[Federal Register: December 8, 2004 (Volume 69, Number 235)]
[Rules and Regulations]
[Page 70874-70877]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08de04-3]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 905
[Docket No. FV04-905-5 FIR]
Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida;
Modification of the Procedures Used To Limit the Volume of Small Red
Seedless Grapefruit Grown in Florida
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final
rule, without change, an interim final rule that changed the procedures
used to limit the volume of sizes 48 and 56 red seedless grapefruit
entering the fresh market under the marketing order for oranges,
grapefruit, tangerines, and tangelos grown in Florida (order). The
order is administered locally by the Citrus Administrative Committee
(Committee). This rule continues in effect changes in the way a
handler's average week is calculated when quantities of small red
seedless grapefruit are regulated and changes the provisions governing
overshipments. This action makes the regulation more responsive to
industry needs and better allocates base quantities.
DATES: Effective January 7, 2005.
FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Southeast Marketing
Field Office, Marketing Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 799 Overlook Drive, Suite A, Winter
Haven, Florida 33884; telephone: (863) 324-3375, Fax: (863) 325-8793;
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. 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 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.''
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 the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
This rule continues in effect changes in the procedures used to
limit the volume of sizes 48 and 56 red seedless
[[Page 70875]]
grapefruit entering the fresh market. This rule changes the way a
handler's average week is calculated when quantities of small red
seedless grapefruit are regulated by adjusting the prior period used
from five preceding seasons to three preceding seasons. This action
also changes the provisions governing overshipments. This rule makes
the regulation more responsive to industry needs and better allocates
base quantities. The Committee unanimously recommended these changes at
a meeting held on June 15, 2004.
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. Under such a limitation, the quantity of such
grade or size a handler may ship during a particular week would be
established as a percentage of the total shipments of such variety by
such handler in a prior period, established by the Committee and
approved by USDA.
Section 905.153 of the regulations specifies procedures for
limiting the volume of small red seedless grapefruit entering the fresh
market. With this change, this section defines the prior period
required by Sec. 905.52 as an average week within the immediately
preceding three seasons. An average week is calculated for each
handler. This section specifies that the Committee may recommend only a
certain percentage of sizes 48 and 56 red seedless grapefruit be made
available for fresh shipment for any week or weeks during the
regulatory period. Under such a limitation, the quantity of sizes 48
and 56 red seedless grapefruit that a handler may ship is calculated by
taking the recommended percentage times the handler's average week.
Section 905.153 also details overshipment provisions specifying that
any handler may ship an amount of sizes 48 and 56 red seedless
grapefruit up to 10 percent greater than their allotted volume each
week. The quantity of such overshipment is deducted from the handler's
allotment for the following week. Overshipments are not permitted
during the final regulatory week.
This rule amends Sec. 905.153 by revising the definition of prior
period and the language governing overshipments. This rule continues in
effect changes in the number of preceding seasons used to calculate a
handler's average week from five preceding seasons to three preceding
seasons. This rule also continues in effect changes in the provisions
regarding overshipments redefining when overshipments are permitted.
Section 905.52 specifies that whenever any size limitation
restricts the shipment of a portion of a specified size, the quantity
each handler may ship during a particular week shall be based on a
prior period recommended by the Committee and approved by USDA. When
the Committee initially recommended the procedures in Sec. 905.153 to
limit the volume of small red seedless grapefruit entering the fresh
market during the regulated period (61 FR 69011, December 31, 1996),
they determined an average week within the preceding five seasons would
be the prior period used to calculate a handler's base quantity for
each week of regulation.
Prior to this change, an average week was calculated by adding the
total red seedless grapefruit shipments by a handler during the 33-week
period beginning the third Monday in September for the preceding five
seasons. This total was divided by five to establish an average season.
The average season was then divided by the 33 weeks in a season to
derive the average week. When the Committee utilizes these provisions
and establishes percentages for the regulatory period, a handler's
average week is multiplied by the applicable percentage to establish
that handler's base quantity for shipping small red seedless grapefruit
during that particular week.
