[Federal Register: November 26, 2004 (Volume 69, Number 227)]
[Rules and Regulations]
[Page 68761-68764]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26no04-3]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 979
[Docket No. FV05-979-1 IFR]
Melons Grown in South Texas; Temporary Suspension of Handling and
Assessment Collection Regulations
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule suspends, for the 2004-05 fiscal period, the minimum
grade, quality, maturity, container, pack, inspection, assessment
collection, and other related requirements currently prescribed under
the South Texas melon (cantaloupes and honeydews) marketing order
(order). It also suspends reporting requirements, except for the
acreage planting reports, which will continue to be required during the
suspension period. The order regulates the handling of melons grown in
South Texas and is administered locally by the South Texas Melon
Committee (Committee). This rule will reduce handler costs while the
industry evaluates whether the marketing order should be continued.
DATES: Effective November 27, 2004. Comments received by January 25,
2005 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,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC
20250-0237; Fax: (202) 720-8938; E-mail: moab.docketclerk@usda.gov; or
Internet: http://www.regulations.gov. 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, or can be viewed at:
http://www.ams.usda.gov/fv/moab.html.
FOR FURTHER INFORMATION CONTACT: Belinda G. Garza, Texas Marketing
Field Office, Marketing Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1313 E. Hackberry, McAllen, Texas 78501;
telephone: (956) 682-2833, Fax: (956) 682-5942; or George Kelhart,
Technical Advisor, Marketing Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1400 Independence Avenue SW., STOP 0237,
Washington, DC 20250-0237; telephone: (202) 720-2491, Fax: (202) 720-
8938.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-
2491, Fax: (202) 720-8938, or E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement No. 156 and Order No. 979 (7 CFR part 979), regulating the
handling of melons grown in South Texas, 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 (USDA) 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 USDA 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 USDA 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 USDA's ruling on
[[Page 68762]]
the petition, provided an action is filed not later than 20 days after
the date of the entry of the ruling.
This rule suspends, for the remainder of the 2004-05 fiscal period,
the minimum grade, quality, maturity, container, pack, inspection, and
other related requirements currently prescribed under the South Texas
melon order. For the purpose of this rule, these requirements are
referred to as handling requirements. It also suspends the assessment
collection and all reporting requirements, with the exception of the
acreage planting reports, which will continue to be required during the
suspension period. This rule will reduce industry expenses, while the
industry evaluates whether the marketing order should be continued.
Section 979.52 of the order provides authority for grade, size,
maturity, quality, and pack regulations for any variety of melons grown
in the production area during any period. Section 979.52 also
authorizes the modification, suspension, or termination of regulations
issued under the order. Authority to terminate or suspend provisions of
the order is specified in Sec. 979.84.
Section 979.60 provides that whenever melons are regulated pursuant
to Sec. 979.52, such melons must be inspected by the Federal-State
Inspection Service, and certified as meeting the applicable
requirements of such regulations. The cost of such inspection and
certification is borne by handlers.
Under the order, fresh market shipments of South Texas melons are
required to be inspected and are subject to minimum grade, quality,
maturity, and container and pack requirements. Section 979.304 Handling
regulation (7 CFR part 979.304) states that no handler shall handle
cantaloupes grown in the production area unless such cantaloupes meet
the requirements specified for U.S. Commercial grade or better, except
that not more than 8 percent serious damage including not more than 5
percent decay will be permitted. Honeydew melons must also meet the
requirements U.S. Commercial grade except that not more than 20 percent
serious damage may be allowed including not more than 10 percent for
melons affected by decay. In addition, the combined juice from the
edible portion of a sample of honeydews selected at random shall
contain not less than 8 percent soluble solids as determined by an
approved hand refractometer. Individual containers of honeydew melons
may contain no less than 25 percent U.S. Commercial grade or better
quality. Individual containers of cantaloupe and honeydew melons may
contain not more than double the specified lot tolerance for scorable
defects.
The order's container and pack requirements are also specified in
Sec. 979.304. Cantaloupes and honeydew melons must be packed in
fiberboard cartons of specified dimensions. Each carton must be marked
to indicate the count; the name, address, and zip code of the shipper;
the name of the product; and the words ``Produce of U.S.A.'' or
``Product of U.S.A.'' Additionally, if the carton is not clean and
bright in appearance without marks, stains, or other evidence of
previous use, the carton must be marked with the words ``USED BOX''.
