FR Doc 06-5833

[Federal Register: June 29, 2006 (Volume 71, Number 125)]
[Proposed Rules]
[Page 37014-37016]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29jn06-13]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. FVO6-966-1 PR]

Tomatoes Grown in Florida; Partial Exemption to the Minimum Grade
Requirements

ACTION: Proposed rule.

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SUMMARY: This rule invites comments on a proposed partial exemption to
the minimum grade requirements under the marketing order for tomatoes
grown in Florida (order). The Florida Tomato Committee (Committee)
locally administers the order. Under the order, Florida tomatoes must
meet at least a U.S. No. 2 grade before they can be shipped and sold
outside the regulated area. This rule would exempt
UglyRipe^TM (UglyRipe) tomatoes from the shape requirements
associated with the U.S. No. 2 grade. This change would increase the
volume of UglyRipe tomatoes that would meet the order requirements, and
would help increase shipments and availability of these tomatoes.

DATES: Comments must be received by August 28, 2006.

ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. 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: William Pimental, 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 William.pimental@usda.gov; or Christian 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:
Christian.nissen@usda.gov.

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 proposal 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 of Agriculture (USDA) is issuing this rule in
conformance with Executive Order 12866.
This proposal has been reviewed under Executive Order 12988, Civil

[[Page 37015]]

Justice Reform. This rule is not intended to have retroactive effect.
This proposal 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 invites comments on a proposed partial exemption to the
minimum grade requirements prescribed under the order. The order's
rules and regulations specify that Florida tomatoes must meet at least
a U.S. No. 2 grade before they can be shipped and sold outside the
regulated area. This rule would exempt UglyRipe tomatoes from the shape
requirements associated with the U.S. No. 2 grade. This change would
increase the volume of UglyRipe tomatoes that would meet the order
requirements, and would help increase shipments and availability of
these tomatoes. In addition, it is anticipated that this change would
help promote continued innovation within the industry.
Section 966.52 of the order provides the authority for the
establishment of grade and size requirements for Florida tomatoes. Form
and shape represent part of the factors of grade. Section 966.323 of
the order's rules and regulations specifies, in part, the minimum grade
requirements for Florida tomatoes. The current minimum grade
requirement for Florida tomatoes is a U.S. No. 2. The specifics of this
grade requirement are listed under the U.S. Standards for Grades of
Fresh Tomatoes (7 CFR 51.1855-51.1877).
The U.S. Standards for Grades of Fresh Tomatoes (Standards) specify
the criteria tomatoes must meet to grade a U.S. No. 2, including that
they must be reasonably well formed, and not more than slightly rough.
These two factors relate specifically to the shape of the tomato. The
definitions section of the Standards defines reasonably well formed as
not decidedly kidney shaped, lopsided, elongated, angular, or otherwise
decidedly deformed. The term slightly rough means that the tomato is
not decidedly ridged or grooved. This rule would amend Sec. 966.323 to
exempt UglyRipe tomatoes from these shape requirements as specified
under the grade for a U.S. No. 2.
UglyRipe tomatoes are a trademarked tomato variety bred to look and
taste like an heirloom-type tomato. One of the characteristics of this
variety is its appearance. UglyRipe tomatoes are often shaped
differently from other round tomatoes. Depending on the time of year
and the weather, UglyRipe tomatoes are concave on the stem end with
deep, ridged shoulders. They can also appear kidney shaped and
lopsided. Because of this variance in shape and appearance, UglyRipe
tomatoes can have difficulty meeting the shape requirements of the U.S.
No. 2 grade.
This rule would provide UglyRipe tomatoes with a partial exemption
from the grade requirements under the order. UglyRipe tomatoes would
only be exempt from the shape requirements of the grade and would still
be required to meet all other aspects of the U.S. No. 2 grade. The
UglyRipe tomato continues to be required to meet all other requirements
under the marketing order, such as size, pack and container, and
inspection.
Prior to the 1998-99 season, the Committee recommended that the
minimum grade be increased from a U.S. No. 3 to a U.S. No. 2. Committee
members agree that increasing the grade requirement has been very
beneficial to the industry and in the marketing of Florida tomatoes.
Further, some Committee members have stated that a large part of the
volume of the standard commercial varieties of tomatoes which fail to
make the grade are rejected because of their shape and appearance.
Consequently, there was some industry concern that providing an
exemption for the UglyRipe tomato could result in the shipment of U.S.
No. 3 grade tomatoes of other varieties, contrary to the objectives of
the exemption and the order.
To address this concern, the producers of UglyRipe tomatoes pursued
entry into USDA's Identity Preservation (IP) program. This program was
developed by the Agricultural Marketing Service to assist companies in
marketing products having unique traits. The program provides
independent, third-party verification of the segregation of a company's
unique product at every stage, from seed, production and processing, to
distribution. The UglyRipe tomato was granted positive program status
in early 2006.
This partial exemption would only extend to UglyRipe tomatoes
covered under the IP program. As such, this should help ensure that
only UglyRipe tomatoes would be shipped under the proposed exemption.
In addition, this exemption would be contingent upon the UglyRipe
tomatoes continuing to meet the requirements of the IP program.
This rule would exempt UglyRipe tomatoes from the shape
requirements associated with the U.S. No. 2 grade. This change would
increase the volume of UglyRipe tomatoes that would meet order
requirements, and would help increase shipments and availability of
these tomatoes.
Section 8e of the Act provides that when certain domestically
produced commodities, including tomatoes, are regulated under a Federal
marketing order, imports of that commodity must meet the same or
comparable grade, size, quality, and maturity requirements. Since this
rule would provide a partial exemption to the minimum grade
requirements under the domestic handling regulations, a corresponding
change to the import regulations would also need to be accomplished. A
proposed rule that would provide a similar partial exemption to the
minimum grade requirements under the import regulations will be issued
as a separate action.

