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[Federal Register Volume 78, Number 100 (Thursday, May 23, 2013)]
[Proposed Rules]
[Pages 30782-30784]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-12239]

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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 78, No. 100 / Thursday, May 23, 2013 / 
Proposed Rules

[[Page 30782]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 915

[Doc. No. AMS-FV-12-0067; FV13-915-1 PR]

Avocados Grown in South Florida; Change in Minimum Grade 
Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule invites comments on an increase to the 
minimum grade requirements currently prescribed under the Florida 
avocado marketing order (order). The order regulates the handling of 
avocados grown in South Florida, and is administered locally by the 
Avocado Administrative Committee (Committee). This action would 
increase the current minimum grade requirement from a U.S. No. 2 to a 
U.S. Combination grade for avocados shipped to destinations outside the 
production area. Increasing the minimum grade requirement would align 
marketing order regulations with current industry practices to the 
benefit of growers, handlers, and consumers.

DATES: Comments must be received by June 24, 2013.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments must be sent to the Docket Clerk, 
Marketing Order and Agreement Division, Fruit and Vegetable Program, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938; or Internet: http://www.regulations.gov. All comments should reference the document 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.regulations.gov. All comments submitted in response to this 
proposal will be included in the record and will be made available to 
the public. Please be advised that the identity of the individuals or 
entities submitting comments will be made public on the Internet at the 
address provided above.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Marketing Specialist 
or Christian D. Nissen, Regional Director, Southeast Marketing Field 
Office, Marketing Order and Agreement Division, Fruit and Vegetable 
Program, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 325-7893, or 
Email: Doris.Jamieson@ams.usda.gov or Christian.Nissen@ams.usda.gov.
    Small businesses may request information on complying with this 
regulation by contacting Jeffrey Smutny, Marketing Order and Agreement 
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: Jeffrey.Smutny@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This proposal is issued under Marketing 
Order No. 915, as amended (7 CFR part 915), regulating the handling of 
avocados grown in South 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.''
    The Department of Agriculture (USDA) is issuing this proposed rule 
in conformance with Executive Order 12866.
    This proposal has been reviewed under Executive Order 12988, Civil 
Justice Reform. This proposed rule is not intended to have retroactive 
effect.
    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 proposal invites comments on revisions to the minimum grade 
requirements currently prescribed under the order. This proposal would 
increase the current minimum grade requirement from a U.S. No. 2 to a 
U.S. Combination grade for avocados shipped to destinations outside the 
production area and was recommended by the Committee at a meeting on 
October 10, 2012.
    Section 915.51 of the order provides, in part, authority to issue 
regulations establishing specific grade requirements for avocados. 
Section 915.52 of the order provides authority for the modification, 
suspension or termination of established regulations.
    Section 915.306 of the order's container and pack regulations 
prescribe grade, pack, and container marking requirements for Florida 
avocados. Paragraph (a)(1) of that section prescribes, in part, that no 
handler shall handle any variety of avocados grown in the production 
area unless such avocados grade at least U.S. No. 2.
    While marketing order regulations specify a minimum grade 
requirement of a U.S. No. 2, it is standard industry practice to ship 
avocados to destinations outside the production area at the higher 
grade of a U.S. Combination, especially at the beginning of the season. 
The minimum requirement for a U.S. Combination grade provides that at 
least 60 percent of the fruit in the pack must meet the U.S. No. 1 
grade and the remaining fruit must meet at least a U.S. No. 2 grade. 
Handlers have voluntarily shipped the higher grade fruit in order to 
get the best price for growers and to provide quality fruit to 
consumers.
    During the first four months of the 2012-13 season, shipments of 
U.S. No. 2 grade fruit were 13 percent higher than shipments during the 
comparable period of the previous season. Buyers were reluctant to pay 
a higher price for the better grade fruit when they could purchase the 
lower grade fruit for less. This negatively affected the price of the 
U.S. Combination grade fruit and resulted in the loss of sales of the 
higher grade fruit.
    During several meetings, Committee members expressed concern that