Honeydew melons may also be packed in bulk containers with specified
dimensions.
Section 979.304 further includes a minimum quantity exemption of
120 pounds per day, and reporting and safeguard requirements for
special purpose and experimental shipments. Related provisions appear
in the regulations in Sec. 979.106 Registered handlers; Sec. 979.152
Handling of culls; and Sec. 979.155 Safeguards.
The Committee meets prior to and during each season to consider
recommendations for modification, suspension, or termination of the
regulatory requirements that have been issued on a continuing basis for
South Texas melons. Committee meetings are open to the public and
interested persons may express their views at these meetings. USDA
reviews Committee recommendations and information submitted by the
Committee and other available information, and determines whether
modification, suspension, or termination of the regulatory requirements
would tend to effectuate the declared policy of the Act.
At its September 16, 2004, meeting, the Committee unanimously
recommended suspending, for the 2004-2005 fiscal period, the handling,
assessment collection, and all reporting requirements, except for the
acreage planting reporting requirement. The 2004-05 fiscal period began
October 1, 2004, and ends September 30, 2005.
The objective of the handling and inspection requirements is to
ensure that only acceptable quality cantaloupe and honeydew melons
enter fresh market channels, thereby ensuring consumer satisfaction,
increasing sales, and improving returns to growers. While the industry
continues to believe that quality is an important factor in maintaining
sales, the Committee believes that the cost of inspection and
certification (mandated when minimum requirements are in effect) may
exceed the benefits derived, especially in view of reduced melon
acreage and yields in recent years.
The South Texas cantaloupe and honeydew melon industry has been
shrinking due to the inability to provide dependable supplies because
of adverse weather conditions, a lack of success in breeding improved
quality melons buyers desire, and intense foreign and domestic
competition. South Texas historically had enjoyed a marketing window of
approximately six weeks beginning about May 1 each season. That window
has steadily eroded in recent years due to strong competition and
quality problems with Texas melons. As a result, acreage has decreased
dramatically from a high of 27,463 acres in 1987 to 4,780 in 2004. The
number of producers and handlers also has declined.
The Committee recommended suspending the regulations and assessment
collections for one fiscal period in hopes that new plants might be
developed and help revive the industry. Some in the industry believe
that the order is no longer needed. The suspensions are designed to
decrease handler costs, while the industry evaluates whether the
marketing order should be continued.
Underlying economics for the South Texas melon industry do not
justify continuing the regulations for 2004-05. Too little revenue can
be generated for an effective marketing and promotion program, and
buyer demands have superseded the regulations in dictating quality
requirements. Buyers have been requesting better quality melons.
This rule will enable handlers to ship melons without regard to the
minimum grade, quality, maturity, container, pack, inspection, and
related requirements for the 2004-2005 fiscal period. It will decrease
industry expenses associated with inspection and assessments. This rule
will not restrict handlers from seeking inspection on a voluntary
basis.
Consistent with the temporary suspension of Sec. 979.304, this
rule also suspends Sec. 979.106, Sec. 979.152, and Sec. 979.155 of
the rules and regulations in effect under the order for the 2004-2005.
Section 979.106 provides for the registration of handlers, Sec.
979.152 details procedures for the handling of cull melons, and Sec.
979.155 provides safeguard requirements for special purpose shipments
and establishes reporting and recordkeeping requirements when such
exemptions are in place.
In addition, this rule also suspends Sec. 979.219 requiring that
an assessment rate of $0.09 per carton of melons be collected from
South Texas melon
[[Page 68763]]
handlers. Consistent with suspension of Sec. 979.219, Sec. 979.112
specifying late payment charges on delinquent assessments is also
suspended. Authorization to assess melon handlers enables the Committee
to incur expenses that are necessary to administer the marketing order.
With the suspension of handling, inspection, and assessment
requirements, a limited Committee budget will be needed for program
administration and the collection of the acreage planting reports.
