[Federal Register: December 7, 2005 (Volume 70, Number 234)]
[Rules and Regulations]
[Page 72699-72702]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07de05-1]
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Rules and Regulations
Federal Register
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[[Page 72699]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 979
[Docket No. FV05-979-2 FIR]
Melons Grown in South Texas; Continued Suspension of Handling and
Assessment Collection Regulations
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 suspending 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 all reporting requirements
under the order. 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 continues to relieve handlers of
regulatory requirements while the USDA evaluates the Committee's
recommendation to terminate the order.
DATES: Effective January 6, 2006.
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 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 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 indefinitely a
suspension of assessment collection and reporting requirements under
the order. 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 to
evaluate the need for the marketing order. A final rule was published
in the Federal Register on February 23, 2005 (70 FR 8709). On September
7, 2005, the Committee recommended termination of the order after a
year of evaluation. An interim final rule was published in the Federal
Register on October 5, 2005, (70 FR 57995) continuing indefinitely the
suspension of all regulatory requirements under the order 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
[[Page 72700]]
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 ended 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 expired on September 30, 2005.
The process to terminate a marketing order takes several months to
complete; therefore, an interim final rule continuing indefinitely the
suspension of regulations was issued in the Federal Register at 70 FR
57995 on October 5, 2005. That interim final rule also suspended the
one remaining reporting requirement in effect regarding planted
acreage, as the Committee believes there is no need to incur any costs
or gather additional data. This final rule continues in effect the
suspension of all regulatory requirements under the order.
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.
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
[[Page 72701]]
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 chose 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
expired on September 30, 2005. A subsequent interim final rule was
published in the Federal Register on October 5, 2005, (70 FR 57995)
suspending all regulatory requirements under the order, including the
one remaining reporting requirement in effect. This final rule
continues in effect the suspension of all regulatory requirements
indefinitely as USDA evaluates the Committee's recommendation to
terminate the order.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the information collection requirements continuing to be
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 were invited to submit information on the regulatory
and informational impacts of this action on small businesses. No
comments were received.
An interim final rule concerning this action was published in the
Federal Register on October 5, 2005. Copies of the rule were mailed by
the Committee's staff to all Committee members and melon handlers. In
addition, the rule was made available through the Internet by the USDA
and the Office of the Federal Register. That rule provided for a 30-day
comment period which ended November 4, 2005. 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
the regulations suspended in this final rule, which adopts, without
change, the interim final rule, as published in the Federal Register
(70 FR 57995) no longer tend to effectuate the declared policy of the
Act.
List of Subjects in 7 CFR Part 979
Marketing agreements, Melons, Reporting and recordkeeping
requirements.
PART 979--MELONS GROWN IN SOUTH TEXAS
0
Accordingly, the interim final rule amending 7 CFR Part 979 which was
published at 70 FR 57995 on October 5, 2005, is adopted as a final rule
without change.
[[Page 72702]]
Dated: December 1, 2005.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 05-23707 Filed 12-6-05; 8:45 am]
BILLING CODE 3410-02-P