[[Page 30783]]

shipments of the U.S. No. 2 grade fruit may continue to increase and 
further impact price. Further, the Florida avocado industry has 
established a reputation for providing consumers with high quality 
fruit and the Committee believes shipping U.S. No. 2 grade fruit 
outside the production area could lower that standard.
    As the majority of handlers are currently shipping at the higher 
grade, it is not anticipated that this change would reduce overall 
shipments. Even though there was an increase in shipments of U.S. No. 2 
grade fruit to destinations outside the production area during the 
2012-13 season, Committee data indicates total shipments of U.S. No. 2 
grade fruit represented only about one percent of total shipments this 
season, which were over 1.1 million 55-pound bushel containers.
    Consequently, the Committee recommended increasing the minimum 
grade requirement to a U.S. Combination for avocados shipped to 
destinations outside the production area. Fruit shipped within the 
production area would continue to be required to meet the current 
minimum grade of a U.S. No. 2, which would provide an outlet for U.S. 
No. 2 grade not utilized in the U.S. Combination pack. This proposal 
would align marketing order regulations with current industry practices 
to the benefit of growers, handlers, and consumers. This proposal would 
help maintain the industry's reputation for providing consumers with 
high quality avocados from Florida, while continuing to provide 
handlers with an outlet for their U.S. No. 2 fruit.
    One member of the Committee voted against the recommendation. He 
stated the minimum grade requirement should be increased, but only 
during the beginning of the season when domestic production was 
minimal. He believed that when imports begin arriving in October, the 
minimum grade should revert back to a U.S. No. 2 in order for the 
Florida avocado industry to compete with imported fruit. However, the 
majority of the Committee agreed the quality of the fruit was the most 
important issue and shipping the lower grade fruit lowered that high 
standard established by the Florida avocado industry. Other members of 
the Committee also commented that they believe increasing the minimum 
grade for Florida avocados would cause imported fruit quality to 
improve in order to match the higher quality standard set by the 
Florida avocado industry.
    Section 8e of the Act provides that when certain domestically 
produced commodities, including avocados, are regulated under a Federal 
marketing order, imports of that commodity must meet the same or 
comparable grade, size, quality, and maturity requirements. The changes 
proposed in this rule would apply only to shipments outside the 
production area. The current, less restrictive regulations would 
continue to apply to shipments within the production area and to 
imported avocadoes. A clarification will be made to the import 
regulation in a separate action.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), 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 rules issued thereunder, are unique in that 
they are brought about through group action of essentially small 
entities acting on their own behalf.
    There are approximately 30 handlers of Florida avocados subject to 
regulation under the order and approximately 300 producers of avocados 
in the production area. Small agricultural service firms, which include 
avocado handlers, are defined by the Small Business Administration 
(SBA) as those whose annual receipts are less than $7,000,000, and 
small agricultural producers are defined as those having annual 
receipts less than $750,000 (13 CFR 121.201).
    According to Committee data and information from the National 
Agricultural Statistical Service, the average price for Florida 
avocados during the 2011-12 season was approximately $20.79 per 55-
pound bushel container and total shipments were slightly higher than 
1.2 million 55-pound bushels. Using the average price and shipment 
information provided by the Committee, the majority of avocado handlers 
could be considered small businesses under SBA's definition. In 
addition, based on avocado production, producer prices, and the total 
number of Florida avocado producers, the average annual producer 
revenue is less than $750,000. Consequently, the majority of avocado 
handlers and producers may be classified as small entities.
    This proposal would increase the minimum grade requirements 
currently prescribed for Florida avocados under Sec.  915.306 of the 
order. This proposed change would increase the minimum grade from a 
U.S. No. 2 to a U.S. Combination grade for avocados shipped to 
destinations outside the production area and would align marketing 
order regulations to current industry practices. This proposal was 
recommended by the Committee at a meeting on October 10, 2012. 
Authority for this action is provided in Sec. Sec.  915.51 and 915.52 
of the order.
    Any additional costs that would be associated with this change are 
anticipated to be minimal. The order does require that all containers 
be marked with the grade of fruit in the container. However, the vast 
majority of handlers are currently shipping at the higher grade 
requirement, and marking their containers accordingly. Further, any 
containers pre-stamped with a U.S. No. 2 that a handler may already 
have could be used in the production area.
    As previously stated, the volume of U.S. No. 2 grade Florida 
avocados shipped during a season represents less than one percent of 
total annual shipments. In addition, the U.S. Combination grade 
requires that at least 60 percent of the fruit in the pack be a U.S. 
No. 1 grade and the remaining fruit must meet a U.S. No. 2 grade. 
Consequently, U.S. No. 2 fruit can be utilized in the U.S. Combination 
pack. Further, if this rule is implemented, U.S. No. 2 grade avocados 
could still be shipped to destinations within the production area. 
Therefore, implementation of this proposed rule is not expected to 
impact the overall volume of U.S. No. 2 fruit being utilized as 
adequate uses for such fruit would continue to exist.
    Increasing the minimum grade requirement would align marketing 
order requirements with current industry practices. Consumers would 
benefit as a result of the higher quality pack available in the 
marketplace. It would also build consumer confidence and improve grower 
returns. The benefits of this proposed rule are not expected to be 
disproportionately greater or less for small handlers or growers than 
for large entities.
    The Committee considered alternatives to this recommended change. 
The Committee discussed increasing the minimum grade to U.S. 
Combination grade during the early part of the season and then 
reverting back to the minimum grade requirement of a U.S. No. 2 in 
October when imported fruit typically begins arriving in the U.S. There 
was concern that having the higher grade requirements in effect when 
imports begin arriving would