For the period of the suspension, the Committee recommended a
reduced budget of $70,959 to cover anticipated expenses. Adequate funds
to cover these expenses are currently in the Committee's reserves.
Initial Regulatory Flexibility Analysis
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 16 handlers of South Texas melons who are
subject to regulation under the marketing order and approximately 29
melon growers in the regulated area. Small agricultural service firms
are defined by the Small Business Administration (SBA) (13 CFR 121.201)
as those having annual receipts of less than $5,000,000, and small
agricultural growers are defined as those having annual receipts of
less than $750,000.
Most of the handlers are vertically integrated corporations
involved in growing, shipping, and marketing melons. For the 2003-04
marketing year, the industry's 16 handlers shipped melons produced on
4,780 acres with the average and median volume handled being 89,012 and
10,655 containers, respectively. In terms of production value, total
revenue for the 16 handlers was estimated to be $12,175,919, with the
average and median revenues being $760,996 and $91,094, respectively.
The South Texas melon industry is characterized by growers and
handlers whose farming operations generally involve more than one
commodity, and whose income from farming operations is not exclusively
dependent on the production of melons. Alternative crops provide an
opportunity to utilize many of the same facilities and equipment not in
use when the melon production season is complete. For this reason,
typical melon growers and handlers either double-crop melons during
other times of the year or produce alternative crops, like onions.
Based on the SBA's definition of small entities, the Committee
estimates that all of the 16 handlers regulated by the order would be
considered small entities if only their spring melon revenues are
considered. However, revenues from other productive enterprises might
push a number of these handlers above the $5,000,000 annual receipt
threshold. Of the 29 growers within the production area, few have
sufficient acreage to generate sales in excess of $750,000; therefore,
the majority of growers may be classified as small entities.
At its September 16, 2004, meeting, the Committee unanimously
recommended suspending, for the 2004-2005 fiscal period, the handling,
assessment collection, and all reporting requirements, except for the
acreage planting reporting requirement. The Committee requested that
the rule be effective for the 2004-05 fiscal period, which began
October 1, 2004, and ends September 30, 2005.
The objective of the handling and inspection requirements is to
ensure that only acceptable quality cantaloupe and honeydew melons
enter fresh market channels, thereby ensuring consumer satisfaction,
increasing sales, and improving returns to growers. While the industry
continues to believe that quality is an important factor in maintaining
sales, the Committee believes that the cost of inspection and
certification (mandated when minimum requirements are in effect) may
exceed the benefits derived, especially in view of reduced melon
acreage and yields in recent years. This results in reduced melon
shipments and reduced assessment income.
The South Texas cantaloupe and honeydew melon industry has been
shrinking due to the inability to provide dependable supplies because
of adverse weather conditions, a lack of success in breeding improved
quality melons buyers desire, and intense foreign and domestic
competition. South Texas historically had enjoyed a marketing window of
approximately six weeks beginning about May 1 each season. That window
has steadily eroded in recent years due to strong competition and
quality problems in Texas melons. As a result, acreage has decreased
dramatically from a high of 27,463 acres in 1987 to 4,780 in 2004. The
number of producers and handlers also has declined. Some in the
industry believe that the marketing order is no longer needed.
Underlying economics for the South Texas melon industry do not
justify continuing the regulations for 2004-05. Too little assessment
revenue can be generated for an effective marketing and promotion
program, and buyer demands have superseded the regulations in dictating
quality requirements.
This rule will enable handlers to ship melons without regard to the
minimum grade, quality, maturity, container, pack, inspection, and
related requirements for one fiscal period. It will decrease industry
expenses associated with inspection and assessments. This rule will not
restrict handlers from seeking inspection on a voluntary basis.
In addition, this rule also suspends Sec. 979.219 requiring that
an assessment rate of $0.09 per carton of melons be collected from
South Texas melon handlers. Consistent with suspension of Sec.
979.219, Sec. 979.112 specifying late payment charges on delinquent
assessments is also suspended. Authorization to assess melon handlers
enables the Committee to incur expenses that are necessary to
administer the marketing order.
With the suspension of handling, inspection, and assessment
requirements, a limited Committee budget will be needed for program
administration and collection of acreage planting reports. For the
period of the suspension, the Committee recommended a reduced budget of
$70,959 to cover anticipated expenses. Adequate funds to cover these
expenses are currently in the Committee's reserves.
