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 FIR]

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: 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

relaxing 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) under

the Florida citrus marketing order. The marketing order regulates the

handling of oranges, grapefruit, tangerines, and tangelos grown in

Florida and is administered locally by the Citrus Administrative

Committee (Committee). This rule continues to allow 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.

EFFECTIVE DATE: May 3, 1999.

FOR FURTHER INFORMATION CONTACT: William G. Pimental, Southeast

Marketing Field Office, Marketing Order Administration Branch, F&V,

AMS, USDA, PO 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, 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, PO Box 96456,

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

5698, 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 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 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 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 rule continues in effect changes to the order's rules and

regulations relaxing 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. This rule allows for the continued shipment of size 56 red

seedless grapefruit. Absent this relaxation, the minimum size would be

size 48 (3\9/16\ inches diameter). 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 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 final rule continues the adjustment to Table I establishing 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 944.106). This final rule

also continues the adjustment Sec. 944.106 establishing 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

[[Page 15635]]

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.

During the first 11 weeks of the season (September 21 through

December 6) a volume regulation limited the volume of small red

seedless grapefruit entering the fresh market. That action was

successful in moving smaller-sized fruit to those markets demanding

such sizes (63 FR 51511, September 28, 1998; 64 FR 3807, January 26,

1999). The Committee agreed that this regulation helped reduce the

negative effects of size 56 on the domestic market.

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 because 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 continues to relax 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

continues the minimum size requirement for imported red seedless

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

1999, to reflect the relaxation 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 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 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 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 handlers 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 specifies minimum grade and size requirements for different

varieties of fresh Florida grapefruit. This rule continues to relax 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

relaxation, the minimum size requirement for domestic shipments would

be size 48. The motion to allow shipments of size 56 red seedless

grapefruit through November 7, 1999, was passed by the Committee

unanimously. In addition, there was a volume regulation in effect for

the first 11 weeks of this season (September 21 through December 6)

that limited the volume of small red seedless grapefruit entering the

fresh market (63 FR 51511, September 28, 1998; 64 FR 3807, January 26,

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.

This rule continues to relax 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

[[Page 15636]]

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 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 were 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 final rule.

An interim final rule concerning this action was published in the

Federal Register on November 10, 1998 (63 FR 62919). Copies of the rule

were mailed by the Committee's staff to all Committee members and

grapefruit handlers. In addition, the rule was made available through

the Internet by the Office of the Federal Register. That rule provided

for a 60-day comment period which ended January 11, 1999. No comments

were received.

After consideration of all relevant material presented, including

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

finalizing the interim final rule, without change, as published in the

Federal Register (63 FR 62919, November 10, 1998) will tend to

effectuate the declared policy of the Act.

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.

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

FLORIDA

PART 944--FRUITS; IMPORT REGULATIONS

Accordingly, the interim final rule amending 7 CFR parts 905 and

944 which was published at 63 FR 62919 on November 10, 1998, is adopted

as a final rule without change.

Dated: March 26, 1999.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 99-8067 Filed 3-31-99; 8:45 am]

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