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 rules issued there under, 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 100 producers of tomatoes in the production
area and approximately 70 handlers subject to regulation under the
marketing order. Small agricultural producers are defined by the Small
Business Administration (SBA) as those

[[Page 37016]]

having annual receipts less than $750,000, and small agricultural
service firms are defined as those whose annual receipts are less than
$6,500,000 (13 CFR 121.201).
Based on industry and Committee data, the average annual price for
fresh Florida tomatoes during the 2004-05 season was approximately
$12.50 per 25-pound container, and fresh shipments totaled 53,025,915
25-pound cartons of tomatoes. Committee data indicates approximately 27
percent of the handlers handle 95 percent of the total volume shipped
outside the regulated area. Based on the average price, about 75
percent of handlers could be considered small businesses under SBA's
definition. In addition, based on production, grower prices as reported
by the National Agricultural Statistics Service, and the total number
of Florida tomato growers, the average annual grower revenue is below
$750,000. Thus, the majority of handlers and producers of Florida
tomatoes may be classified as small entities.
This rule would provide a partial exemption to the minimum grade
requirements for tomatoes grown in Florida. Under the order, Florida
tomatoes must meet at least a U.S. No. 2 grade before they can be
shipped and sold outside the regulated area. This rule would exempt
UglyRipe tomatoes from the shape requirements specified under the
Standards for a U.S. No. 2 grade. This change would increase the volume
of UglyRipe tomatoes that would meet the order requirements, and would
help increase shipments and availability of these tomatoes for
consumers. This rule would amend the provisions of Sec. 966.323.
Authority for this action is provided in Sec. 966.52 of the order.
This change would represent a small increase in costs for producers
and handlers of UglyRipe tomatoes, primarily from costs associated with
developing and maintaining the IP program. However, the majority of
facilities associated with UglyRipe tomatoes were involved with the IP
program prior to this proposed rule and have already received a
successful audit. Therefore, the additional costs associated with this
action would be those costs related to maintaining and complying with
the IP program. It is anticipated that these costs would be minimal.
In addition, this rule would make additional volumes of UglyRipe
tomatoes available for shipment. This should result in increased sales
of UglyRipe tomatoes. Consequently, the benefits of this action should
more than offset the associated costs.
One alternative to this action that was considered was to not
provide an exemption from shape requirements for UglyRipe tomatoes.
However, providing the exemption would increase the volume of UglyRipe
tomatoes that would meet the order requirements, and would help
increase shipments and availability of these tomatoes. Therefore, this
alternative was rejected.
This rule would not impose any additional reporting or
recordkeeping requirements beyond the IP program 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.
AMS is committed to compliance with the Government Paperwork
Elimination Act (GPEA), which requires Government agencies in general
to provide the public the option of submitting information or
transacting business electronically to the maximum extent possible.
USDA has not identified any relevant Federal rules that duplicate,
overlap or conflict with this proposed rule.
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 a proposed partial exemption to the
minimum grade requirements prescribed under the order. A 60-day comment
period is provided to allow interested persons to respond to this
proposal. All written comments timely received will be considered
before a final determination is made on this matter.

List of Subjects in 7 CFR Part 966

Marketing agreements, Reporting and recordkeeping requirements,
Tomatoes.

For the reasons set forth in the preamble, 7 CFR part 966 is
proposed to be amended as follows:

PART 966--TOMATOES GROWN IN FLORIDA

1. The authority citation for 7 CFR part 966 continues to read as
follows:

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

2. Amend Sec. 966.323, by adding a new paragraph (d)(5) to read as
follows:

Sec. 966.323 Handling regulation.

* * * * *
(d) * * *
(5) For UglyRipe^TM tomatoes. UglyRipe ^TM
tomatoes must meet all the requirements of this section: Provided, That
UglyRipe^TM tomatoes shall be graded and at least meet the
requirements specified for U.S. No. 2 under the U.S. Standards for
Grades of Fresh Tomatoes, except they are exempt from the requirements
that they be reasonably well formed and not more than slightly rough,
and Provided, Further that the UglyRipe^TM tomatoes meet the
requirements of the Identity Preservation program, Fresh Products
Branch, Fruit and Vegetable Programs, AMS, USDA.
* * * * *

Dated: June 26, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 06-5833 Filed 6-27-06; 12:01 pm]

BILLING CODE 3410-02-P