[Federal Register Volume 74, Number 65 (Tuesday, April 7, 2009)]
[Rules and Regulations]
[Pages 15641-15644]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-7822]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 905 and 944

[Doc. No. AMS-FV-09-0002; FV09-905-1 IFR]


Oranges, Grapefruit, Tangerines and Tangelos Grown in Florida and 
Imported Grapefruit; Relaxation of Size Requirements for Grapefruit

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule relaxes the minimum size requirement for white 
seedless grapefruit grown in Florida and for white seedless grapefruit 
imported into the United States for the fresh market. The Citrus 
Administrative Committee (Committee) which locally administers the 
marketing order for oranges, grapefruit, tangerines, and tangelos grown 
in Florida (order) recommended this change for Florida grapefruit. The 
corresponding change in the import regulation is required under section 
8e of the Agricultural Marketing Agreement Act of 1937. This rule 
relaxes the minimum size requirement for domestic shipments, making it 
the same as required for export shipments. This change is expected to 
maximize fresh white seedless grapefruit shipments and provide greater 
flexibility to handlers.

DATES: Effective April 8, 2009; comments received by June 8, 2009 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; 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 rule 
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 the 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 Manager, Southeast Marketing Field 
Office, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 325-8793, or 
e-mail: <a href="/cdn-cgi/l/email-protection#aaeec5d8c3d984e0cbc7c3cfd9c5c4eacbc7d984dfd9cecb84cdc5dc"><span class="__cf_email__" data-cfemail="71351e0318025f3b101c1814021e1f31101c025f040215105f161e07">[email protected]</span></a> or <a href="/cdn-cgi/l/email-protection#07446f756e74736e666929496e7474626947666a74297274636629606871"><span class="__cf_email__" data-cfemail="a7e4cfd5ced4d3cec6c989e9ced4d4c2c9e7c6cad489d2d4c3c689c0c8d1">[email protected]</span></a>.
    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: <a href="/cdn-cgi/l/email-protection#6c260d15422b19091e0e091e2c0d011f42191f080d420b031a"><span class="__cf_email__" data-cfemail="e5af849ccba2908097878097a5848896cb90968184cb828a93">[email protected]</span></a>.

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.''
    This rule is also issued under section 8e of the Act, which 
provides that whenever certain 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 (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.
    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.
    This rule relaxes the minimum size requirement for white seedless 
grapefruit grown in Florida and for white seedless grapefruit imported 
into the United States for the fresh market. This rule relaxes the 
minimum size requirement for shipments to the 48 contiguous States and 
the District of Columbia so the minimum size requirement is the same 
for both the domestic and export markets. This change is expected to 
maximize fresh white seedless grapefruit shipments and provide greater 
flexibility to handlers. The Committee met on December 16,

[[Page 15642]]

