[Federal Register: October 5, 2005 (Volume 70, Number 192)]
[Rules and Regulations]
[Page 57995-57998]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05oc05-3]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 979
[Docket No. FV05-979-2 IFR]
Melons Grown in South Texas; Continued 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 continues in effect indefinitely a suspension of the
minimum grade, quality, maturity, container, pack, inspection,
assessment collection, and other related requirements prescribed under
the South Texas melon (cantaloupes and honeydews) marketing order
(order). It also continues in effect a suspension of reporting
requirements under the order. These requirements were initially
suspended for the 2004-05 fiscal period to allow the South Texas melon
industry to evaluate the need for the marketing order. This action also
suspends one remaining reporting requirement in effect. The order
regulates the handling of melons grown in South Texas and is
administered locally by the South Texas Melon Committee (Committee). On
September 7, 2005, the Committee recommended termination of the order.
This rule will relieve handlers of regulatory requirements while the
Department of Agriculture (USDA) evaluates the Committee's
recommendation to terminate the order.
DATES: Effective October 6, 2005. Comments received by November 4, 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: Martin J. Engeler, Senior Marketing
Specialist, Marketing Order Administration Branch, Fruit and Vegetable
Programs, AMS, USDA, 2202 Monterey Street, Suite 102-B, Fresno,
California 93721; telephone: (559) 487-5110, Fax: (559) 487-5906; or
Kathleen M. Finn, Formal Rulemaking Team Leader, 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
[[Page 57996]]
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 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 indefinitely a suspension of the
minimum grade, quality, maturity, container, pack, inspection, and
other related requirements prescribed under the South Texas melon
order. For the purposes of this rule, these requirements are referred
to as handling requirements. It also continues in effect a suspension
of assessment collection and reporting requirements under the order,
and suspends one remaining reporting requirement currently in effect
concerning planted acreage. An interim final rule published in the
Federal Register on November 26, 2004 (69 FR 68761), suspended these
requirements for the 2004-05 fiscal period to allow the South Texas
melon industry evaluate the need for the marketing order. A final rule
was published in the Federal Register on February 23, 2005 (70 FR
8709). The order regulates the handling of melons grown in South Texas
and is administered locally by the South Texas Melon Committee
(Committee). On September 7, 2005, the Committee recommended
termination of the order after a year of evaluation. This rule will
relieve handlers of regulatory requirements while USDA evaluates the
Committee's recommendation to terminate the order.
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) specifies minimum grade and quality
requirements for the handling of cantaloupes and honeydew melons. That
section also specifies pack and container requirements for these
commodities.
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.
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.
These requirements initially were suspended pursuant to a rule
published in the Federal Register on November 26, 2004 (69 FR 68761).
It was believed that the cost of inspection and certification and
administering the order may exceed the benefits. The regulations were
suspended for one fiscal year so the industry would have time to
evaluate whether the order should be continued. Consistent with the
suspension of Sec. 979.304, also suspended for the 2004-2005 fiscal
year were Sec. 979.106, Sec. 979.152, and Sec. 979.155 of the rules
and regulations in effect under the order. 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, Sec. 979.219 requiring that an assessment rate of
$0.09 per carton of melons be collected from South Texas melon handlers
was also suspended. Consistent with suspension of Sec. 979.219, Sec.
979.112 specifying late payment charges on delinquent assessments was
also suspended.
The Committee met on September 7, 2005, to evaluate the industry
situation since the regulations were suspended. Planted acreage
continued to decline, from 4,780 acres in 2003-04 to 2,364 acres in
2004-05. The number of melon growers and handlers also continued to
decline. During the 2003-04 season, there were 29 growers and 16
handlers; in 2004-05 the number of known growers decreased to 13 and
handlers decreased to seven. In addition, no new varieties were
introduced to improve the quality and make the product more competitive
with product from other producing areas. In short, the industry
situation continues to worsen. The Committee believes that there is no
longer a need for the order, and therefore recommended its termination.
USDA is evaluating the Committee's recommendation.
The first suspension of regulations expires on September 30, 2005.
