Tomatoes Grown in Florida; Partial Exemption From the Handling Regulation for Producer Field-Packed Tomatoes

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. FV98-966-2 IFR]

Tomatoes Grown in Florida; Partial Exemption From the Handling

Regulation for Producer Field-Packed Tomatoes

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule amends a prior interim final rule that changed the

handling requirements prescribed under the Florida tomato marketing

order (order). The order regulates the handling of tomatoes grown in

Florida and is administered locally by the Florida Tomato Committee

(committee). The prior interim final rule exempted shipments of

producer field-packed tomatoes from container net weight requirements

and the requirement that all tomatoes must be packed at registered

handler facilities. This rule exempts shipments of certain-sized

producer field-packed tomatoes from a maximum size requirement

specified in the handling regulation. These changes allow the industry

to pack a higher colored, riper tomato to meet the demand of the

expanding market for vine-ripe tomatoes. This facilitates the movement

of Florida tomatoes and should ultimately improve returns to producers.

DATES: Effective October 10, 1999; comments received by October 19,

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, DC 20090-6456; Fax: (202) 720-5698; 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: Christian D. Nissen, Regional Manager,

Southeast Marketing Field Office, 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

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Branch, F&V, AMS, USDA, room 2522-S, P.O. Box 96456, Washington, DC

20090-6456; telephone: (202) 720-2491, Fax: (202) 720-5698.

SUPPLEMENTARY INFORMATION: 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) 720-5698, or E-mail: Jay.G[email protected]. You may

view the marketing agreement and order small business compliance guide

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

This rule is issued under Marketing Agreement No. 125 and Order No.

966 (7 CFR part 966), both as amended, regulating the handling of

tomatoes 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 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 the date of the entry of the ruling.

Under the order, tomatoes produced in the production area and

shipped to fresh market channels outside the regulated area are

required to meet grade, size, inspection, and container requirements.

These requirements apply during the period October 10 through June 15

each year. Current requirements include a minimum grade of U.S. No. 2

and a minimum size of 2\9/32\ inches in diameter. Current pack and

container requirements outline the types of information that needs to

appear on a container, weight restrictions the packed containers must

meet, and that the containers must be packed at registered handler

facilities.

Section 966.52 of the order provides authority for the

modification, suspension, and termination of regulations. It includes

the authority to establish and modify pack and container requirements

for tomatoes grown in the defined production area and handled under the

order. Section 966.323 of the order's rules and regulations specifies

the handling regulation for Florida tomatoes.

This rule amends an interim final rule published in the Federal

Register on October 13, 1998 (63 FR 54556). That rule, which was based

on a unanimous recommendation from the committee made at a meeting on

September 11, 1998, changed the handling regulation under the order by

defining producer field-packed tomatoes and allowing handlers to ship

field-packed tomatoes exempt from net weight requirements. That rule

also exempted producer field-packed tomatoes from the requirement that

all tomatoes be packed at registered handler facilities. Currently,

those tomatoes are subject to all other provisions of the handling

regulation, including established grade, size, pack, and inspection

requirements. Those tomatoes are also subject to assessments.

This amended interim final rule, which is based on a unanimous

recommendation from the committee made at a meeting on May 26, 1999,

exempts shipments of certain-sized producer field-packed tomatoes from

a maximum diameter requirement specified in the handling regulation.

Specifically, field-packed tomatoes designated as size ``6 x 6'' may

be larger than 2\27/32\ inches in diameter. This rule makes a related

change to the labeling requirement for 6 x 6-sized field-packed

tomatoes. The field-packed tomato exemption is also revised for

clarity.

Producer field-packed tomatoes are tomatoes which at the time of

inspection are No. 3 color or higher (according to color classification

requirements in the U.S. tomato standards), that are picked and place-

packed in new containers in the field by a producer as defined in

Sec. 966.150 of the rules and regulations. The tomatoes are then

transferred to a registered handler's facility for final preparation

for market and for inspection.

Most tomatoes from Florida are packed and shipped at the mature

green stage. Shipments of mature green tomatoes represented

approximately 88 percent of total fresh shipments during the 1997-98

season. Tomatoes are picked and packed at the mature green stage to

facilitate handling. The vast majority of mature green tomatoes are

packed using a mechanized process. The tomatoes are brought to the

packing house where they are run across sizing equipment, and then are

packed in volume fill containers. At the mature green stage, the

tomatoes are firm and are able to tolerate the packing process. This

process is efficient and facilitates packing in volume.

However, when trying to pack a tomato that is more ripe and mature,

the process used to pack mature greens is not as effective. This is

because as the tomato begins to ripen it begins to soften. Tomatoes of

No. 3 color and above cannot tolerate the rigors of the mechanized

handling process. This packing process bruises and damages riper

tomatoes, increasing the volume of culls and those that fail inspection

for grade.

