[Federal Register: January 17, 2007 (Volume 72, Number 10)]
[Rules and Regulations]
[Page 1919-1922]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17ja07-5]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 966
[Docket No. FVO6-966-1 FR]
Tomatoes Grown in Florida; Partial Exemption to the Minimum Grade
Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule provides a 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 exempts UglyRipeTM (UglyRipe) tomatoes from
the shape requirements associated with the U.S. No. 2 grade. This
change increases the volume of UglyRipe tomatoes that will meet the
order requirements, and will help increase shipments and availability
of these tomatoes for consumers.
EFFECTIVE DATE: This final rule becomes effective January 18, 2007.
FOR FURTHER INFORMATION CONTACT: William Pimental, Marketing
Specialist, 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:
William.Pimental@USDA.gov, or 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.
[[Page 1920]]
SUPPLEMENTARY INFORMATION: This final 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 of Agriculture (USDA) is issuing this rule in
conformance with Executive Order 12866.
This final 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 final rule provides a 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 exempts UglyRipe tomatoes from the shape requirements
associated with the U.S. No. 2 grade. This change increases the volume
of UglyRipe tomatoes that will meet the order requirements, and will
help increase shipments and availability of these tomatoes for
consumers. In addition, it is anticipated that this change will 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 elements 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 elements 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 amends 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 provides UglyRipe tomatoes with a partial exemption from
the grade requirements under the order. UglyRipe tomatoes are only
exempt from the shape requirements of the grade and are still required
to meet all other aspects of the U.S. No. 2 grade. UglyRipe tomatoes
also continue 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 UglyRipe tomatoes 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. UglyRipe tomatoes were granted positive program status in
early 2006.
This partial exemption only extends to UglyRipe tomatoes covered
under the IP program. As such, this should help ensure that only
UglyRipe tomatoes are shipped under the exemption. In addition, this
exemption is contingent upon UglyRipe tomatoes continuing to meet the
requirements of the IP program.
This rule exempts UglyRipe tomatoes from the shape requirements
associated with the U.S. No. 2 grade. This change increases the volume
of UglyRipe tomatoes that will meet order requirements, and will help
increase shipments and availability of these tomatoes. In addition, it
is hoped that this change will help promote continued innovation within
the industry.
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 provides a partial exemption to the minimum grade requirements
under the domestic handling regulations, a corresponding change to the
import regulations is also needed. A final rule providing the same
partial exemption to the minimum grade requirements under the import
regulations will be issued as a separate action.
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
[[Page 1921]]
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 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 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 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 final rule provides 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 final rule exempts
UglyRipe tomatoes from the shape requirements specified under the
Standards for a U.S. No. 2 grade. This change increases the volume of
UglyRipe tomatoes that will meet the order requirements, and will help
increase shipments and availability of these tomatoes for consumers.
This final rule amends the provisions of Sec. 966.323. Authority for
this action is provided in Sec. 966.52 of the order.
This change represents 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 rule and have already received a successful
audit. Therefore, the additional costs associated with this action are
those costs related to maintaining and complying with the IP program.
It is anticipated that these costs will be minimal and will be offset
by the increased sales of UglyRipe tomatoes.
Finally, UglyRipe tomatoes are still required to meet the majority
of the requirements for a U.S. No. 2 grade, and are usually priced
higher than U.S. No. 2 graded standard commercial variety tomatoes.
Therefore, this action should not have a price depressing effect on
standard varieties, and because of the difference in price, this
exemption should not have a significant impact on the market share for
standard commercial varieties of Florida tomatoes.
One alternative to this action that was considered was to not
provide an exemption from shape requirements for UglyRipe tomatoes.
This option would not have allowed for an increase in the volume of
UglyRipe tomatoes that would meet the order requirements, and would not
help increase shipment and availability of these tomatoes. Therefore,
this alternative was rejected.