The Committee initially chose to use the past five seasons to
calculate an average season, because it thought that the five-year
period helped adjust for variations in growing conditions between the
seasons. At the time, the Committee believed using five seasons
provided the most accurate picture of an average season and by using
the average season to calculate an average week, provided each handler
with an equitable base from which to establish shipments.
However, since these procedures were established, there have been
many changes in the industry. Some handlers have increased their volume
of red seedless grapefruit shipments, while others have decreased their
shipments or stopped shipping grapefruit altogether.
Because of the continuing changes in the industry, the Committee
believes that using the past five seasons no longer provides the most
accurate picture of an average season. At its June 15, 2004, meeting,
the Committee discussed the prior period, and unanimously recommended
changing from a five-season average to a three-season average when
calculating a handler's average week. The Committee believes that this
adjustment in the prior period better reflects changes in the industry,
and better allocates the base quantities for all handlers of red
seedless grapefruit.
The Committee further believes that the use of a three-season
average is more responsive in reallocating base than a five-season
average. Under a five-season average, it can be several seasons before
changes in shipping volume are reflected in the allotment a handler
receives. With a five-season average, handlers that have decided to
limit their grapefruit business receive more allotment than they need
for several seasons even though this allotment could be better utilized
by handlers that are increasing their market for red seedless
grapefruit. The Committee believes that this change better allocates
allotment by increasing the base for handlers that have increased their
red grapefruit shipments and by reducing the base for handlers that
have reduced their red grapefruit shipments.
Consequently, the Committee also believes that this change reduces
the need for loans and transfers by shifting additional base to those
with increasing shipments. Handlers who are increasing their volume of
red seedless grapefruit shipments often need additional allotment to
meet their market demands and rely on the provisions in Sec. 905.153
that provide for allotment loans and transfers. Under these provisions,
a handler may borrow allotment from another handler or allotments can
be transferred from one handler to another. These procedures provide a
means for handlers who have increased their volume of red seedless
grapefruit shipments to meet the demands of the market and their
buyers.
However, handlers do not know how much allotment other handlers
have or if the allotment will be used. The Committee believes that this
change from a five to a three-year average in computing base quantities
better reflects the needs of the industry and lessens the need for
loans and transfers. This benefits handlers and the Committee staff who
process loans and transfers. Therefore, the Committee recommended
changing the prior period used to calculate an average week from five
seasons to three seasons.
The Committee also discussed revising the provisions in Sec.
905.153(d) relating to overshipments and the loan or transfer of
allotment during week 22. As stated previously, any handler may ship an
amount of sizes 48 and 56 red seedless grapefruit up to 10 percent
greater than their allotment during any regulated week. The quantity of
such overshipment is deducted from the handler's allotment for the
following week. Prior to this change, the rules and
[[Page 70876]]
regulations specified that overshipments were not allowed during week
22, because week 22 is the last week of the regulation period and does
not provide an opportunity for repayment of any overshipments.
The Committee is continuously meeting during the regulated period
to discuss the market for red seedless grapefruit and possible changes
to the weekly percentages. It believes that market conditions could
cause it to recommend the removal of regulation prior to the end of
week 22. To recognize this possibility, the Committee recommended
changing these provisions to specify that overshipments are not
permitted during the last week of regulation rather than week 22.
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 grapefruit, imports of that
commodity must meet the same or comparable requirements. This rule does
not change the minimum grade and size requirements under the order.
Therefore, no change is necessary in the grapefruit import regulations
as a result of this action.
Final 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 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.
There are approximately 75 handlers of Florida grapefruit who are
subject to regulation under the marketing order and approximately
11,000 growers of citrus in the regulated area. Small agricultural
service firms, including handlers, are 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 $750,000 (13 CFR 121.201).