Under this exemption, producer field-packed tomatoes are only

handled once, when such tomatoes are picked and packed in the field.

Field-packed tomatoes are not subject to the rigors of a mechanical

process. Under this process, the tomatoes are still sized, cleaned, and

packed by hand. This process of picking and packing in the field makes

it substantially easier to pack a tomato of higher color and ripeness.

As per the requirement for all packed tomatoes for shipment outside the

regulated area, new boxes must be used. The tomatoes are delivered to a

registered handler for final preparation for market. The tomatoes are

inspected for grade, size, and proper pack after delivery to the

registered handler's facility.

However, since this exemption has been available and growers and

handlers have been utilizing it, a problem has emerged. Because the

tomatoes are packed in the field, the tomatoes are sized by hand, not

using the precision of sizing belts. While field packed tomatoes are

successfully meeting minimum size requirements, some lots are having

difficulty meeting the maximum size requirements as specified for the 6

x 6 size designation.

Currently, Sec. 966.323(a)(2)(i) specifies that all tomatoes packed

by a registered handler must meet a minimum size requirement of 2\9/32\

inches in diameter. That section also requires that all such

[[Page 45411]]

tomatoes must be sized with proper equipment in one of three specified

ranges of diameter. For example, tomatoes designated as ``6 x 7''

must be a minimum of 2\9/32\ inches in diameter and a maximum of 2\19/

32\ inches in diameter. Tomatoes designated as ``6 x 6'' must be a

minimum of 2\17/32\ inches in diameter and a maximum of 2\27/32\ inches

in diameter. Tomatoes designated as ``5 x 6'' must be a minimum of

2\25/32\ inches in diameter with no maximum size requirement. Finally,

to allow for variations incident to proper sizing, not more than a

total of 10 percent, by count, of the tomatoes in the lot may be

smaller than the specified minimum diameter or larger than the maximum

diameter.

Since the handling regulation was changed in October 1998 to exempt

field-packed tomatoes from certain handling requirements, some 6 x 6-

sized lots have failed inspection due to oversized tomatoes in the

pack. As stated above, 6 x 6-sized lots of tomatoes must meet both

minimum and maximum size requirements, within specified tolerances.

Tomatoes that are run over a sizing belt in a packing house have little

difficulty in meeting these requirements. However, producers packing

tomatoes in the field must use hand-sizers. It is relatively easy to

pick to a minimum size. However, it is much more difficult to pick

tomatoes within a range of fractions of an inch.

Presenting a packed lot of tomatoes for inspection, and having it

fail is costly. The handler can either find an outlet other than the

fresh market for the tomatoes or rework the lot so it passes

inspection. In the case of field packed tomatoes, reworking a lot is

substantially more difficult. The tomatoes cannot be dumped then run

across the machinery again to ensure that they meet inspection, but

must be sorted through by hand. This is extremely time-consuming, and

because the fruit is ripe, can cause additional bruising. In most

cases, it is one or two tomatoes in a box that cause it to fail for

size. Thus, the committee met in May 1999 and recommended this change

for producer field-packed tomatoes.

The committee recommended that 6 x 6-sized producer field-packed

tomatoes be exempt from the 2\27/32\ inch maximum diameter requirement

specified in Sec. 966.323(a)(2)(i) of the handling regulation. This

change will allow for additional oversized tomatoes, without the lot

failing for size. While this change does allow for additional larger

tomatoes to be included in the 6 x 6 pack, there is still a

distinction between it and the 5 x 6. The 6 x 6 pack is an

opportunity to sell a smaller tomato. This change provides some

additional flexibility to address sizing problems relating to packing

in the field. The 5 x 6 tomato is still the premium size, demanding

the higher price. For this reason, the vast majority of tomatoes that

meet the size requirements for 5 x 6 will continue to be packed in a

5 x 6 container. Also, according to the committee, buyers should not

object to oversized fruit in the 6 x 6 pack because they have the

option of grading it out for a premium product or passing it on to

their customers as a larger tomato at a less expensive price.

The committee also recommended a related change in the labeling

requirement specified in Sec. 966.323(a)(2)(iii) of the handling

regulation. Currently, that section requires that only ``6 x 7,'' ``6

x 6,'' or ``5 x 6'' be used to indicate the respective size

designation on containers of tomatoes. The committee recommended that

shipments of 6 x 6-sized producer field-packed tomatoes be marked as

``6 x 6 and larger'' to more accurately reflect the contents of the

container which could include 5 x 6-sized tomatoes. The words ``and

larger'' will not be required on 5 x 6-sized field-packed tomatoes

because that is the largest designated size defined by a minimum

diameter and includes all sizes above that minimum.