This final rule provides a partial exemption to the minimum grade
requirements under the Florida tomato marketing order. Accordingly,
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.
The 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.
As noted in the initial regulatory flexibility analysis, USDA has
not identified any relevant Federal rules that duplicate, overlap or
conflict with this final rule.
A proposed rule concerning this action was published in the Federal
Register on June 29, 2006 (71 FR 37014). Copies of the rule were mailed
or sent via facsimile to all Committee members and tomato handlers.
Finally, the rule was made available through the Internet by USDA and
the Office of the Federal Register. A 60-day comment period ending
August 28, 2006, was provided to allow interested persons to respond to
the proposal.
Eighty-eight comments were received during the comment period in
response to the proposal. Of the comments received, 79 were in support
of the regulation and 9 were in opposition. One comment was received
after the close of the comment period.
The comments in support of the proposal expressed appreciation for
the taste of UglyRipe tomatoes, and supported a greater market
availability for UglyRipe tomatoes. Several commenters stated that
UglyRipe tomatoes compared favorably with homegrown tomatoes. Other
commenters compared the taste as being equal to local tomatoes, even in
winter when local tomatoes were not available. Several of the comments
stated that good taste was of greater importance than appearance.
Commenters also expressed that they have had difficulty in finding
UglyRipe tomatoes available for purchase and supported this rule and
its efforts to increase availability.
Nine comments were received in opposition to the proposed rule. Of
these comments, five expressed concerns regarding this proposal's
impact on orderly marketing. Four commenters stated that the current
marketing order requirements provide stability to the industry. One
commenter stated that the standards established under the order are key
to the establishment of an orderly market for Florida growers and that
this rule will weaken the industry's ability to maintain an orderly
market. Another commenter stated that the proposed rule does not
establish, maintain, or support orderly marketing conditions, but does
the exact opposite.
One of the main goals of marketing orders is to establish orderly
marketing conditions for those commodities covered under marketing
orders. As previously noted, this partial exemption only extends to
UglyRipe tomatoes. Further, this rule only provides UglyRipe tomatoes
with a partial exemption from the shape requirements of the U.S. No. 2
grade. UglyRipe tomatoes are still subject to the requirements for
maturity, ripeness, softness, development, decay, and damage as
specified under the Standards for a U.S. No. 2 grade. Even with this
partial exemption, the requirements for UglyRipe tomatoes are still
significantly higher than those for U.S. No. 3 grade tomatoes.
Because this partial exemption is narrowly defined, the vast
majority of the tomatoes shipped from Florida will still meet the
requirements for a U.S. No. 2 grade. Therefore, this change will not
diminish the overall benefits of the established grade standard.
[[Page 1922]]
Consequently, this change should not have an adverse impact on the
orderly market for Florida tomatoes.
Five commenters stated that this change would allow UglyRipe
tomatoes to circumvent the requirements of the order. Two comments
declared that this rule would allow all UglyRipe tomatoes produced to
be sold outside of the regulated area. Another comment stated that this
rule would allow UglyRipe tomatoes to escape the standards applicable
to all other tomatoes.
This partial exemption will not allow UglyRipe tomatoes to
circumvent the requirements of the order, or allow all UglyRipe
tomatoes produced in Florida to be shipped outside the regulated area.
As stated above, UglyRipe tomatoes will still have to meet the majority
of the requirements for U.S. No. 2 grade tomatoes, and will have to be
inspected to ensure these requirements are met. UglyRipe tomatoes also
continue to be required to meet all other requirements under the
marketing order, such as size, pack and container, and assessment
provisions. In addition, UglyRipe tomatoes must meet the requirements
of the IP program.
Five commenters expressed concern that providing this exemption for
the UglyRipe tomato will create a loophole, which will result in the
shipment of U.S. No. 3 grade tomatoes of other varieties by other
producers. One of the commenters stated that with this change, every
farmer in Florida will be selling his off shaped fruit. Another
commenter wrote that this action presents too many opportunities for
domestic growers and importers to sell tomatoes of inferior quality.