2008, and unanimously recommended this change.
    Section 905.52 of the order provides authority to establish grade 
and size requirements for Florida citrus. Section 905.306 of the order 
specifies, in part, the minimum size requirements for Florida citrus. 
Such requirements for domestic shipments are specified in Sec.  905.306 
in Table I of paragraph (a). Minimum grade and size requirements for 
white seedless grapefruit imported into the United States are currently 
in effect under Sec.  944.106.
    The current minimum size requirement for domestic shipments of 
white seedless grapefruit is 3\9/16\ inches. This rule relaxes the 
minimum size requirement from 3\9/16\ inches (size 48) to 3\5/16\ 
inches (size 56).
    Currently, white seedless grapefruit shipped to the domestic market 
must meet a more restrictive minimum size requirement than fruit 
shipped to the export market. The more restrictive size requirement for 
domestic shipments was established in response to market preference for 
larger sized fruit and to help maintain better grower prices for the 
larger sizes. The industry believed that absent the larger minimum size 
requirement the domestic market would be oversupplied with small sized, 
lower-priced fruit, which would reduce the price for the larger sizes. 
Conversely, the export market favored the smaller sized fruit. 
Therefore, establishing the different minimum size requirements 
satisfied both markets.
    However, over the last decade, the total supply of white seedless 
grapefruit has declined. Total production of white seedless grapefruit 
grown in Florida during the 1999-2000 season was approximately 
20,510,000 1\3/5\ bushel boxes compared to 8,539,000 boxes produced 
during the 2007-08 season. This represents a 58 percent decrease in 
Florida white seedless grapefruit production from 1999 to 2008.
    Shipments of fresh white seedless grapefruit have also been 
declining. Since the 1999-2000 season, fresh shipments have declined by 
more than 70 percent. During the 2007-08 season, domestic shipments of 
white seedless grapefruit accounted for only one percent of total fresh 
grapefruit shipments. The export markets have traditionally been good 
markets for size 56 white seedless grapefruit. However, fresh shipments 
of white seedless grapefruit to export markets have also declined.
    With the changes in supply and demand, the Committee believes the 
larger minimum size requirement for domestic shipments is no longer 
needed. Further, Committee members agreed that with the demand for 
white seedless grapefruit declining, handlers need to be able to ship 
fruit to whichever markets become available. However, the different 
minimum size requirements for domestic and export markets have 
presented problems for handlers trying to take advantage of available 
markets. Fruit packed for the export market cannot be shipped to the 
domestic market without first being repacked to ensure it meets the 
more restrictive size requirements. Repacking the fruit is a cost 
burden on handlers and reduces returns to growers.
    Consequently, the Committee recommended that the minimum size 
requirement for domestic shipments of white seedless grapefruit be 
relaxed from size 48 to size 56. This change makes the minimum size 
requirement the same for both the domestic and export markets. Having 
the same minimum size requirement for both domestic and export 
shipments will make it easier to move fruit to available markets 
without having to repack fruit to meet the differing size requirements. 
This reduces costs and provides greater flexibility for handlers. In 
addition, this change makes more fruit available for shipment to the 
domestic market helping to maximize fresh shipments, which may increase 
grower returns.
    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 met the same or 
comparable grade, size, quality, and maturity requirements. Since this 
rule changes the minimum size requirement under the domestic handling 
regulations, a corresponding change to the import regulations must also 
be made.
    Minimum grade and size requirements for grapefruit imported into 
the United States are currently in effect under Sec.  944.106. This 
change relaxes the minimum size requirement for imported white seedless 
grapefruit from 3\9/16\ inches (size 48) to 3\5/16\ inches (size 56). 
The relaxation in the minimum size requirement also has a beneficial 
impact for importers of white seedless grapefruit. This change allows 
size 56 white seedless grapefruit to be shipped to the United States 
increasing the amount of fruit available for shipment to the fresh 
market, thus benefiting importers.

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 the 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 40 Florida grapefruit handlers subject to 
regulation under the marketing order and about 8,000 citrus producers 
in the production area. There are approximately 10 grapefruit 
importers. Small agricultural service firms, which include grapefruit 
handlers and importers, are defined by the Small Business 
Administration (SBA) as those having annual receipts of less than 
$7,000,000, and small agricultural producers are defined as those whose 
annual receipts are less than $750,000 (13 CFR 121.201).
    According to industry and Committee data, the average annual f.o.b. 
price for fresh Florida white seedless grapefruit during the 2007-08 
season was $10.30 per \4/5\-bushel carton, and total fresh shipments 
were around 3.3 million cartons. Based on the average f.o.b. price, a 
majority of Florida white seedless grapefruit handlers could be 
considered small businesses under SBA's definition. In addition, based 
on production and grower prices reported by the National Agricultural 
Statistics Service and the total number of Florida citrus producers, 
the average annual producer revenue is less than $750,000. Information 
from the Foreign Agricultural Service, USDA, indicates that the dollar 
value of imported fresh grapefruit ranged from approximately $2.14 
million in 2006 to $2.06 million in 2008. Using these values, all 
importers would have annual receipts of less than $7 million for 
grapefruit. Therefore, the majority of handlers, producers and 
importers of white seedless grapefruit may be classified as small 
entities.
    The Bahamas, Mexico, and Israel are the major grapefruit producing 
countries exporting grapefruit to the United States. In 2008, shipments 
of grapefruit imported into the United States totaled 14,257 metric 
tons. The Bahamas accounted for 10,362 metric tons, 2,741 metric tons 
were imported from Mexico, and 104 metric tons arrived from Israel.
    This rule relaxes the minimum size requirement for white seedless 
grapefruit grown in Florida and for white seedless grapefruit imported 
into