In evaluating alternatives to this change, such as increasing the

percentage tolerance for oversize, it was concluded that the changes

provided in this amended interim final rule are the better and more

effective way to accomplish the committee's goal. Containers will be

marked ``6 x 6 and larger'' which will separate them from the

standard 6 x 6 and will tell buyers that the package includes some

larger tomatoes. And, as stated earlier, while this does provide for

additional larger tomatoes to be packed in a 6 x 6 pack, it should

not blur the distinction between a 6 x 6 and 5 x 6.

The committee continues to focus on ways to be competitive, develop

new markets, and increase producer returns. The October 1998 changes

which added a definition of field-packed tomatoes to the handling

regulation, along with certain exemptions for such tomatoes, have

provided the industry with more flexibility and additional marketing

opportunities. The committee believes that the availability of producer

field-packed tomatoes will increase the volume of vine-ripe tomatoes

available from Florida. This has been a market that has been expanding

and not traditionally served by much volume from the Florida tomato

industry. The October 1998 changes have allowed producers to harvest

tomatoes that might otherwise have been left in the field. Handlers may

be willing to pay a higher price for producer field-packed tomatoes

which, when combined with additional tomato sales, should increase

returns to producers. The additional exemptions for field-packed

tomatoes designated as size 6 x 6 recommended by the committee in May

1999 will provide even more opportunities for the Florida tomato

industry to market such tomatoes.

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

or maturity requirements are in effect for certain commodities under a

domestic marketing order, including tomatoes, imports of that commodity

must meet the same or comparable requirements. However, the Act does

not authorize the imposition of pack and container requirements on

imports, when such requirements are in effect under a domestic

marketing order. Therefore, no change is necessary in the tomato import

regulation as a result of this action.

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.

There are approximately 65 handlers of Florida tomatoes who are

subject to regulation under the order and approximately 75 tomato

producers in the regulated area. Small agricultural service firms,

which includes handlers, 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 available industry and committee data, the average annual

f.o.b. price for fresh Florida tomatoes during the 1997-98 season was

around $9.11 per 25 pound equivalent, and total fresh shipments for the

1997-98 season are estimated at 47.6 million 25 pound equivalent

cartons of tomatoes.

[[Page 45412]]

Committee data indicates that approximately 20 percent of the Florida

handlers handle 80 percent of the total volume shipped outside the

regulated area. Based on this information, the shipment information for

the 1997-98 season, and the 1997-98 season average price, the majority

of handlers would be classified as small entities as defined by the

SBA. The majority of producers of Florida tomatoes also may be

classified as small entities.

This rule amends a prior interim final rule that changed the

handling regulation specified in Sec. 966.323 under the order. The

prior interim final rule was published in the Federal Register on

October 13, 1998 (63 FR 54556). That rule modified Sec. 966.323 by

adding a definition for producer field-packed tomatoes, and exempting

such tomatoes from container net weight requirements and the

requirement that all tomatoes must be packed at registered handler

facilities.

In addition, this amended interim final rule exempts shipments of

field-packed tomatoes designated as size 6 x 6 from a maximum

diameter requirement of 2\27/32\ inches specified in

Sec. 966.323(a)(2)(i). This rule makes a related change in the labeling

requirement specified in Sec. 966.323(a)(2)(iii) whereby shipments of 6

x 6-sized producer field-packed tomatoes must be marked as ``6 x 6

and larger'' to more accurately reflect the contents of the container.

Authority for these changes is provided in Sec. 966.52 of the order.

This amendment with its additional flexibility is expected to have

a positive impact on affected entities. The committee believes that

allowing ripe tomatoes to be place packed in the field has enabled the

Florida tomato industry to meet a strong and growing consumer demand

for red, mature tomatoes. This has facilitated the movement of Florida

tomatoes and helped to improve producer returns.

This rule will provide additional handling flexibility and cost

savings. While field packed tomatoes are successfully meeting minimum

size requirements, some lots are having difficulty meeting the maximum

size requirements as specified for the 6 x 6 size designation.

Tomatoes designated as ``6 x 6'' must be a minimum of 2\17/32\ inches

in diameter and a maximum of 2\27/32\ inches in diameter. Tomatoes that

are run over a sizing belt in a packing house have little difficulty in

meeting these requirements. However, producers packing tomatoes in the

field must use hand-sizers. It is relatively easy to pick to a minimum

size. However, it is much more difficult to pick tomatoes within a

range of fractions of an inch. Presenting a packed lot of tomatoes for

inspection, and having it fail is costly. The handler can either find

an outlet other than the fresh market for the tomatoes or rework the

lot so it passes inspection. In the case of field packed tomatoes,

reworking a lot is substantially more difficult. The tomatoes cannot be

dumped then run across the machinery again to ensure that they meet

inspection, but must be sorted through by hand. This is costly and

time-consuming, and because the fruit is ripe, can cause additional

bruising. This change will allow for additional oversized tomatoes,

without the lot failing for size, providing additional flexibility and

reducing reworking costs.