Another commenter stated that they had no doubt that efforts will be
made to market U.S. No. 3 grade tomatoes that resemble UglyRipe
tomatoes.
We disagree with these comments. There are safeguards in place to
address these issues. In addition to the existing inspection
requirements, and compliance efforts, this partial exemption only
extends to UglyRipe tomatoes covered under the IP program. This program
was developed by AMS and provides independent, third-party verification
of the segregation of a company's product at every stage, from seed,
production and processing, to distribution. This will help ensure that
only UglyRipe tomatoes are shipped using this partial exemption, as
only handlers covered under the IP program will be allowed to pack
under the exemption. Further, USDA plans to closely monitor compliance
with this exemption.
Three commenters stated that this rule will have a negative
economic impact on the tomato industry. One commenter stated that this
rule will cause a market share loss and loss of sales. Another comment
states that this will increase supply, which will negatively affect
price.
We disagree because this partial exemption is so narrowly defined,
and only applies to UglyRipe tomatoes, it should not result in a
significant increase in the overall supply of tomatoes. Also, this
action should not have a significant impact on price. 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. The reason for this action
was that U.S. No. 3 grade tomatoes were having a price depressing
effect on the market. This is because U.S. No. 3 grade tomatoes of
standard commercial varieties sell at prices below those for U.S. No. 2
grade tomatoes. However, in the case of UglyRipe tomatoes, they are
still required to meet the majority of the requirements for a U.S. No.
2 grade, and are usually priced higher than U.S. No. 2 graded standard
commercial variety tomatoes. Therefore this action should not have a
price depressing effect on standard varieties, and because of the
difference in price this exemption should not have a significant impact
on the market share for standard commercial varieties of Florida
tomatoes.
Two commenters also stated that this regulation would have a
negative impact on small growers. The commenters stated that when USDA
did its initial regulatory flexibility analysis USDA only considered
the impact on producers and handlers of UglyRipe tomatoes. The
commenters stated that this rule would have a negative impact on small
producers and handlers of standard commercial varieties.
In its initial regulatory flexibility analysis, USDA found that
this change represents a small increase in costs for producers and
handlers of UglyRipe tomatoes, primarily from costs associated with
developing and maintaining the IP program. As discussed above, this
rule should not significantly impact demand or price for standard
commercial varieties. Consequently, we do not agree that this action
will negatively impact growers and handlers of standard commercial
varieties.
Accordingly, no changes will be made to the rule as proposed, based
on comments 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 matter presented, including the
information and recommendation submitted by the Committee and other
available information, it is hereby found that this rule, as
hereinafter set forth, will tend to effectuate the declared policy of
the Act.
It is further found that good cause exists for not postponing the
effective date of this rule until 30 days after publication in the
Federal Register (5 U.S.C. 553) because the regulatory period will
begin October 10, 2006. Also, a 60-day comment period was provided for
in the proposed rule.
List of Subjects in 7 CFR Part 966
Marketing agreements, Reporting and recordkeeping requirements,
Tomatoes.
0
For the reasons set forth in the preamble, 7 CFR part 966 is amended as
follows:
PART 966--TOMATOES GROWN IN FLORIDA
0
1. The authority citation for 7 CFR part 966 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Amend Sec. 966.323, by adding a new paragraph (d)(5) to read as
follows:
Sec. 966.323 Handling regulation.
* * * * *
(d) * * *
(5) For UglyRipeTM tomatoes. UglyRipeTM
tomatoes must meet all the requirements of this section: Provided, That
UglyRipeTM 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 UglyRipeTM tomatoes meet the
requirements of the Identity Preservation program, Fresh Products
Branch, Fruit and Vegetable Programs, AMS, USDA.
* * * * *
Dated: January 12, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 07-162 Filed 1-12-07; 11:58 am]
BILLING CODE 3410-02-P