency and economic problems currently facing

the Pacific Rim countries remain a concern. These countries

traditionally have been good markets for size 56 grapefruit. Current

conditions there could reduce demand for grapefruit, and alternative

outlets need to be available. It will be advantageous to have the

ability to ship size 56 red seedless grapefruit to the domestic market

should problems materialize in the export market.

Based on available information, the Committee unanimously

recommended that the minimum size for shipping red seedless grapefruit

to the domestic market should be size 56 through November 7, 1999. This

rule will have a beneficial impact on producers and handlers since it

will permit Florida grapefruit handlers to make available those sizes

of fruit needed to meet anticipated market demand for the 1998-99

season. Additionally, importers will be favorably affected by this

change since the relaxation of the minimum size regulation will also

apply to imported grapefruit.

Section 8e of the Act provides that when certain domestically

produced commodities, including grapefruit, 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 relaxes the minimum size requirement under the domestic

handling regulations, a corresponding change to the import regulations

is necessary.

Minimum grade and size requirements for grapefruit imported into

the United States are currently in effect under Sec. 944.106. This rule

relaxes the minimum size requirement for imported red seedless

grapefruit to 3\5/16\ inches in diameter (size 56) until November 7,

1999, to reflect the relaxation being made under the order for red

seedless grapefruit grown in Florida.

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 the 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 80 grapefruit handlers subject to

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

the regulated area, and about 25 grapefruit importers. Small

agricultural service firms, which includes handlers and importers, 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 the industry and Committee data for the 1997-98 season,

the average annual f.o.b. price for fresh Florida red seedless

grapefruit during the 1997-98 season was around $6.30 per \4/5\ bushel

cartons, and total fresh shipments for the 1997-98 season are estimated

at 15.5 million cartons of red seedless grapefruit. Approximately 20

percent of all handlers handled 60 percent of Florida grapefruit

shipments. In addition, many of these handlers ship other citrus fruit

and products which are not included in Committee data but would

contribute further to handler receipts. Using the average f.o.b. price,

about 80 percent of the Florida grapefruit handlers could be considered

small businesses under the SBA definition and about 20 percent of the

handlers could be considered large businesses. The majority of

grapefruit handlers, growers, and importers may be classified as small

entities.

Florida shipped approximately 42,410,000 \4/5\ bushel cartons of

grapefruit to the fresh market during the 1997-98 season. Of these

cartons, about 21,860,000 were exported. In the past three seasons,

domestic shipments of Florida grapefruit averaged about 21,148,000

cartons. During the period 1991 through 1996, imports have averaged

734,800 cartons a season. Imports account for less than five percent of

domestic shipments.

Section 905.52 of the order, in part, authorizes the Committee to

recommend minimum grade and size regulations to the Secretary. Section

905.306 (63 FR 19379, April 20, 1998) specifies minimum grade and size

requirements for different varieties of fresh Florida grapefruit. This

rule relaxes the minimum size requirement for domestic shipments of red

seedless grapefruit from size 48 (3\9/16\ inches diameter) to size 56

(3\5/16\ inches diameter) through November 7, 1999. No change is being

made in the minimum size 56 requirement for export shipments. Absent

this rule, the minimum size requirement for domestic shipments will

revert to size 48 on November 9, 1998. The motion to allow shipments of

size 56 red seedless grapefruit through November 7, 1999, was passed by

the Committee unanimously. In addition, there is a volume regulation in

effect for the first 11 weeks of this season (September 21 through

December 6) that limits the volume of small red seedless grapefruit

entering the fresh market (63 FR 51511; September 28, 1998).

This rule will have a positive impact on affected entities. This

action allows for the continued shipment of size 56 red seedless

grapefruit. This change is not expected to increase costs associated

with the order requirements.

This rule relaxes the minimum size from size 48 (3\9/16\ inches

diameter) to size 56 (3\5/16\ inches diameter) through November 7,

1999. This change will allow handlers to continue to ship size 56 red

seedless grapefruit to the domestic market. This rule will have a

beneficial impact on producers and handlers, since it will permit

Florida grapefruit handlers to make available those sizes of fruit

needed to meet consumer needs. This is consistent with current and

anticipated demand in those markets for the 1998-99 season, and will

provide for the maximization of shipments to fresh market channels.

The currency and economic problems currently facing the Pacific Rim

countries remain a concern. These countries traditionally have been

good markets for size 56 grapefruit. Current conditions there could

reduce demand for grapefruit, and alternative outlets need to be

available. It will be advantageous to have the ability to ship size 56

red seedless grapefruit to the domestic market should problems

materialize in the export market.

This change will allow for the continued shipment of size 56 red

seedless grapefruit. The opportunities and benefits of this rule are

expected to be equally available to all grapefruit handlers, growers,

and importers regardless of their size of operation.

