13394 Federal Register / Vol. 66, No. 44 / Tuesday, March 6, 2001 / Rules and Regulations

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. FV00–966–1 FIR]

Tomatoes Grown in Florida; Change in

Size Designation

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Final rule.

SUMMARY: The Department of

Agriculture (Department) is adopting, as

a final rule, without change, the

provisions of an interim final rule that

increased the maximum diameter of the

6x6 numeric size designation prescribed

under the Florida tomato marketing

order (order). The order regulates the

handling of tomatoes grown in Florida

and is administered locally by the

Florida Tomato Committee (Committee).

This rule continues in effect a maximum

diameter increase of 2⁄32 of an inch, from

227⁄32 inches to 229⁄32 inches for

tomatoes designated 6x6. This change

allows handlers to pack slightly larger

tomatoes in a 6x6 container, and

provides them with greater flexibility

when packing tomatoes. The increased

flexibility is expected to increase the

number and availability of containers of

6x6 tomatoes, which are often in short

supply.

EFFECTIVE DATE: April 5, 2001.

FOR FURTHER INFORMATION CONTACT:

Doris Jamieson, Southeast Marketing

Field Office, Marketing Order

Administration Branch, Fruit and

Vegetable Programs, AMS, USDA, P.O.

Box 2276, Winter Haven, Florida 33883;

telephone: (863) 299–4770, Fax: (863)

299–5169; or George Kelhart, Technical

Advisor, Marketing Order

Administration Branch, Fruit and

Vegetable Programs, AMS, USDA, room

2525–S, P.O. Box 96456, Washington,

DC 20090–6456; telephone: (202) 720–

2491, Fax: (202) 720–5698.

Small businesses may request

information on complying with this

regulation by contacting Jay Guerber,

Marketing Order Administration

Branch, Fruit and Vegetable Programs,

AMS, USDA, P.O. Box 96456, room

2525–S, Washington, DC 20090–6456;

telephone: (202) 720–2491, Fax: (202)

720–5698, or E-mail:

Jay.Guerber@usda.gov.

SUPPLEMENTARY INFORMATION: This rule

is issued under Marketing Agreement

No. 125 and Marketing Order No. 966,

both as amended (7 CFR part 966),

regulating the handling of tomatoes

grown in certain designated counties 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.’’

The 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.

Under the order, tomatoes produced

in the production area and shipped to

fresh market channels outside the

regulated area are required to meet

grade, size, inspection, and container

requirements. These requirements apply

during the period October 10 through

June 15 each year. Current requirements

include a minimum grade of U.S. No. 2

and a minimum size of 29⁄32 inches in

diameter. Current pack and container

requirements outline the types of

information that need to appear on a

container, weight restrictions, and other

requirements containers must meet.

Section 966.52 of the order provides

authority for the modification,

suspension, and termination of

regulations. It includes the authority to

establish and modify size and pack

requirements for tomatoes grown in the

defined production area and handled

under the order.

Section 966.323 of the order’s rules

and regulations specifies the handling

regulations for Florida tomatoes. Section

966.323(a)(2)(i) currently specifies that

all tomatoes packed by a registered

handler must meet a minimum size

requirement of 29⁄32 inches in diameter.

That section also requires that all such

tomatoes must be sized with proper

equipment in one of three numeric size

designations with specified ranges of

diameter. Tomatoes designated as

‘‘6x67’’ must be a minimum of 29⁄32

inches in diameter and a maximum of

219⁄32. These are the smallest tomatoes

marketed. Tomatoes, other than

producer field-packed tomatoes,

designated as ‘‘6x66’’ must be a

minimum of 217⁄32 inches in diameter

and, prior to the issuance of the interim

final rule, a maximum of 227⁄32 inches

in diameter. The interim final rule

changed that maximum to 229⁄32.

Tomatoes designated as ‘‘5x6’’ must be

a minimum of 225⁄32 inches in diameter

with no maximum size requirement.

These are the largest size marketed. To

allow for variation incident to proper

sizing, not more than a total of 10

percent, by count, of the tomatoes in the

lot may be smaller than the specified

minimum diameter or larger than the

maximum diameter.

