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. FV99-905-6 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 relaxes the minimum size requirement for red

seedless grapefruit grown in Florida 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 the change for Florida grapefruit.

The change in the import regulation is required under section 8e of the

Agricultural Marketing Agreement Act of 1937. This change allows

handlers and importers to ship size 56 red seedless grapefruit through

November 12, 2000, and is expected to maximize grapefruit shipments to

fresh market channels.

DATES: Effective November 8, 1999, through November 12, 2000; comments

received by January 3, 2000 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 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) 299-4770, Fax: (941) 299-5169; or

George Kelhart, Technical Advisor, Marketing Order Administration

Branch, F&V, AMS, USDA, room 2522-S, PO Box 96456, Washington, DC

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

Small businesses may request information on complying with this

regulation by contacting Jay Guerber, Marketing Order Administration

Branch, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, PO Box

96456, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202)

720-5698, or E-mail: Jay.G[email protected].

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 the 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 requirement 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 7, 1999, 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

[[Page 58760]]

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

16\ inches in diameter) through November 12, 2000. Absent this change,

the minimum size would revert to size 48 (3\9/16\ inches in diameter)

on November 8, 1999. The Committee met on August 31, 1999, 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 905.306) 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 12, 2000. Minimum grade and size requirements for grapefruit

imported into the United States are currently in effect under

Sec. 944.106 (7 CFR 944.106). This rule also adjusts Sec. 944.106 to

establish a minimum size of 56 through November 12, 2000. Export

requirements for Florida red seedless grapefruit are not changed by

this rule.

In making its recommendation, the Committee considered estimated

supply and demand. While the official crop estimate will not be

available until October, the supply of red seedless grapefruit is

expected to be below last year's production of 28.7 million 1\3/5\

bushel boxes. Acreage has declined in recent years from 81,348 acres in

1996, to 76,025 acres in 1998, to 71,731 acres in 1999. Losses are due

to groves being abandoned due to economic reasons, unhealthy groves

being removed and replanted, and sick and diseased trees being removed

from healthy, productive groves and not being replanted.

The Committee anticipates that fresh shipments of red seedless

grapefruit will be at or below last season's level of 14.6 million \4/

5\ bushel cartons. The quality of this year's crop is anticipated to be

normal to above normal. However, the fruit is expected to be misshapen

more than normal. All growing districts appear to be affected by poorly

shaped fruit, which could reduce the packout percentages for the 1999-

2000 crop. The individual fruit size for the upcoming crop is projected

to be a little smaller than normal, but not as small as last season.

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 1999-2000 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, because it will permit Florida grapefruit handlers to make

available the sizes of fruit needed to meet consumer needs. Matching

the sizes with consumer needs is consistent with current and

anticipated demand for the 1999-2000 season, and will maximize

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 seedless grapefruit is for export.

Committee members stated that during the first 11 weeks of the

season (September 20 through December 5), there will likely be a volume

regulation in effect to limit the volume of small red seedless

grapefruit that can enter the fresh market. The Department has since

issued such a rule, which was published on September 17, 1999 (64 FR

50419). The Committee believes that the percentage size regulation has

been helpful in reducing the negative effects of size 56 on the

domestic market, and that no additional restrictions are needed for the

upcoming season.

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 12, 2000.

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 1999-

2000 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 12,

2000, 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 include 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 1998-99 season,

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

grapefruit during the 1998-99 season was around $7.60 per \4/5\ bushel

carton, and total fresh shipments for the 1998-99 season are estimated

at 14.6 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

[[Page 58761]]

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.

Handlers in Florida shipped approximately 37,395,000 \4/5\ bushel

cartons of grapefruit to the fresh market during the 1998-99 season. Of

these cartons, about 22,123,000 were exported. In the past three

seasons, domestic shipments of Florida grapefruit averaged about

16,720,000 cartons. During the period 1994 through 1998, imports have

averaged about 600,000 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 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 in diameter) to size 56 (3\5/16\ inches in

diameter) through November 12, 2000. No change is being made in the

minimum size 56 requirement for export shipments. Absent this rule, the

minimum size requirement for domestic shipments would have reverted to

size 48 on November 8, 1999. The motion to allow shipments of size 56

red seedless grapefruit through November 12, 2000, was passed by the

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

effect for the first 11 weeks of the 1999-2000 season (September 22

through December 5) that limits the volume of small red seedless

grapefruit that can enter the fresh market (64 FR 50419, September 17,

1999).

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, or the grapefruit import regulation.

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

diameter) to size 56 (3\5/16\ inches in diameter) through November 12,

2000. 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. Matching the sizes that can be shipped

with consumer needs is consistent with current and anticipated demand

for the 1999-2000 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 handlers 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.

During the period October 1, 1998, through June 30, 1999, imports

of grapefruit totaled 15,500 metric tons (approximately 800,000

cartons). Recent yearly data indicate that imports during July, August,

and September are typically negligible. Therefore, the 1998-99 season

imports should not vary significantly from 15,500 metric tons. The

Bahamas were the principal source, accounting for 95 percent of the

total. Remaining imports were supplied by the Dominican Republic and

Israel. Most imported grapefruit enters the United States from October

through May.

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. Because

this rule changes the minimum size for domestic red seedless grapefruit

shipments, this change must also be applicable to imported grapefruit.

This rule relaxes the minimum size for imported grapefruit 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 12, 2000.

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 51.750 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 August 31, 1999, 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.

A small business guide on complying with fruit, vegetable, and

specialty crop marketing agreements and orders may be viewed at the

following website: http://www.ams.usda.gov/fv/moab.html. Any questions

about the compliance guide should be sent to Jay Guerber at the

previously mentioned address in the FOR FURTHER INFORMATION CONTACT

section of this document.

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 requirement

currently prescribed under the marketing order for Florida citrus and

the grapefruit import regulation. 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

[[Page 58762]]

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) this action is similar to actions taken in past

seasons and grapefruit handlers and importers need no additional time

to comply with the relaxed size requirement; (3) Florida grapefruit

handlers are aware of this action which was unanimously recommended by

the Committee; (4) shipments of the 1999-2000 season Florida red

seedless grapefruit crop are underway; and (5) 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 for ``Seedless, red'' to read as follows:

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

(a) * * *

Table I

----------------------------------------------------------------------------------------------------------------

Minimum

Variety Regulation period Minimum grade diameter

(inches)

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

----------------------------------------------------------------------------------------------------------------

* * * * * *

*

GRAPEFRUIT

* * * * * *

*

Seedless, red............................ 11/8/99-11/12/00 On and U.S. No. 1................. 3\5/16\

after 11/13/00. U.S. No. 1................. 3\9/16\

* * * * * *

*

----------------------------------------------------------------------------------------------------------------

* * * * *

PART 944--FRUITS; IMPORT REGULATIONS

4. In Sec. 944.106(a), the table is amended by revising the entry

for ``Seedless, red'' to read as follows:

Sec. 944.106 Grapefruit import regulation.

(a) * * *

----------------------------------------------------------------------------------------------------------------

Minimum

Grapefruit classification Regulation period Minimum grade diameter

(inches)

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

----------------------------------------------------------------------------------------------------------------

* * * * * *

*

Seedless, red............................ 11/8/99-11/12/00 On and U.S. No. 1................. 3\5/16\

after 11/13/00. U.S. No. 1................. 3\9/16\

* * * * * *

*

----------------------------------------------------------------------------------------------------------------

[[Page 58763]]

* * * * * * *

Dated: October 25, 1999.

Eric M. Forman,

Acting Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 99-28372 Filed 10-29-99; 8:45 am]

BILLING CODE 3410-02-P