Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida; Modification of Procedures for Limiting the Volume of Small Red Seedless Grapefruit

Federal RegisterDec 13, 1999

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 905

[Docket No. FV99-905-4 FIR]

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

Modification of Procedures for Limiting the Volume of Small Red

Seedless Grapefruit

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting, as a

final rule, without change, the provisions of an interim final rule

modifying the procedures used in limiting the volume of small red

seedless grapefruit prescribed under the marketing order for oranges,

grapefruit, tangerines, and tangelos grown in Florida. The marketing

order is administered locally by the Citrus Administrative Committee

(committee). The changes will help the committee better monitor handler

compliance with any percentage size regulations in effect. This rule

continues the changes in handler reporting requirements on shipments of

size 48 and/or 56 red seedless grapefruit to standardize and assure

continuity of reporting. Provisions on new handlers are also continued

to assure equitable application of the percentage size regulation to

new and established handlers. These modifications are expected to help

the committee better administer the percentage size regulations, when

such regulations are effective.

EFFECTIVE DATE: January 12, 2000.

FOR FURTHER INFORMATION CONTACT: William G. Pimental, 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

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

20090-6456; telephone: (202) 690-3919, 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, P.O. 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.''

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,

and 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.

Section 905.52 of the order provides authority to limit shipments

of any grade or size, or both, of any variety of Florida citrus. Such

limitations may restrict the shipment of a portion of a specified grade

or size of a variety.

Section 905.153 of the regulations provides procedures for limiting

the volume of small red seedless grapefruit entering the fresh market.

Under the procedures, the committee may recommend that only a certain

percentage of size 48 (3\9/16\ minimum diameter in inches) and/or size

56 (3\5/16\ minimum diameter in inches) red seedless grapefruit be made

available for shipment into fresh market channels for any week or weeks

during the regulation period. The regulation period is 11 weeks long

and begins the third Monday in September. Under such a limitation, the

quantity of sizes 48 and/or 56 red seedless grapefruit that may be

shipped by a handler during a regulated week is calculated using the

recommended percentage. By taking the recommended weekly percentage

times the average weekly volume of red seedless grapefruit handled by

such handler in the previous five seasons, handlers can calculate the

volume of sizes 48 and/or 56 they may ship in a regulated week.

Provisions also are included in paragraph (a) for handlers with less

than five previous seasons of shipments and new handlers with no record

of shipments. The committee performs the specified calculations when

regulation is established by the Secretary for a given week, and

provides the calculations to each handler.

Section 905.153 contains a variety of provisions designed to

provide handlers with some marketing flexibility. Paragraphs (d) and

(e) of that section provide allowances for overshipments, loans, and

transfers of allotment. These allowances allow handlers the opportunity

to supply their markets while limiting the impact of small sizes on a

weekly basis.

Pursuant to paragraph (d) of Sec. 905.153, during any week for

which the Secretary fixes the percentage of sizes 48 and/or 56 red

seedless grapefruit, any handler can handle an amount of sizes 48 and/

or 56 red seedless grapefruit not to exceed 110

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percent of their allotment for that week. The quantity of overshipments

(the amount shipped in excess of a handler's weekly allotment) is

deducted from the handler's allotment for the following week.

If handlers fail to use their entire allotments in a given week,

the amounts undershipped cannot be carried forward to the following

week. However, pursuant to paragraph (e) of Sec. 905.153, a handler to

whom an allotment has been issued can lend or transfer all or part of

such allotment (excluding the overshipment allowance) to another

handler. In the event of a loan, each party, prior to the completion of

the loan agreement, notifies the committee of the proposed loan and

date of repayment. If a transfer of allotment is desired, each party

promptly notifies the committee so that proper adjustments of the

records can be made. In each case, the committee confirms in writing

all such transactions prior to the following week. Under these

provisions, the committee can act on behalf of handlers wanting to

arrange allotment loans or participate in the transfer of allotment.

The committee computes each handler's allotment by multiplying the

handler's average week by the percentage established by regulation for

that week. The committee notifies each handler prior to that particular

week of the quantity of sizes 48 and 56 red seedless grapefruit such

handler could handle during a particular week, making the necessary

adjustments for overshipments and loan repayments.

This rule continues in effect reporting procedures in paragraphs

(d) and (e) of Sec. 905.153, and the addition of a new paragraph (f) on

new handler participation. The changes were recommended unanimously by

the committee at its meeting on April 6, 1999.

This rule does not establish any volume regulation. A proposed rule

to establish volume regulation during the 1999-2000 season was

published in the Federal Register on August 26, 1999 (64 FR 46603). The

period for the receipt of written comments on that proposal ended

September 10, 1999. Subsequently, an interim final rule adjusting the

proposed percentages as recommended by the committee was published in

the Federal Register on September 17, 1999 (64 FR 50419). Comments were

invited until September 27, 1999, and none was received. An action

finalizing the interim final rule was published November 18, 1999 (64

FR 63159).