Based on industry and Committee data, the average annual f.o.b.
price for fresh Florida red seedless grapefruit during the 2003-04
season was approximately $7.58 per \4/5\-bushel carton, and total fresh
shipments for the 2003-04 season are estimated at 24.7 million cartons
of red grapefruit. Approximately 25 percent of all handlers handled 75
percent of Florida's grapefruit shipments. Using the average f.o.b.
price, at least 80 percent of the grapefruit handlers could be
considered small businesses under the SBA definition. Therefore, the
majority of Florida grapefruit handlers may be classified as small
entities. The majority of Florida grapefruit producers may also be
classified as small entities.
This rule continues in effect revisions to the procedures used to
limit the volume of sizes 48 and 56 red seedless grapefruit entering
the fresh market under the order. This rule changes the way a handler's
average week is calculated for purposes of this limitation by adjusting
the prior period used from the five preceding seasons to the three
preceding seasons. This action also amends the language governing
overshipments for the last week of regulation. This rule revises the
provisions of Sec. 905.153. Authority for this action is provided in
Sec. 905.52 of the order. The Committee unanimously recommended this
action at a meeting on June 15, 2004.
This rule revises procedures in Sec. 905.153 used in implementing
percentage size regulations for small red seedless grapefruit under the
order. These procedures will be applied uniformly for all handlers
regardless of size. This action is not expected to decrease the overall
consumption of red seedless grapefruit.
While during the period of regulation this change may result in
some handlers receiving a smaller allotment of small-sized red
grapefruit, it provides additional allotment to those handlers that
have increased shipments. This rule changes how each handler's share of
the weekly allotment is calculated, but has a limited affect on the
total allotment made available by the weekly percentages. This change
in itself does not reduce the total weekly industry base available. It
only reallocates the distribution of the base. Statistics for 2003-04
show that the total available industry allotment was used in only 3
weeks of the 22 week regulated period. This change should result in a
better utilization of the overall industry base allotments. Because the
base allotments will be readily available to those handlers needing it,
handlers will be better able to meet buyer needs and additional
shipments might result.
In addition, if handlers require additional allotment, they can
still transfer, borrow, or loan allotment based on their needs in a
given week. Approximately 315 loans and transfers were utilized last
season. This rule will help reduce the need for loans and transfers by
better allocating the available base. This will help reduce the amount
of time and effort needed to reallocate allotment through loans and
transfers. This may result in a cost savings by reducing administrative
costs for the Committee.
This rule provides handlers with allotment more reflective of their
current operations. In addition, this rule changes the provisions on
overshipments to provide for the possibility that the Committee might
choose to end regulation prior to week 22. This rule makes the
regulation more responsive to industry needs and better allocates base
quantities.
The Committee discussed maintaining the number of seasons used to
calculate the prior period at five. However, the Committee believes
that a three-season period will result in a better utilization of the
overall industry base allotment. Therefore, this alternative was
rejected.
This rule will not impose any additional reporting or recordkeeping
requirements on either small or large grapefruit 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, as noted in the initial regulatory flexibility
analysis, USDA 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 on all issues.
Like all Committee meetings, the June 15, 2004, meeting was a public
meeting and all entities, both large and small, were able to express
views on this issue.
An interim final rule concerning this action was published in the
Federal Register on August 16, 2004. Copies of the rule were mailed or
sent via facsimile to all Committee members and grapefruit growers and
handlers. In addition, the rule was made available through the internet
by USDA and the Office of the Federal Register. That rule provided for
a 30-day comment period,
[[Page 70877]]
which ended September 15, 2004. No comments were received.
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.
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, (69 FR 50275, August 16, 2004) will tend to
effectuate the declared policy of the Act.
List of Subjects in 7 CFR Part 905
Grapefruit, Marketing agreements, Oranges, Reporting and
recordkeeping requirements, Tangelos, Tangerines.
PART 905--ORANGES, GRAPEFRUIT, TANGERINES, AND TANGELOS GROWN IN
FLORIDA
0
Accordingly, the interim final rule amending 7 CFR part 905 which was
published at 69 FR 50275 on August 16, 2004, is adopted as a final rule
without change.
Dated: December 2, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-26861 Filed 12-7-04; 8:45 am]
BILLING CODE 3410-02-P