These changes are intended to provide additional flexibility for

all those covered under the order. The opportunities and benefits of

this rule are expected to be equally available to all tomato handlers

and producers regardless of their size of operation. These changes have

a beneficial impact on producers and handlers since tomato handlers can

make additional supplies of tomatoes available to meet consumer needs

consistent with crop and market conditions.

Regarding alternatives to the recommended action, the committee

concluded that providing certain exemptions for field-packed tomatoes

would allow the Florida tomato industry to meet a growing consumer

demand for vine-ripe tomatoes. In addition, continuing to require 6 x

6-sized field-packed tomatoes to meet a maximum size requirement would

discourage producers from packing such fruit because some of the packs

would fail inspection. In evaluating alternatives to this change, such

as increasing the percentage tolerance for oversize, it was concluded

that the changes provided in this amended interim final rule are the

better and more effective way to accomplish the committee's goal.

Containers will be marked ``6 x 6 and larger'' which will separate

them from the standard 6 x 6 and will tell buyers that the package

includes some larger tomatoes. And, as stated earlier, while this does

provide for additional larger tomatoes to be packed in a 6 x 6 pack,

it does not blur the distinction between a 6 x 6 and 5 x 6. Thus,

the recommended change was determined to be the most viable course of

action.

This rule will not impose any additional reporting or recordkeeping

requirements on either small or large tomato handlers. As with all

Federal marketing order programs, reports and forms are periodically

reviewed to reduce information 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.

Further, the committee's meetings on September 11, 1998, and May

23, 1999, were widely publicized throughout the tomato industry and all

interested persons were invited to attend the meetings and participate

in committee deliberations. Like all committee meetings, the September

1998 and May 1999 meetings were public meetings 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.

As previously stated, an interim final rule regarding field-packed

tomatoes was published in the Federal Register on October 13, 1998 (63

FR 54556). A 60-day comment period was provided to allow interested

persons to respond to the rule. Copies of the rule were mailed by

committee staff to all committee members and tomato handlers. In

addition, the rule was made available through the Internet by the

Office of the Federal Register. Four comments were received regarding

the rule. These comments and any submitted regarding this amendment

will be addressed in the rule finalizing this action. This interim

final rule is effective October 10, 1999. This date is the beginning of

the new Florida tomato shipping season.

After consideration of all relevant material presented, including

the committee's recommendations and other information, it is found that

this rule, as hereinafter set forth, will tend to effectuate the

declared policy of the Act.

This rule invites comments on changes to the handling requirements

currently prescribed under the Florida tomato marketing order. 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 because: (1) These changes relax current requirements; (2) the

1999-2000 Florida tomato season begins October 10; (3) the committee

unanimously recommended these changes at public meetings and interested

parties had an opportunity to provide input; and (4) this rule provides

a 60-day comment period and any comments received will be considered

prior to finalization of this rule.

[[Page 45413]]

List of Subjects in 7 CFR Part 966

Marketing agreements, Reporting and recordkeeping requirements,

Tomatoes.

For the reasons set forth in the preamble, 7 CFR part 966 is

amended as follows:

PART 966--TOMATOES GROWN IN FLORIDA

1. The authority citation for 7 CFR part 966 continues to read as

follows:

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

2. Section 966.323 is amended by revising the last sentence of

paragraph (d)(1) to read as follows:

Sec. 966.323 Handling regulation.

* * * * *

(d) Exemption. (1) * * * Producer field-packed tomatoes must meet

all of the requirements of this section except for the following: the

container net weight requirements specified in paragraph (a)(3)(i) of

this section; the requirement that each container or lid shall be

marked to indicate the designated net weight specified in paragraph

(a)(3)(ii) of this section; the requirement that all containers must be

packed at registered handler facilities as specified in paragraph

(a)(3)(ii) of this section; the requirement that such tomatoes

designated as size 6 x 6 must meet the maximum diameter requirement

specified in paragraph (a)(2)(i) of this section and the labeling

requirement specified in paragraph (a)(2)(iii) of this section:

Provided, That ``6 x 6 and larger'' is used to indicate the listed

size designation on containers.

* * * * *

Dated: August 17, 1999.

Eric M. Forman,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 99-21674 Filed 8-19-99; 8:45 am]

BILLING CODE 3410-02-P