The process to terminate a marketing order takes several months to
complete; therefore, this action will continue the suspension of
regulations during this process, consistent with the intent of the
Committee. This action also suspends the one remaining reporting
requirement under the order regarding planted acreage. Because the
industry has continued to decline, the Committee believes there is no
need to incur any costs or gather any additional data.
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
[[Page 57997]]
behalf. Thus, both statutes have small entity orientation and
compatibility.
During the 2004-05 marketing year, there were approximately seven
handlers of South Texas melons subject to regulation under the
marketing order and approximately 13 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 $6,000,000, 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.
Complete comparable data is not available for the 2004-05 marketing
year, but based on a reduction of acreage from 4,780 acres in 2003-04
to 1,364 acres in 2004-05, and the reduced number of growers and
handlers, it follows that the volume handled and the value of
production likely declined as well.
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, it is estimated
that all of the seven 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 $6,000,000 annual receipt
threshold. Of the 13 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. A rule was published in
the Federal Register on November 26, 2004, suspending these
requirements for the specified period (69 FR 68762). A final rule was
published in the Federal Register on February 23, 2005 (70 FR 8709).
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. 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, and
1,364 acres in 2005. The number of producers and handlers also has
steadily declined.
Underlying economics for the South Texas melon industry did not
justify continuing the regulations for 2004-05. Too little assessment
revenue could be generated for an effective marketing and promotion
program, and buyer demands have superseded the regulations in dictating
quality requirements.
Suspending the regulations enabled handlers to ship melons without
regard to the minimum grade, quality, maturity, container, pack,
inspection, and related requirements for the 2004-05 fiscal period. It
decreased industry expenses associated with inspection and assessments.
In addition, this rule also suspended, for the 2004-05 marketing
year, 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 was 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 was 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 were provided from the Committee's reserves.
The Committee anticipated that suspending the regulations would not
negatively impact small businesses. The suspension applied to minimum
grade, quality, maturity, container, pack, inspection, assessment
collection, some reporting, and other related requirements. Further,
this rule allowed 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 were not incurred during the 2004-2005 season.
The suspension of the assessment collection requirements for the
2004-05 season also resulted in some cost savings. Assessment
collections during the 2003-04 season totaled $102,988. As a result of
the suspension of Sec. 979.219, no assessments were collected during
the 2004-05 season.
At its September 16, 2004, meeting, 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.
The Committee met on September 7, 2005, to evaluate the industry
situation since the regulations were suspended. Planted acreage
continued to decline, from 4,780 acres in 2003-04 to 2,364 acres in
2004-05. The number of melon growers and handlers also continued to
decline. During the 2003-04 season, there were 29 growers and 16
handlers; in 2004-05 the numbers decreased to 13 and seven,
respectively. In addition, no new varieties were introduced to improve
the quality and make South Texas melons more competitive with other
producing areas.
The Committee believes that there is no longer a need for the
order, and therefore recommended its termination. USDA is evaluating
the Committee's recommendation. The first suspension of regulations
expires on September 30,
[[Page 57998]]
2005. Therefore, this action will continue the suspension of
regulations indefinitely as USDA evaluates the Committee's
recommendation to terminate the order.
This action also suspends the one remaining reporting requirement
under the order regarding planted acreage. Because the industry has
continued to decline, the Committee believes there is no need to incur
any costs or gather any additional data.
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, Vegetable and Specialty
Crops. Suspension of all the reporting requirements under the order is
expected to reduce the reporting burden on small or large South Texas
melon handlers by 24.90 hours, and should further reduce industry
expenses. Handlers are no longer required to file any forms with the
Committee. This rule will, thus, 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 and the September
7, 2005 meeting were public meetings 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 continued suspension of the handling,
assessment collection, and all 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 continues to suspend the handling, assessment
collection, reporting requirements, and related regulations for South
Texas melons indefinitely; (2) termination of the order 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
30-day comment period and any comments received will be considered
prior to finalization of this rule. For these same reasons, a thirty-
day comment period is deemed appropriate for interested persons to
comment.
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, 979.180,
979.219, and 979.304 are suspended indefinitely in their entirety
effective October 6, 2005.
Dated: October 3, 2005.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 05-20088 Filed 10-3-05; 12:38 pm]
BILLING CODE 3410-02-P