In 1996, imports of grapefruit totaled 15,000 tons (approximately

705,880 cartons). The Bahamas were the principal source, accounting for

95 percent of the total. Remaining imports were supplied by the

Dominican Republic and Israel. Imported grapefruit enters the United

States from October through May. Imports account for less than five

percent of domestic shipments.

Section 8e of the Act provides that when certain domestically

produced commodities, including grapefruit, are regulated under a

Federal marketing order, imports of that commodity must

[[Page 62922]]

meet the same or comparable grade, size, quality and maturity

requirements. Because this rule changes the minimum size for domestic

red seedless grapefruit shipments, this change will also be applicable

to imported grapefruit. This rule relaxes the minimum size to size 56.

This regulation will benefit importers to the same extent that it

benefits Florida grapefruit producers and handlers because it allows

shipments of size 56 red seedless grapefruit into U.S. markets through

November 7, 1999.

The Committee considered one alternative to this action. The

Committee discussed relaxing the minimum size to size 56 on a permanent

basis rather than just for a year. Members said that each season is

different, and they prefer to consider this issue on a yearly basis.

Therefore, this alternative was rejected.

This rule will not impose any additional reporting or recordkeeping

requirements on either small or large red seedless grapefruit handlers

or importers. As with all Federal marketing order programs, reports and

forms are periodically reviewed to reduce information collection

requirements and duplication by industry and public sectors.

In addition, the Department has not identified any relevant Federal

rules that duplicate, overlap or conflict with this rule. However, red

seedless grapefruit must meet the requirements as specified in the U.S.

Standards for Grades of Florida Grapefruit (7 CFR 51.760 through

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

1621 through 1627).

Further, 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. Like all

Committee meetings, the September 3, 1998, meeting was a public meeting

and all entities, both large and small, were able to express their

views on this issue. Finally, interested persons are invited to submit

information on the regulatory and informational impacts of this action

on small businesses.

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

Representative has concurred with the issuance of this interim final

rule.

After consideration of all relevant material presented, including

the Committee's recommendation, and other information, it is found that

this interim final rule, as hereinafter set forth, will tend to

effectuate the declared policy of the Act.

This rule invites comments on a change to the size requirements

currently prescribed under the marketing order for Florida citrus. Any

comments received will be considered prior to finalization of this

rule.

Pursuant to 5 U.S.C. 553, it is also found and determined, upon

good cause, that it is impracticable, unnecessary and contrary to the

public interest to give preliminary notice prior to putting this rule

into effect, and that good cause exists for not postponing the

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

Federal Register because: (1) This rule relaxes the minimum size

requirement for red seedless grapefruit grown in Florida and red

seedless grapefruit imported into the United States; (2) Florida

grapefruit handlers are aware of this action which was unanimously

recommended by the Committee, and they will need no additional time to

comply with the relaxed size requirement; (3) shipments of the 1998-99

season Florida red seedless grapefruit crop are underway; and (4) this

rule provides a 60-day comment period, and any comments received will

be considered prior to any finalization of this interim final rule.

List of Subjects

7 CFR Part 905

Grapefruit, Marketing agreements, Oranges, Reporting and

recordkeeping requirements, Tangelos, Tangerines.

7 CFR Part 944

Avocados, Food grades and standards, Grapefruit, Grapes, Imports,

Kiwifruit, Limes, Olives, Oranges.

For the reasons set forth above, 7 CFR Parts 905 and 944 are

amended as follows:

1. The authority citation for 7 CFR Parts 905 and 944 continues to

read as follows:

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

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

FLORIDA

2. In Sec. 905.306, Table I in paragraph (a) is amended by revising

the entry under ``Grapefruit'' for ``Seedless, red'' to read as

follows:

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

(a) * * *

Table I

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

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Grapefruit

* * * * * * *

Seedless, red........................ 11/9/98-11/7/99.............. U.S. No. 1................... 3\5/16\

On and after 11/8/99......... U.S. No. 1................... 3\9/16\

* * * * * * *

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* * * * *

PART 944--FRUITS; IMPORT REGULATIONS

4. In Sec. 944.106, the table in paragraph (a) is amended by

revising the entry for ``Seedless, red'' to read as follows:

Sec. 944.106 Grapefruit import regulation.

(a) * * *

[[Page 62923]]

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

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* * * * * * *

Seedless, red........................ 11/9/98-11/7/99.............. U.S. No. 1................... 3\5/16\

On and after 11/8/99......... U.S. No. 1................... 3\9/16\

* * * * * * *

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* * * * *

Dated: November 4, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 98-30115 Filed 11-6-98; 9:44 am]

BILLING CODE 3410-02-P