This rule continues in effect the

increase in the maximum diameter

prescribed for size 6x66 tomatoes by 2⁄32

of an inch, from 227⁄32 inches to 229⁄32

inches. This will allow handlers the

option of packing slightly larger

tomatoes in a 6x66 container. This

increased flexibility in packing tomatoes

is expected to allow handlers to pack

some of the smaller 5x6 tomatoes into

6x66 containers. This is expected to

increase the number and availability of

containers of 6x66 tomatoes, which are

often in short supply, and improve the

uniformity of the 5x6-sized tomatoes.

The Committee unanimously

recommended this change at a meeting

held on September 8, 2000.

Based on an analysis of markets and

demands of buyers, the Committee

believes that the increase in the

maximum diameter for size 6x66

tomatoes will improve the marketing of

Florida tomatoes, provide handlers with

additional flexibility in packing

tomatoes, and help improve grower

returns. Recent industry trends have

been toward shipping larger tomatoes.

In response to a strong consumer

demand, new commercial tomato

varieties have been planted to produce

bigger tomatoes and have resulted in

more large sized tomatoes being

shipped. Because of this demand,

production of larger tomatoes has been

a popular method of improving returns

among producers as it also increases

total yields. Increasing the 6x66

maximum diameter provides handlers

the option of shifting the smallest sized

tomatoes in a 5x6 pack to a 6x66 pack.

By making this shift, handlers will be

Federal Register / Vol. 66, No. 44 / Tuesday, March 6, 2001 / Rules and Regulations 13395

able to increase the average size in both

the 6x66 and the 5x6 pack.

The 2⁄32 inch increase in the

maximum diameter of the 6x66-size

designation results in a 4⁄32 overlap in

the maximum diameter of the 6x66 and

the minimum size for the 5x6. Tomatoes

at the bottom of the 5x6 size can either

be packed as 5x6 tomatoes or as 6x66

tomatoes. According to the Committee,

this will provide for greater distribution

of tomato shipments throughout the two

size designations, enabling handlers to

make better decisions on which size of

tomatoes to pack. Such packing

decisions could depend on specific

buyer or market demands, on general

crop size, or on prices.

Shifting the smallest sizes from the

5x6 pack to the 6x66 pack would

increase the average size in both the

6x66 and the 5x6 packs. It would move

larger tomatoes into the 6x66 pack while

providing space for additional larger

tomatoes in the 5x6 pack. This would

lower the count of tomatoes for each

pack as well. In its discussions, the

Committee recognized that buyers prefer

larger tomatoes and a lower count per

box. With buyer preferences trending

toward larger sized tomatoes, the

Committee believes that having this

option could help grower returns.

This change also makes more

tomatoes available to fill the 6x66 pack.

In past years, there have been shortages

of this pack due to tomato size.

Committee members stated that during

the past season there were periods when

the tomatoes were sizing so well they

were having trouble packing many 6x66

packs. The Committee recognized that

there is a strong demand for the 6x66

pack and that it brings a favorable price,

occasionally equal to or above the price

for a 5x6 pack. Therefore, the

Committee believes that it is important

to continue to supply this market. With

the option of shifting slightly larger

tomatoes into the 6x66 pack, handlers

have more flexibility to move tomatoes

to meet market demand. This will be

particularly beneficial when the

majority to tomatoes are sizing well.

In addition, the Committee also

believes that raising the maximum

diameter for the 6x6 pack could

improve the uniformity of tomatoes in

the 5x6 pack. While increasing the

maximum diameter of the 6x6 pack does

increase the size range, the increase is

only by 2⁄32 of an inch. Further, shifting

the smaller sizes from a 5x6 pack to the

6x6 pack could improve the uniformity

of the 5x6 pack, which is expected to be

viewed as a benefit to buyers.

Because there is no upper limit on

size for a 5x6 pack, there can be a

considerable variation in size. With

newer tomato varieties producing larger

fruit, the size variance in containers of

5x6 tomatoes has grown. This size

variation is particularly evident with the

smaller sizes in the pack. By having the

opportunity to shift the smaller sizes to

the 6x6 pack, handlers will be able to

improve the uniformity of their 5x6

packs. This is particularly important

because the 5x6 pack usually commands

the best price in the market, faces the

most competition, and is the most

popular size.