The Committee anticipates that this rule will not negatively impact
small businesses. This rule will suspend minimum grade, quality,
maturity, container, pack, inspection, assessment collection, some
reporting, and other related requirements. Further, this rule will
allow handlers and growers the choice to obtain inspection for melons,
as needed, thereby reducing costs for the industry. The total cost of
inspection and certification for fresh shipments of South Texas melons
during the 2003-04 marketing season was $46,000. These costs will not
be incurred during the 2004-2005 season.
The suspension of the assessment collection requirements for the
2004-05 season will also result in some cost savings. Assessment
collections during
[[Page 68764]]
the 2003-04 season totaled $102,988. Absent the suspension of Sec.
979.219, assessments collected during the 2004-05 season would have
been about $292,840.
The Committee considered suspension of the marketing order, but
wished to continue receiving data on plantings for a one-year period
before deciding whether the order should be continued.
It is possible that the Committee might recommend that the order be
terminated after the 2004-2005 season if conditions do not improve.
Some Committee members felt that termination was premature, while
others felt the order should be immediately eliminated. The Committee
recommended the suspension of regulations for one fiscal period as an
orderly and reasonable compromise. This will enable the committee to
study the impact of suspension, allow the continued collection of data
on acreage projections, and minimize disruption if the Committee
chooses to recommend termination after the 2004-2005 fiscal period.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the information collection requirements being suspended by
this rule were approved previously by the Office of Management and
Budget (OMB) and assigned OMB No. 0581-0178. Suspension of some of the
reporting requirements is expected to reduce the reporting burden on
small or large South Texas melon handlers by 6.12 hours, and should
further reduce industry expenses. During the suspension period,
handlers will not have to file the following forms with the Committee:
Application for Registered Handler (1.74 burden hours); Certification
for Handling Melons for Processing (0.70 burden hours); Relief or
Charity Certification for Handling Melons Which Fail to Meet the South
Texas Rules and Regulations (0.35 burden hours); Certificate of
Privilege (0.83 burden hours); and Special Purpose Shipment (2.50
hours). This rule will not impose any additional reporting or
recordkeeping requirements on either small or large melon handlers. As
with all Federal marketing order programs, reports and forms are
periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies.
In addition, USDA has not identified any relevant Federal rules
that duplicate, overlap or conflict with this rule.
Further, the Committee's meeting was widely publicized throughout
the melon industry and all interested persons were invited to attend
the meeting and participate in Committee deliberations. Like all
Committee meetings, the September 16, 2004, 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: 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.
This rule invites comments on suspension of the handling,
assessment collection, and some reporting regulations currently
prescribed under the South Texas melon marketing order. Any comments
received will be considered prior to finalization of this rule.
After consideration of all relevant material presented, including
the Committee's recommendation, and other information, it is found that
the regulations suspended by this interim final rule, as hereinafter
set forth, no longer tend to effectuate the declared policy of the Act.
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 rule until 30 days after publication in the Federal Register
because: (1) The rule suspends the current handling, assessment
collection, some reporting requirements, and related regulations for
South Texas melons for the remainder of the 2004-2005 fiscal period;
(2) this rule was recommended by the Committee at an open public
meeting and all interested persons had an opportunity to express their
views and provide input; (3) South Texas melon handlers are aware of
this rule and need no additional time to comply with the relaxed
requirements; and (4) this rule provides a 60-day comment period and
any comments received will be considered prior to finalization of this
rule.
List of Subjects in 7 CFR Part 979
Marketing agreements, Melons, Reporting and recordkeeping
requirements.
0
For the reasons set forth in the preamble, 7 CFR part 979 is amended as
follows:
PART 979--MELONS GROWN IN SOUTH TEXAS
0
1. The authority citation for 7 CFR part 979 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. In Part 979, Sec. Sec. 979.106, 979.112, 979.152, 979.155, 979.219,
and 979.304 are suspended in their entirety effective November 27,
2004, through September 30, 2005.
Dated: November 19, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-26120 Filed 11-24-04; 8:45 am]
BILLING CODE 3410-02-P