[[Page 30784]]

make it difficult for the domestic industry to compete. However, the 
Committee agreed the quality of the fruit was the most important issue 
and shipping the lower grade fruit lowered that high standard 
established by the Florida avocado industry. Also, Committee members 
stated that they believe increasing the minimum grade for Florida 
avocados shipped outside the production area for the entire season 
would result in improved quality of both domestic and imported 
avocados, as imports would likely strive to match the quality standards 
set by the Florida avocado industry. Therefore, this alternative was 
rejected.
    The Committee also considered changing the minimum grade 
requirements for all Florida avocados handled, regardless of market 
destination. However, maintaining the current minimum grade requirement 
for avocados shipped to destinations within the production area 
provides an outlet for U.S. No. 2 grade fruit not utilized in the 
higher grade packs. Therefore, the Committee also rejected this 
alternative.
    In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. 
Chapter 35), the order's information collection requirements have been 
previously approved by the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0189, Generic Fruit Crops. No changes in those 
requirements as a result of this action are necessary. Should any 
changes become necessary, they would be submitted to OMB for approval.
    This proposed rule would increase the minimum grade requirement 
under the Florida avocado marketing order. Accordingly, this action 
would not impose any additional reporting or recordkeeping requirements 
on either small or large Florida avocado 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.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this proposed rule.
    In addition, the Committee's meeting was widely publicized 
throughout the Florida avocado industry and all interested persons were 
invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the October 
10, 2012, meeting was a public meeting and all entities, both large and 
small, were able to express views on this issue. Finally, interested 
persons are invited to submit comments on this proposed rule, including 
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: 
www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about 
the compliance guide should be sent to Jeffrey Smutny at the previously 
mentioned address in the FOR FURTHER INFORMATION CONTACT section.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposal. Thirty days is deemed appropriate so this 
change would be in place by May when handlers begin shipping. This 
would also give handlers advanced notice of the increased grade 
requirement before the season begins. All written comments timely 
received will be considered before a final determination is made on 
this matter.

List of Subjects in 7 CFR Part 915

    Avocados, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, 7 CFR part 915 is 
proposed to be amended as follows:

PART 915--AVOCADOS GROWN IN SOUTH FLORIDA

0
1. The authority citation for 7 CFR part 915 continues to read as 
follows:

    Authority:  7 U.S.C. 601-674.

0
2. In Sec.  915.306, paragraph (a)(1) is revised to read as follows:

Sec.  915.306  Florida avocado grade, pack and container marking 
regulation.

    (a) * * *
    (1) Such avocados grade at least U.S. Combination, except that 
avocadoes handled to destinations within the production area grade U.S. 
No. 2 and except further that such avocados may be placed in containers 
with avocados of dissimilar varietal characteristics.
* * * * *

    Dated: May 17, 2013.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2013-12239 Filed 5-22-13; 8:45 am]
BILLING CODE 3410-02-P
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