During the 1999–2000 season,

approximately 58 percent of the Florida

tomatoes sold were 5x6 packs, and

about 28 percent were sold as 6x6’s.

Increasing the maximum diameter size

of the 6x6 by 2⁄32 inch will give handlers

the flexibility to reduce the number of

smaller sized tomatoes packed in the

5x6-size designation.

A study conducted by Dr. John J.

VanSickle at the University of Florida

indicates that increasing the maximum

diameter could result in an increase in

the prices received for Florida tomatoes.

The study indicates that if 1 percent of

the smallest 5x6 size tomatoes are

shifted into the smaller size categories,

then prices for 5x6 size tomatoes could

increase by .25 percent. With regard to

6x6 size tomatoes, the study indicates

that the prices could increase by .15

percent. The increase in price would

occur because of the redistribution of

larger sized tomatoes into the smaller

size designations, which is a response to

consumer demand for a more consistent

pack and slightly larger tomatoes.

Committee members do not believe

that this change will create any

confusion on the part of buyers. Rather,

they stated that this change allows

handlers more opportunity to address

the demands of their buyers.

Consumers and buyers are demanding

a slightly larger tomato. Smaller

tomatoes with a less uniform pack have

poor consumer acceptance, especially in

chain stores. This change provides

handlers with some flexibility to adjust

the size composition and uniformity of

their packs to address the needs of their

customers.

This change does not affect the

current exemption provided to producer

field packed tomatoes as long as the

containers are designated as 6x6 and

larger. Specifically, field packed

tomatoes designated as size 6x6 and

larger are not subject to the maximum

diameter specified in the order’s rules

and regulations for 6x6 sized tomatoes

(65 FR 8247, February 18, 2000).

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 tomatoes,

imports of that commodity must meet

the same or comparable requirements.

However, the Act does not authorize the

imposition of container requirements on

imports, when such requirements are in

effect under a domestic marketing order.

Florida tomatoes must be packed in

accordance with three specified size

designations, and tomatoes falling into

different size designations may not be

commingled in a single container. These

pack restrictions do not apply to

imported tomatoes. Therefore, no

change is necessary in the tomato

import regulation as a result of this

action.

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 70 handlers

of Florida tomatoes who are subject to

regulation under the marketing order

and approximately 130 tomato

producers in the regulated area. Small

agricultural service firms 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

$500,000 (13 CFR 121.201).

Committee data indicates that

approximately 20 percent of the Florida

tomato handlers handle 80 percent of

the total volume. Based on the industry

and Committee data, the average annual

price for fresh Florida tomatoes during

the 1999–2000 season was $6.89 per 25-

pound carton or equivalent, and total

fresh shipments for the 1999–2000

season were 58,006,721 25-pound

equivalent cartons of tomatoes. Based

on this information, the majority of

handlers would be classified as small

entities as defined by the SBA. The

majority of producers of Florida

tomatoes may also be classified as small

entities.

This rule continues in effect an

increase in the maximum diameter

requirement for size 6x6 tomatoes

prescribed in the order’s handling

13396 Federal Register / Vol. 66, No. 44 / Tuesday, March 6, 2001 / Rules and Regulations

regulations from 227⁄32 inches to 229⁄32

inches, and will allow handlers the

option of packing slightly larger

tomatoes in a 6x6 container. With this

increased flexibility, handlers will be

able to better meet consumer demand

for larger tomatoes, while providing

greater returns to growers. The

Committee unanimously recommended

this change. Authority for this action is

provided in § 966.52.

If handlers take advantage of the

increased packing flexibility, they

would incur direct costs associated with

the purchase of new sizing belts. Sizing

belts convey and size fruit during the

packing process. Depending on the

amount of use, sizing belts can last a

season or may need to be replaced two

to three times a season. Estimated prices

associated with these purchases could

range from $450.00 for a small handler

to $19,000 for very large handlers.