The changes continued in effect by this rule are intended to

standardize and foster uniformity of reporting, help the committee

better monitor compliance with any percentage size regulations in

effect, and improve overall administration of the program. The

provisions on ``new handler'' registration are intended to ensure that

the shipment calculations for such handlers are correct and that the

shipment allotments are appropriately applied. According to committee

management, these improvements have worked well.

This rule continues in effect the revisions to paragraph (d) of

Sec. 905.153 requiring handlers to report red seedless grapefruit

shipments to interstate and export markets by day for each regulation

week. The report is required to be completed and received by the

committee no later than 2 p.m. of the business day following the

shipments. The committee previously obtained shipment information from

daily manifest reports from the Florida Department of Agriculture and

Consumer Services' Fruit and Vegetable Division, but the information

needed to be reformatted by the committee for use in checking handler

compliance with the weekly percentage size regulation, and in arranging

loans or transfers of excess allotments among handlers. This had been

costly and time consuming for the committee.

When percentage size regulations were applied last season, most

handlers voluntarily supplied (electronically or by fax) the committee

with daily shipment information on their size 48 and/or 56 size red

seedless grapefruit. This helped the committee expedite the compilation

and dissemination of shipment information on the small-sized red

seedless grapefruit. The more timely information helped the handlers

make marketing plans to service their customers better, and enabled the

committee to verify handler compliance in a more timely and less

burdensome manner.

The information provided by handlers shipping 48 and/or 56 size red

seedless grapefruit is maintained by them as part of their regular

business operations so the burden in supplying this information has

been minimal. Thus, the addition of this reporting requirement to the

procedures in Sec. 905.153(d) merely standardizes the collection of

information which handlers maintain as part of their regular business

operations. The report has ensured that the daily shipment information

received by the committee is in the same format from all handlers

shipping 48 and/or 56 size red seedless grapefruit.

Paragraph (e) of Sec. 905.153 previously specified, among other

things, that each handler party to a transfer or loan of any or all of

their shipping allotment (excluding the overshipment allowance) shall

promptly notify the committee so the proper adjustment of records may

be made. To provide uniformity in reporting and help the committee

confirm such transactions prior to the following week to the handlers

involved, the committee recommended that the notification be made no

later than noon on the Wednesday following the regulation week.

With a precise reporting deadline, the committee has been able to

adjust its records in a more timely manner and more easily confirm the

transactions in writing to the handlers involved prior to the following

week. It also has enabled the committee to do a more effective job when

acting on behalf of handlers in arranging allotment loans or transfers.

Continuation of this change will not be unduly burdensome on handlers

because most had already been filing their reports by the specified

deadline prior to the issuance of the interim final rule.

The committee also recommended precluding sales agents of handlers

from filing weekly cumulative handler reports on transfers or loans for

all of the handlers they represent, rather than reports for each

handler involved in such transactions. The current provisions require

individual reports to be filed and the individual handlers involved are

required to certify that the information on the reports submitted to

the committee is accurate. Thus, no change in Sec. 905.153 is needed to

require sales agents to submit individual handler reports on such

transactions for each of the participating handlers for which they act

as sales agents.

A new paragraph (f) was added to Sec. 905.153 covering new handler

registration. The new paragraph specifies that new handlers without a

shipment history shall register with the committee for their red

seedless grapefruit allotments prior to the regulation period. On a

form provided by the committee, each new handler indicates its name,

address, telephone and fax number, its Florida citrus dealer's license

number, the packinghouse registration number issued by the Florida

Department of Agriculture and Consumer Services' Fruit and Vegetable

Division, and the physical location of the packinghouse where the red

seedless grapefruit will be prepared for market. New handler

registrations have allowed the committee to place the handler on its

[[Page 69373]]

mailing list to assure that the handler receives needed information.

The addition of these registration procedures for new handlers will

assure that these handlers continue to receive the shipment allocations

to which they are entitled during the regulation period, and help the

committee with its handler audits and compliance checks.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.

Chapter 35), the information collection requirements that are contained

in this rule have been previously approved by the Office of Management

and Budget (OMB) and have been assigned OMB No. 0581-0094. Also,

pursuant to requirements set forth in the Regulatory Flexibility Act

(RFA), 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

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 80 grapefruit handlers subject to

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

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 industry and committee data, the average annual f.o.b.

price for fresh Florida red grapefruit during the 1998-99 season was

around $7.20 per \4/5\ bushel carton, and total fresh shipments for the

1998-99 season are estimated at 14.6 million cartons of red 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 grapefruit 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

grapefruit handlers and growers may be classified as small entities.