[[Page 15643]]

the United States for the fresh market. This rule relaxes the minimum 
size requirement for domestic shipments to the 48 contiguous States and 
the District of Columbia from 3\9/16\ inches (size 48) to 3\5/16\ 
inches (size 56) making the minimum size requirement the same for both 
the domestic and export markets. This rule also relaxes the minimum 
size requirement for imports of fresh white seedless grapefruit from 
3\9/16\ inches (size 48) to 3\5/16\ inches (size 56). This change is 
expected to maximize fresh white seedless grapefruit shipments and 
provide greater flexibility to handlers. Authority for this action is 
provided in Sec.  905.52. This rule amends the provisions of Sec. Sec.  
905.306 and 944.106. The Committee unanimously recommended this change 
at its December 16, 2008, meeting. The change in the import regulation 
is required under section 8e of the Act.
    This action is not expected to increase costs associated with the 
order requirements or the grapefruit import regulation. Rather, this 
action represents a cost savings for handlers and has the potential to 
increase industry returns. This change makes the minimum size 
requirement the same for both the domestic and export markets. Having 
the same minimum size requirement for both domestic and export 
shipments will make it easier to move fruit to available markets 
without having to repack fruit to meet the differing size requirements. 
This reduces costs and provides greater flexibility for handlers. The 
Committee believes this change will help improve the marketing of white 
seedless grapefruit and maximize shipments to fresh market channels.
    The on-tree price for processed white seedless grapefruit for the 
2007-08 season was $0.33 per box compared to $10.05 per box for fruit 
sold to the fresh market. With limited returns for processed 
grapefruit, reducing the minimum size requirement for the domestic 
market could shift an additional volume of small sizes to the fresh 
market. This will help maximize fresh shipments and should increase 
industry returns. Importers will also benefit from this change, as a 
greater volume of fruit will be available for shipment to the United 
States. The opportunities and benefits of this rule are expected to be 
equally available to all grapefruit handlers, growers, and importers, 
regardless of their size.
    The only alternative to this action discussed by the Committee was 
to maintain the current minimum size requirement for domestic 
shipments. However, the Committee agreed that relaxing the minimum size 
would make additional white seedless grapefruit available for the fresh 
market, would provide more flexibility to handlers, and could result in 
better returns. Therefore, the 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, USDA has not identified any 
relevant Federal rules that duplicate, overlap or conflict with this 
rule.
    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.
    Further, the Committee's meeting was widely publicized throughout 
the Florida citrus industry and all interested persons were invited to 
attend the meeting and participate in Committee deliberations. Like all 
Committee meetings, the December 16, 2008, 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 
comments on this interim final 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: http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBusinessGuide. 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 a change to the minimum size 
requirements currently prescribed under the Florida citrus marketing 
order and the import requirements for grapefruit. 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 
this interim final rule, as hereinafter set forth, will tend to 
effectuate the declared policy of the Act.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this interim final 
rule.
    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 shipping season for white seedless grapefruit has 
already started; (2) this rule represents a relaxation of the minimum 
size requirements; (3) the Committee unanimously recommended this 
change at a public meeting and interested parties had an opportunity to 
provide input; 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

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.


0
For the reasons set forth in the preamble, 7 CFR parts 905 and 944 are 
amended as follows:
0
1. The authority citation for 7 CFR parts 905 and 944 continues to read 
as follows:

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

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

0
2. In Sec.  905.306, Table I in paragraph (a) is amended by revising 
the entry for ``Seedless, except red'' under ``Grapefruit,'' to read as 
follows:


Sec.  905.306  Orange, Grapefruit, Tangerine and Tangelo Regulation.

    (a) * * *

[[Page 15644]]



                                                     Table I
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                                                                                                      Minimum
                 Variety                       Regulation period             Minimum grade           diameter
                                                                                                     (inches)
(1)                                       (2).......................  (3).......................             (4)
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
Grapefruit..............................
 
                                                  * * * * * * *
Seedless, except red....................  On and after 9/01/94......  U.S. No. 1................         3\5/16\
 
                                                  * * * * * * *
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* * * * *

PART 944--FRUITS; IMPORT REGULATIONS

0
3. In Sec.  944.106, the table in paragraph (a) is amended by revising 
the entry for ``Seedless, except red'' to read as follows:


Sec.  944.106  Grapefruit import regulation.

    (a) * * *

 
----------------------------------------------------------------------------------------------------------------
                                                                                                      Minimum
        Grapefruit classification              Regulation period             Minimum grade           diameter
                                                                                                     (inches)
(1)                                       (2).......................  (3).......................             (4)
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
Seedless, except red....................  On and after 9/01/94......  U.S. No. 1................         3\5/16\
----------------------------------------------------------------------------------------------------------------

* * * * *

    Dated: April 1, 2009.
Robert C. Keeney,
Acting Associate Administrator, Agricultural Marketing Service.
 [FR Doc. E9-7822 Filed 4-6-09; 8:45 am]
BILLING CODE 3410-02-P


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