While there are short-term costs

associated with the maximum diameter

of the 6x6 sizing designation, the

benefits are expected to outweigh the

costs. Moreover, changing sizing belts is

a routine action since they have to be

regularly replaced depending on use.

These costs are expected to be minimal

relative to the benefits expected, and in

relation to normal operating costs and

procedures.

A study conducted by Dr. John J.

VanSickle at the University of Florida

estimates that a shift of 1 percent of 5x6

tomatoes into the smaller size categories

would increase the prices for 5x6-size

tomatoes by .25 percent. For 6x6’s, the

price could increase by .15 percent. The

increase in price would occur in

response to consumer demand for packs

with slightly larger tomatoes.

This change is designed to provide

handlers with more flexibility as to how

sizes are packed. Because of this,

handlers can choose to continue to pack

as they have without making any

adjustments due to this rule change.

Purchasing new equipment is not

necessary to remain in compliance with

order provisions. Therefore, this rule

places the decision with the individual

handler as to whether the costs are

outweighed by the benefits.

Individual seasons and different

periods during the same season can

present a fair amount of variability in

production and size. This change

provides handlers with some additional

flexibility when packing for size to

allow handlers to make some

adjustments in order to maximize

returns and to service customer

demand. This rule provides the

opportunity for handlers to make

adjustments based on market

conditions. This should have a positive

effect on returns.

The Committee recommended these

changes to improve the marketing of

Florida tomatoes. The opportunities and

benefits of this rule are expected to be

equally available to all tomato handlers

and growers regardless of their size of

operation. This action will have a

beneficial impact on producers and

handlers since it will allow tomato

handlers more flexibility in making

tomatoes available to meet consumer

needs consistent with crop and market

conditions.

The Committee discussed alternatives

to this recommendation, including

leaving the regulations as currently

issued. All Committee members agreed

that this change would be helpful in

improving pack appearance and in

providing handlers some additional

flexibility. Therefore, the Committee

voted to make this change rather than

leave the size designation for 6X6

unchanged.

This rule will not impose any

additional reporting or recordkeeping

requirements on either small or large

tomato 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, the

Department 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

tomato industry and all interested

persons were invited to attend the

meeting and participate in Committee

deliberations. Like all Committee

meetings, the September 8, 2000,

meeting was a public meeting and all

entities, both large and small, were able

to express their views on this issue.

Also, the Committee has a number of

appointed subcommittees to review

certain issues and make

recommendations to the Committee.

The Committee’s Marketing

Subcommittee met on August 21, 2000,

and discussed this issue in detail. That

meeting was also a public meeting and

both large and small entities were able

to participate and express their views.

An interim final rule concerning this

action was published in the Federal

Register on November 6, 2000. Copies of

the rule were mailed by the Committee’s

staff to all Committee members and

tomato handlers. In addition, the Office

of the Federal Register made the rule

available through the Internet. That rule

provided for a 60-day comment period,

which ended January 5, 2001. 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 (65 FR 66492, November 6,

2000) will tend to effectuate the

declared policy of the Act.

List of Subjects in 7 CFR Part 966

Marketing agreements, Reporting and

recordkeeping requirements, Tomatoes.

PART 966—TOMATOES GROWN IN

FLORIDA

Accordingly, the interim final rule

amending 7 CFR part 966 which was

published at 65 FR 66492 on November

6, 2000, is adopted as a final rule

without change.

Dated: February 28, 2001.

Kenneth C. Clayton,

Acting Administrator, Agricultural Marketing

Service.

[FR Doc. 01–5317 Filed 3–5–01; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 982

[Docket No. FV01–982–1 IFR]

Hazelnuts Grown in Oregon and

Washington; Establishment of Interim

and Final Free and Restricted

Percentages for the 2000–2001

Marketing Year

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Interim final rule with request

for comments.

SUMMARY: This rule establishes interim

and final free and restricted percentages

for domestic inshell hazelnuts for the

2000–2001 marketing year under the

Federal marketing order for hazelnuts

grown in Oregon and Washington. The

percentages allocate the quantity of

domestically produced hazelnuts which

may be marketed in the domestic inshell

market. The percentages are intended to